In era of Globalization Our financial system is not insulated, Global financial meltdown does impact us. All these factors are affecting the growth rate of our economy which was growing at a rate of 9%.
We saw huge surge in stock markets mainly due Foreign Institutional Investors (FII) inflow. Post credit crisis, FIIs are pulling the money out from emerging markets, including India. Our stock markets have already declined over 70% from its peak in last one year.
Our banking system is affected by the liquidity crisis, businesses are facing extreme problem in financing their projects, or even, raising funds for working capital requirements.
With revenues drying up, cost cutting is the need of the hour. Abandoning new projects, putting existing projects on back burner. Employee are being laid-off.
The global financial meltdown is percolating downwards and affecting individuals like us. The impact on each one of us is clear and present.