CBGA - Centre for Budget and Governance Accountability

Budget Track Volume 6, Track 2, April 2009

Foreword
The ongoing global economic recession, a direct fallout of the financial crisis that originated in the US, has affected not only the developed countries but also many developing and emerging economies across the world. The extent of the impact of this recession has varied across economies depending on their linkages with the global economy. However, it is now being recognized unanimously as the worst ever crisis of capitalism since the Great Depression of the 1920s and 1930s. Consequently, measures to deal with the recession have acquired centrality among the policymakers across the globe. In India too, one of the major challenges for the next Government at the Centre would be to tackle the impact of the economic recession on our economy. While our policymakers have been responsive to the demands of the private corporate sector affected by the economic downturn, many progressive thinkers, policy analysts and activists have raised concerns about their willingness to address the needs of the disadvantaged sections of India’s population who have been hit hard with the recession.

In this backdrop, the present issue of Budget Track focuses on some of the important aspects of the impact of the global economic recession on India. The first article, Tracking Policies and Budget of the Union Government, scans the important developments relating to legislation, policies and budget at the level of the Union Government over the last few months. The second article, Time to Tame Free Finance, develops a perspective on the need for government regulation of the financial services sector, since the genesis of the ongoing recession has been in the unregulated financial sector of the developed economies which, over the last two decades, has spread to developing and emerging economies across the world. In India, the impact of the global recession has been felt both in the financial sector and the real sectors of the economy. The most glaring evidence of the latter has been a huge number of job losses in the country, which is highlighted in the third article, Job Losses in the Wake of Economic Recession. The fourth article, Implications of the Recession on Public Resources and Expenditure, draws our attention to the impact of the recession on Union Budget, which in turn could weaken many of the existing government interventions for socio-economic development in the country. The Union Government has introduced a number of policy packages, known as ‘fiscal stimulus packages’, since December last year to deal with the economic downturn. The fifth article, Fiscal Stimulus Packages in India: An Assessment, briefly examines these policy packages from the perspective of the disadvantaged sections of our population who have been worst hit by the recession. The sixth article, G-20 and the Economic Recession: Where does India stand?, presents an overview of the policy response to the recession advocated by some of the developed countries and India’s position with regard to the same. The Guest Column by Prof. Jayati Ghosh, The Economic Geography of Recession, emphasizes the urgent need for policy measures to address the acute problems faced by farmers and migrant labourers who have been hit hard with the recession. The last piece in this issue, The Economic Crisis from a Feminist Perspective, is an international declaration for structural, sustainable, gender equitable and rights based responses to the ongoing global economic recession.

The articles included in this issue not only discuss some of the important facets of the impact of the global economic recession on India, they also present policy recommendations for the Union Government at the current juncture. We hope our effort would be useful in raising some of the pertinent concerns relating to the ongoing economic recession in the public domain.