Starting as a crisis of sub-prime mortgages in the United States, the US financial crisis became intertwined with a global economic crisis during 2007–09. All major economies were adversely affected. While some countries went into deep recession, others escaped with limited erosion in their growth rates. But the crisis also accelerated the pace at which a new world economic order is emerging, the centerpiece of which is a group now referred to as the G20 group. Together the G20 economies comprise about 90 per cent of global gross national product, 80 per cent of world trade (including EU intratrade) and two-thirds of the world population. The epicentre of the world economic power, which had until recently been concentrated in the hands of the G-7 economies, is now more wide spread with considerable economic power slowly shifting to emerging economies like China and India.
In this paper, the author looks at the effects of the global crisis as it affected the G20 members with special reference to India. The global crisis also witnessed a weakening of the efforts regarding international burden sharing for a long-felt need for support for achieving both the MDG goals and international climate change related efforts. He also examines both conventional and innovative methods of financing the international effort for achieving the MDG objectives and the approach that India may develop in this context as part of the G20 group.
This chapter is divided into several sections. The following section looks at the position of the G20 economies as they emerge out of the global crisis. The next section examines the Indian economy as it faced and emerged out of the crisis. Next the author looks at the position of the G20 economies in the context of international burden sharing in the post-crisis world.