ECONOMY OF INDIA AND INTERNATINAL MARKET

INTRODUCTION:
In today’s competitive market where the world is reduced to a Global Village changes in major economic superpowers like U.S.A, China and European countries affect the global economic scenario drastically. No wonder recession in one country brings slowdown in industries all over the world.

CAUSES OF RECESSION:
Recession in U.S. Market started with sellout of major corporate houses. This caused unemployment to grow by about 8.5% .Major corporate houses fired their employees in order to cut their cost. Loss of jobs put financial constraints in the life of general public and less purchasing power to end users. This there by still reducing the demand and thus even more losing to the companies. With consumer confidence so low, recovery will take a long time.
EFFECT ON OTHER COUNTRIES:
Due to interdependencies of various countries on one another market slowdown started in other countries. Import and export are affected. Fall in share market in one country affects the share markets of other countries. So when NASSDAQ reports a fall in the stock market it causes fall in other share markets of various countries. Due to this industrial productivity falls in those counties. Investors are more alert on terms of investing their money as they are the one who suffer losses. Because of lack of finance companies find it hard to recover from the losses.
EFFECT ON INDIA:
Because Indian IT Industry in depended on international clients for its growth Recession cause a major setback in IT industry. Many foreign clients withdrew their setup in India. Many MNCs started to reduce their bench strength in order to cut their cost. Cost cutting drives were evident in Indian IT companies also .Problems in the management of SATYAM caused the share marked to fall even further. This caused the recovery of IT and ITES industry to slow down. The there were many problems the industry is starting to recover.
CONCLUTION:
By adopting careful and steady steps the global economy is finally coming out of the recession. US Economy grew by 1% in the first quarter of 2009. Government has a vital role to play in this scenario. By taking well planed steps this situation can be overcome and Economy of the market will show profits again.