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With the figures of stock market this weekend , its clear that people are beginning to fear that India is headed towards the recession . After the financial crisis in US , the world economy is at brink of recession . Does India have such strong fundamentals to withstand this financial storm ?

With crisis in Stock market , people are in panic mode , Slowdown in India is not a problem but don’t mix it with recession ( A negative growth ) . Indian Government has been saying that there would be an economy slowdown this year with countries including china are growing slower this year .

It was the worst performance by the market this weekend , the market was close to hitting 10% circuit filter twice this session , But the question here Is India immune to this global financial crisis ..?
With most of the expert saying we are interconnected with the global markets , as US could be treated as the root of the tree and rest all as branches , since the root is effected branches will automatically feel the effect .

Indian Finance Minister said - that ” the Indian financial system was regulated well, it does not dispay any of the problems that are affecting the global financial system because India does not have a lot of innovative products whose risk characteristics cannot be assessed. ”

I don’t agree with him , but i do agree that after this slowdown Indian economy had a bright future , heading towards a good growth momentum .

well the situation World is facing is due to the liquidy crunch, but in India this crunch is due to some factors. And I think the problem in India is only temporary.

The liquidity crunch that is playing out in the global markets is a result of crisis of confidence among banks. The collapse of large banks and financial institutions such as Bear Stearns, Lehman Brothers and AIG has shaken confidence of banks to freely lend to each other, as everyone is guessing about who is next. As a result, many banks which relied on short-term wholesale funds from other banks, are finding it difficult to raise such funds any longer, leading to a liquidity crunch.

In contrast, the liquidity crunch in Indian markets is largely a localised and short-term phenomenon, triggered by factors such as regulatory intervention in forex markets to stabilise the depreciating rupee, etc. There is some rub-off effect of the global liquidity crisis on India as well, because foreign institutional investors are selling domestic equities exacerbating pressure on rupee. However, this has only a marginal impact on liquidity. There is no crisis of confidence among banks in India to lend to each other, as is being seen in global markets.

liquidity crunch is main prob along with inflation if u listen to our finance minister ...