Fiscal 2008-09 was a terrible year by all counts—for companies, consumers, investors and policymakers. What surfaced as a subprime mortgage crisis in the US in 2007, with mounting loan defaults by borrowers with weak credit histories, turned into a financial maelstrom that felled banks, cost hundreds of thousands of jobs and plunged the global economy into recession. The impact was felt in India, too, as foreign investors fled, equity markets crashed, economic growth slowed and banks started holding on to money instead of lending it. The government’s fiscal deficit is worsening, tax collections are down and credit growth is weak. Still, India may be better off than other economies, as some of these indicators show.
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