The global economic recession is projected to impact the economy of India adversely taking down the GDP for this year according to paper titled “Indian Economic Outlook 2008-09 and 2009-10” from the Indian Council for Research on International Economic Relations (ICRIER). The authors also argue that “There is real downside risk that the growth rate could plummet to the pre-1980s levels if appropriate countercyclical measures are not taken immediately and are not urgently followed by necessary structural reforms”.

As the recession continues to slow consumer demand, governments across the world are stepping up their of goods and services. This is true in India as well as the chart shows below. The government consumption expenditures as a percentage of GDP is rising faster as the private final consumption expenditure is going down.

For more details on the Indian economy click Indian Economic Outlook 2008-09 and 2009-10