Economic Environment of Business

Presentatation on :

Global Meltdown and it’s Impact on INDIA

Economic Environment of BusinessPresentation on :

Global Meltdown and it’s Impact on INDIA

Group MembersAmol Shenvi C - 4

Pritam Nirmale C - 18Omkar Chavan C - 19Sanal Nair C - 39Sanoj Thomas C - 49Suyog Salunke C - 51

Submitted to : Ms.Gitanjali Kapoor

Global MeltDown

“In my adult lifetime, I don’t think I’ve ever seen people as fearful,”

… super investor Warren Buffett“

The worst financial crisis since the great depression of 1930’s

It was triggered by a liquidity shortfall in the United States banking system

In 2008, 81 public corporations file for bankruptcy in the United States

Resulted in the collapse of large financial institutions.

significant decline in economic activity, lead to a severe global economic recession in 2008.

It all started in US…

Failure of banking system due to rise in the quantity of bad debt in the system

Major banks have landed in trouble after people could not pay back loans.

United states Housing bubble that burst…

How it all started???

Impacts on financial institutions

In September 2008 , 159,000 jobs were lost due to crisis in US.

US demand for imports from other countries indicated a decline.

Downturns in stock markets around the world.

Effects of Global meltdown on world markets

Effect on Indian economy

A slowdown in the US economy was a bad news for India.

Foreign investors did withdraw $12 billion from India’s stock markets.

India's exports to the US have also grown substantially over the years.

US demand for imports from India declined.

Weakening demand led to producers cutting production which resulted in increased unemployment.

The industries most affected by weakening demand were airlines, hotels, real estate.

Effects on Indian Economy

Downsizing in IT and Financial sector as companies cut costs.

The Indian Information Technology industry accounts for a 5.19% of the country's GDP.

A weakening of demand in the US affected our IT and Business Process Outsourcing (BPO) sector

the Foreign Direct Investment (FDI) started drying up and this affected investment In the Indian economy

the number of tourists inflow to india has come down.

How India survived financial crisis

Despite an unprecedented global recession, India remained the second fastest growing economy in the world.

India’s GDP grew by more than 6% throughout this period –

India is much less dependent than most countries on global flows of trade and capital.

India relies on external trade for about 20% of its GDP .

The country’s large and robust internal market accounts for the rest.

Indians continued producing goods and services for other Indians, and that kept the economy humming.

To lift the economy out of the recession the Government announced a package of Rs 35,000 crores in the first instance on December 7, 2008.

How India survived financial crisis

Opportunities for INDIA

Most of the stars of the Wall Street collapse will continue.These will generate new opportunities for low cost high quality services.

Many companies who were not outsourcing certain processes will increasingly be forced to do so.

The US Congress approved a revised $700 billion package to bail out the US financial sector. This means major opportunity for India-based services companies

Opportunities for India

Conclusion

“ Every black cloud has a silver lining ”

The global financial meltdown will mean some tough times for its suppliers, but the fittest will survive - and emerge stronger.

The global financial crisis can be turned into a great opportunity for growth in India.

Conclusion