GLOBAL FINANCIAL CRISIS OF 2008 AND ITS IMPACT ON INDIAN CAPITAL MARKET

Abstract

In recent years, India's economy has become more open. In the Balance of Payments, gross capital and current account flows increased from about 22% in the 1980s to over 100% in 2009-10. With this greater openness, the Indian economy would be influenced by global market patterns and real and financial shocks. Furthermore, the connection between advanced countries' IIP cyclical components and India increased from 0.12 in 1970-1992 to 0.50 in 1993-2010. Financial integration has increased as a result of these changes in the extent to which Indian trade and economic cycles are linked with global cycles, making it vital to analyse the stroke of this Crisis. The current research focuses on global financial crisis' extent and causes, as well as India's response. The influence of the financial and real sectors, as well as policies, are analysed in assessing the stroke of the crisis of 2008 on the India and its markets. The first component of the paper looks at the brunt of this crisis on India. In the second half of the paper, India's financial and real sectors’ role is examined, and then, the study examines India's response to the crisis of 2008.