Global Recession and Its Impact on Telecommunication Industry: An Empirical Dissection

Abstract

India is much more integrated with the world economy. Both current and capital accounts are complementing to each other. The economic slowdown that appears to have begun in the USA in September, 2008 has some negative impact on Indian economy. The most immediate and adverse effect of this global financial crisis on India is an out flow of Foreign Institutional Investment (FII) from the capital market. This withdrawal by the FIIs led to an exponential depreciation of the rupee. The banking intermediaries and non-banking financial institutions have been suffering losses. The recession generated the economic crisis in USA and other developed economies have adversely affected India's exports of software, IT services and service industry. For fighting this crisis, Government of India responded through the public expenditure and investment to face the recession. Government of India pumping the liquidity into the system through monetary policy and by using effective fiscal policy .India has revived to high growth, this new growth should have to come not from some new speculative bubble but from enlarged government expenditure that directly improves the livelihood of the people. The present paper is an attempt to analyze the impact of recent global financial crisis on Indian economy with special reference to telecom sector and also to analyze the level of economic crises on other sectors of economy, also this paper deals with effective determination of existence of relationship between GDP and telecom sector with respect to global recession.