Growth, fiscal consolidation yet to return to pre-financial meltdown levels

A look at how the global financial crisis of 2008 affected the Indian economy

How did the global financial crisis of September 2008 affect the Indian economy? Looking back at how the events unfolded 10 years ago, it becomes quite clear that no other single economic event in several past decades has had as huge an impact on India’s macroeconomic fundamentals as the global financial meltdown.

Consider the following numbers. 

The Centre’s fiscal deficit had been brought down to a very respectable level of 2.54 per cent of gross domestic product (GDP) by 2006-07. This was a healthy outcome of fiscal consolidation efforts made in several years previously to bring the deficit down to