The severe recession in the USA and other countries have crippling effect on world countries, including India. It was reported that the un-employment rate is the highest since 1983. The recession was compared with that of 1929.
The world stock markets are under severe pressure, and stock markets are declining month after month.
The root cause for recession can be traced to

• Unrealistic "real estate" prices during boom years, and the cascading effect that followed.
• The home prices have appreciated almost 100% during the past few years
• The stock markets have appreciated several times without solid fundamentals
  

The speculation systematically infused in to the public by the media, and vested interests. US along with other other governments fueled the speculation (forgot to govern?). As a result, stock markets have sky rocketed, and the home prices followed. Unfortunately, the "boom" kept the end users away.

The banks and insurance companies are taking the direct hit of the recession. Motor industry, and other products and services industries are getting severely impacted.

Is it recession? Technically, yes. But, it is a correction being done for the wrong policies of the governments, particularly the United States. Unfortunately, most other governments including India followed the same policies as that of the US and are getting severely effected.

How much time it might take? It is reported that the current situation may last for a few years. The recovery time may be different for different countries. Faster the governments acknowledge the realities, and take corrective measures, lesser will be the time for recovery. If the governments tend to ignore the severity (down play it), it is likely to take several years before the normalcy is restored.

It is going to irreversibly change the economies of world countries. The currencies are going to depreciate at a faster rate, and savings are going to become less significant.

It is arguably the biggest challenge that "democracy" has faced to date.