Is common Indian man financially safer than in the west during this financial crisis ?

This question comes to mind again and again why and how the Indians are not getting hit hard as the investors in the west in last couple of months. The answer seems to lie in two simple facts

1) Indian investors do not have exposure to the equity market,
2) Indian economy is till cash economy and that gives room for black money.

Let's discuss the first issue. Indian investors did not have much idea about the equity market and even the people who have knowledge do not bother to invest heavily into the equity market. One of the reasons is it is still considered as a investing in the gamble/lottery. Though it is not completely true but the financial crisis has proved these people were right. Ideally, investment in any equity should be on the basis of the performance of the company and future expected growth. But we have seen time and again that this does not hold true. People get hurt lose money and within ten years there is again mad rush for the equities. All the investors, naive to guru, forgets all the fundamentals and start buying all and any available equity in the market. This mad rush is the cause of the the crisis rather than the equity market but we are left with no words to defend the financial market after the insane of the financial managers in last couple of years.

In the west, emphasis is on putting more money in the equity market. This is more true in case of America than other countries. Even the pension funds invest heavily into the equity market. But this against the whole concept of pension. People do not want the best return from their pension funds but they are more interested in secured return in their retirement age. In the name of liberalization, Government of India wanted to put pension funds of Indians but fortunately it is still safe.

People in the small cities still dont have access to equity market. Some of the private sector banks have their presence in the small cities and try to lure customers by proposing assured 20% return but Indian investors are not fool enough to get into the trap of private sector banks. I am not against the banks, but i am against the way they do business. They do not tell even the half truth the customers when they sign for any service/product with the banks and later on the banks charge them hefty fees.

Other reason for safer economy is the black money. Most of the growth in India is by the money that comes from the pocket of the shopkeepers and the businessmen who do not pay even a single penny in taxes. For example every shop in any big market in Delhi (Lajpat Nagar, South Ex, Karol Bagh, Sarojani Nagar or any other) cost in crores, these businessmen earns thousands of rupees everyday and Crores in a year but very few of them pay taxes. They have money. But their sons and daughters wants to spend some part of that money so we were seeing some growth as consumption rose.

Even the reality market runs on black money. Very few people declares the real deal price of the property and both the parties involve saves lot of money on taxes. This money has originally comes from tax evasion anyway. So the Indian reality market will not suffer as it suffered in America. Of course the first time buyer who live on salary will not be able to buy the new aged quality apartment and it will ease the pressure on this segment. This is good for everyone. There was no reason why the price of one two-bedroom apartment was around Rs 50 lakhs in Gurgaon. It needs to come down anyway.

I feel Indian economy will just have price correction rather than recession.