'This is not surprising since Indian banks have very few branches abroad. However, the indirect impact on the economy because of the recession abroad is very much there.'

While India's import bill reduced sharply as a result of the fall in international commodity prices, particularly crude oil, the recession abroad had adverse effect on exports of goods and services.

The capital flows were also hit. 'In contrast to the strong inflow of over $108 billion in 2007-08, last year saw a net increase of only $9.1 billion in capital flows,' Rangarajan said.

The budget estimates of total expenditure for 2009-10 are 37 percent higher than the budget estimates of last fiscal.

Rangarajan later told reporters that central fiscal deficit during the current fiscal would not exceed the estimated 6.8 percent.