However, this was primarily because, until relatively recently, liberalization of the capital account was limited, and India was not an attractive destination for finance capital until 2004. In the past four years, changes occurred on both these fronts, and the Indian economy experienced a surge in capital inflows that exerted upward pressure on the exchange rate and reduced macroeconomic flexibility. It is in this context of much greater global economic integration than even a decade earlier (with the value of all current account transactions amounting to more than 110 per cent of GDP in 2007—2008) that India is now experiencing the unfortunate collateral damage of the global financial crisis and economic slowdown. These have already affected output and employment quite substantially.