India melts along with global economic crisis

The recent worldwide downturn in the housing market of the United States has caused multiple adverse effects on the world economy and the Indian Economics is no exception to this depression.

Global stock markets plunged, as US President George W Bush's tax plan to revive the world's largest economy disappointed investors. In the Asian trade, Indian stocks tumbled over 10 per cent triggering the circuit breaker.

Financial crisis has shown that in an increasingly inter-connected world, there are always knock-on effects as a result, India has increased exposure to problems stemming from the west. Bombay stock exchange suffered huge losses and rupee value underwent a suffering.

Nothing is spared. IT sector, business houses, real estate and not even Bollywood. Tsunami of financial crises has covered most of Indian sectors in its ailing effects.

After nearly a decade of uninterrupted boom, the Indian information technology industry finds the road ahead bumpy, with the global meltdown and financial turmoil in the US and other rich countries catching the otherwise resilient sector off-guard.

With no signs of early revival, even the top firms - TCS, Infosys and Wipro - are bracing for hard times in the year ahead.

A reality check of the industry shows that the Indian software services sector is set for a lower growth this fiscal due to declining IT spends by enterprises worldwide and a volatile currency market.

The global economic slowdown is impacting the Indian software services sector as never before. With the US, Europe and Japan slipping into recession, demand for outsourcing and offshoring IT services will slacken over the next three-four quarters.

The slowdown is likely to last 12-15 months. New application development is expected to be affected the most. Smaller companies looking for funding are equally affected by the tight credit market, while the large outsourcing firms/IT bellwethers are sitting pretty on cash on their balance sheets.

Slowdown will force companies to turn to vendors to help cut costs. Growth in IT outsourcing revenues will remain moderate due to the use of lower-cost offshore resources and smaller-scale outsourcing deals.

the meltdown also impacted projects in the banking, financial services and insurance sectors, which contribute about 40 per cent of software sector revenues.

Coupled with recession, the prevailing negative sentiment is also affecting new projects in manufacturing and retail verticals, which account for 15 per cent and eight per cent of the total revenues.

To sustain the growth momentum, albeit more slowly, Indian IT vendors are shifting to fixed price model from time-and-material billing model. Infosys, Wipro and HCL are moving away from billing customers by the hour to entire projects or in parts to maintain their profitability, as fixed price contracts give flexibility to drive productivity and protect margins.

The current global financial meltdown has increased the scope of developing and developed countries falling into poverty and citizens face life full of uncertainties and more misery.

Even before the current financial meltdown, many people around the globe lived in horrible conditions and suffered from numerous social problems, diseases, exploitation, and oppression.

In previous decades, the call for the business community to engage itself in poverty alleviation, community development and corporate responsibility reached new heights. Most business people are untrained and often oblivious to best practices and the complexity embossed in meeting human needs and solving social problems

Financial crises have adverse effects on India students too.

For seven years in a row, Indians have accounted for the largest number of foreign students in American universities, touching almost 95,000 in 2008. However, 2009 could be the year India loses this position. The number of students for GRE in 2007 was 74,000, and it was just 49,000 last year. Takes for the TOEFL and GMAT are also on the decline.

It has decreased primarily for two reasons. The first reason is the huge uncertainty, which is there across the world. The second major reason is because of the dollar price going almost to Rs 50. It has almost become 25 per cent more expensive for students to go ahead and pursue studies abroad

Students feel that an MBA could give them greater flexibility and stability in their careers, but are disappointed that they may miss out on the global exposure that comes with an American education.

These students are unlikely victims to the global meltdown, but it could be India's gain at America's loss too.

The recent worldwide downturn in the housing market of the United States has caused multiple adverse effects on the world economy and the Indian Film Industry is no exception to this depression. Showbiz ponders over the Global Meltdown and how the recession could affect the Indian Film Companies in addition to who would it hit the most- Film Producers, Corporates or Exhibitors?

It is a difficult time for any company wanting to raise money

NRI steel tycoon Lakshmi Mittal has lost 16.6 billion pounds in the global credit crunch owing to plummeting stock markets in the last four months, media reports.

The 58-year-old Mittal heads a list of ten super-rich losers who together have seen their share portfolios shrink by about 23 billion pounds from their peaks, The Sunday Times claimed.

Another NRI entrepreneur Anil Agarwal, who built up his metals empire, has seen his stock plummet by 2.7 billion pounds.

The height of Mittal's losses dwarfs those of others in the list of top 10 losers, which include Mike Ashley, the beleaguered owner of Newcastle United football club and the retailer Sports Direct.

But after such a hue n cry is the Indian government hearing to these financial crises? This remains a question to be searched.

Both Indian Government and Reserve Bank of India are taking extraordinary measures to tackle the liquidity crisis in the banking system. These measures are meant for to stabilize the financial system at least over short term. But what is alarming is that these extraordinary measures are indicating the severity of the crisis. Investors who have some confidence in the Indian financial system until last week are now resorting to selling at any cost. Most of the investors are selling stocks to deposit money in fixed deposits.

Though financial meltdown continues to heat global currencies, still whole world is looking forward to see an end to this.