Every economy faces ups and down at any time. It is totally a psychological phenomenon that the country's economy is not working well. Government has designed various types of policies to overcome this problem but still the problem of recession makes a great challenge against Indian economy. Indian economy is suffering from this problem till 2008 when global depression of USA hits the country. Production and productivity of various sectors of the economy has decreased due to the recession. The income of the people is not increasing which creates a demand gap thus it is very important to rise the income of the people to meet out the depression. Present study tries to find out the impact of recent recession on Indian economy. With the help of student’s ‘t’ test this affect has been traced out.

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Keywords: Recession, Indian Economy, Income, Saving, Psychological Phenomenon.