The Indian Economy Since 1991, 2nd Edition

3

Global Economic Crisis and Indian Economy

B. A. Prakash

3.1 Introduction

The global economic crisis that is being experienced throughout the world, since 2008, is considered as the worst global crisis since the World Depression of the 1930s. The crisis started in the United States in 2007 with the collapse of the leading investment banks, insurance companies and non-banking financial institutions—the sub-prime crisis arising due to excessive credit supply, collapse of the real estate, shares and commodity market, fall in the saving rates of the US economy, huge external borrowing of the US government, etc. Following this, the financial institutions, share and derivative markets collapsed in UK, Spain, Switzerland, Belgium, Germany, Netherland, ...