The rich dad & poor debt: An Indian perspective

Type :

Term papers

Pages :

10 pages

Format :

.doc

Published date :

06/15/2009

Category :

Economics & finance

Sub category :

Economics

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Summary :

Introduction
First stage: Early signs of destruction
Second stage - Securitization & housing bubble
Third stage - When bubble bursts
The Indian economy and impact of the global crisis
1. Indian banking system
2. Foreign investment & overseas finance
3. Derivatives segment
4. Automobile industry
Challenges and issues of the global crisis
Conclusion
References

Abstract

Today the world is facing heat due to sub-prime crisis. All the developed countries and developing countries have caught recessionary fever. Even the powerful economy of china has also felt 'D' factor (downturn in the economic activities). The epicenter of the crisis is U.S.A. It is all about the story of a rich father (U.S.A) who has made poor debt in the form of Sub-prime lending. The father's mistake of excessive debt (levered finance) has resulted into a catastrophe. The indian scenario is that outsourcing business has dried up, finance from overseas market has become difficult due to liquidity crunch at global level and in addition to that banking sector has also adopted policy of preference base lending program. indian automobile industry has also been affected because of lowering of domestic consumer demand. Moreover, there are various challenges that have come up as new peculiarities of present financial system, which is going through a paradigm shift.

This paper depicts the entire process of credit crisis - in the form of story of a rich father (U.S.A) who has made poor debt (Sub-Prime Lending) - its effects from indian perspective and several issues that must be taken into consideration by the government of India at the time of framing macro-economic policies.