Economic Recession in India

Topics: Monetary policy, Stock market, Investment Pages: 10 (3268 words) Published: June 22, 2009
National Conference

Issues, challenges& strategies

Institute of Management & Technology, Faridabad

Economic Recession in India and
Survival strategies
(Technical Session III)

Kavita Verma
DAV Centenary College,

To study the impact of recession on Indian economy
I.Positive Impact
II.Negative Impact
To study the survival strategies for


India is facing the position of recession as globalization showing its negative scenario. As it was started in US and now it's touching the boundary of India also. Recession is a phase in which rupee depreciate, cash crunches, money market slowdown, inflation comes. All in all it's become difficult to bring money from the pocket of an individual. As we know price of the steel, iron goes up, we would like to postpone our purchasing but if we won't spend, how producer could makes his bread. If the producer starts reducing the price of the commodity with such belief that customer buy the product in all case. This will bring only when he starts cutting its cost of production. Cost cutting means reduction in variable cost. As price of steel, iron, equipments, machinery, are touching sky, only way to reduce the cost is the reduction in employees. Hence people fear of their job security. In fear of the job security, people are generally shifting their purchasing. All of them either producer, investor, customer, employee posing each other to create recession Negative Aspect of Recession on Indian Economy

As recession have various negative effects on Indian economy. The capital market was facing the downfall, liquidity is dropping down, an individual don't have money to spend, producers are increasing their price, but to cope with market they are creating deployment. Positive effect of recession on Indian economy

The recession in US led to decrease in demand of products, reduces the price of crude oil. Foreign investors who were not able to find a good return, facing Indian like country, so foreign currency is coming.

Government step:
Government of India can took various steps to bear the pressure of recession. The RBI by reducing the cash reserve ratio can float the money in market, so the liquidity crisis can be faced. And also it can remove burden of VAT on the business class. The government on Jan 5 released Rs. 800 crore to be paid to exporters as duty drawback. If government under its some scheme allows people to convert their black money into white money through investment will also help in boosting liquidity solution. Survival strategies for an Individual

An individual when faces recession time, finds him unable to do anything. But an individual has a great power to reduce the effect of inflation. Firstly an individual pay off its all debts, if any. Secondly he has planned his whole budget on monthly basis, on what product he has spent now, and things of which purchasing can be postponed. Survival strategies for investors

The recession affects the stock market badly. The slowdown in capital market, tensed the investor. The investors now plugging back their money due to fear of recession. An investor after seeing the situation of US, obviously will behave in such manner. In this phase investor has to follow the policy of 'wait and watch'. For compensating the risk he can diversify his portfolio. Survival strategies for an employee

Unemployment is the worst situation emerges due to recession. This has created fear in the mind of employee either the company will retain him or he has to switch to another one. But there is advice to employee this is not a right time to change the job. Stick to your job and try to find your actual worth in the company. Survival strategies for an employer/Business

The businessman is finding impossible for them to stand in recession. The export industry, the IT...

Business standard, 14, march, 2009
The Hindu, 16, January, 2009
Glenn Curtis, Investopedia, 10, January, 2009
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