Project Title:

Euro-Zone Crises- Its impact on the Indian Economy

Introduction:
The Euro Zone debt crisis can be termed as the next big cause of concern
for global economies after the recent American subprime crisis that began
with the bursting of the US housing bubble. The American subprime
mortgage crisis saw rise in sub-prime mortgage defaults and foreclosures,
which resulted in a decline in securities backed by mortgages. The current
Euro zone crisis threatens to impact economies of nations even with a
robust domestic growth.
Need to study
Now, India being a domestic economy it becomes a prime matter of
concern to be discussed. As of 2011, India's public debt stood at 62.43%
of GDP which is highest among the emerging economies.
However, inflation remains stubbornly high with 7.23% in April 2012, the
highest among its BRICS counterparts.
Furthermore, India is shown to experience a relatively significant increase
in purchasing power compared to the other countries; this is exemplified by
the fact that even though India's purchasing power is less than that of
Japan in 1995, India is expected to have equal purchasing power as Japan
by 2020.India must be implementing certain factors , such as foreign
investment, that allow for an increase in purchasing power and, thus,
economic growth.

This report aims at discussing the causes behind the Euro Zone debt crisis
and its impact on the Indian Economy.
We have tried making a humble attempt to understand the concepts of
Macro Economics such as trade, capital flows, financial regulation and
governance of global financial institutions and globalization and also as to
how these concepts can be co-related to analyze and predict the outcomes
of a volatile situation as that of the Euro Zone debt crisis.
References:
The Economic Times, article, 10-10-2011 edition
Tirole, J. The Euro crisis: Some reflections on institutional reform
http://idei.fr/doc/by/tirole/eurocrisis.pdf
http://www.thehindubusinessline.com/features/investment-world/article2288107.ece
http://www.careratings.com/Portals/0/CareAdmin/NewsFiles/Economics/Impact%20of%20Euro%20cris
is%20and%20global%20slowdown%20on%20India-12-05-2011.pdf