In the 1950s and 1960s, United States, UAE, Switzerland were internationally pre-eminent in economy and technology. After 30 years the economic landscape has changed considerably and indeed continues to change with amazing rapidity. Situation of strategic economic equality has come to exist in the triad regions of North America, Western Europe and the Pacific Rim (including India and China).
India is considered as a developing country having population of more than a billion, second highest in the world opened up the economy in the early nineties following a major crisis that led by a foreign exchange crunch that dragged the economy close to defaulting on loans. The response was a slew of domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral organisations. Soon the economies of India would be much larger and become a powerful force in the global economy. More over India is growing at the rate of eight to nine percent per annum where as most of the developed countries including US, Canada, Japan and countries of EU and UK are gradually developing until last year. The economies of India have achieved tremendous growth almost each year becoming two of the hottest emerging markets in the world. The changes in India are potentially more dramatic. India is beginning to make the transition from imitator to innovator. The gross domestic product (GDP) of India is $1100 B (2007) or RS.55000 B. It is approximately two percent of the GDP of the world i.e. $55000. The new policy regime radically pushed forward in favour of a more open and market oriented economy. Major measures initiated as a part of the liberalisation and globalisation strategy in the early nineties included scrapping of the industrial licensing regime, reduction in the number of areas reserved for the public sector, amendment of the monopolies and the restrictive trade practices act, start of the privatisation programme, reduction in tariff rates and change over to market determined exchange rates. Over the years there has been a steady liberalisation of the current account transactions, more and more sectors opened up for foreign direct investments and portfolio investments facilitating entry of foreign investors in telecom, roads, ports, airports, insurance and other major sectors. Recently all over the world the recession of 2008-09 was created by financial institutions and they were the worst hit. However, the cascading impact can be seen in all the economies of the country. The foreign direct investments have gone down drastically because of funds crunch. Lack of foreign investments has dried the resource pool and many projects had to be scrapped. It had direct impact on trade and productivity which declined in the absence of financial resources and led to massive lay offs adding to the unemployment rate. Many manufacturing economies have seen a fall in exports following the change in inventory cycle. Domestic demand was constrained by credit crunch and stringent economic policies. Oil and essential commodities will be playing major role in deciding the recovery model of many economies. The unemployment rate is expected to go down with reopening of the international trade and boost to production once the economies align back to the revised inventory cycle. A strong recovery is expected in the developing countries as compared to the developed nations. It is expected that conditions for international trade will be challenging keeping in view that most of the exports are driven by developed nations. International policy responses were largely successful but needed an international coordination to bring the recovery on full swing.
Global recession also hit Indian economy during the last quarter of 2008.Many private sectors particularly in IT, export field etc has a massive trade with other countries is dumped during recession and employees were dropped out from their job....
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