IMPACT OF RECENT RECESSION ON INDIA AND US. Page│ 3
A recent news in the Economic Times says that the Govt. of U.K. hasdecided to mortgage its reserves in order to face the acute recession.It you look at it from the point of view of a businessman, recession isa transitory phase. The Business cycle dating committee of the NationalBureau of Economic Research [NBER] has another definition. It profiles the business that has peaked with their activity in one reason and fall naturallyin the next season. It regains its original position with new products or salesand continues to expand. This revival makes the recession a mild phase thatlarge companies can tolerate. As the fiscal position improves there is noreason to worry. Recession can last up to a year. But when it happens year after year then it is serious.
1.2)Are we facing recession or not:
Yes, for the simple reason that not only our neighbors but our friendsare unemployed. There is less of business talk and more billing worries.Transitory recession is good for the economy, as it trends to stabilizecompanies to slow down and take stock. There is a saying, ‘when it’s toughthe tough get going and going’. The weaker companies will not survive the brief recession also. Stronger companies will pull through then resources.Then is it time to worry? When you are facing a foreclosure, when the chipsare down and creditors file cases of recovery.Firms face closures when they go through recession and are not ableto recover from losses. If, at this time, they are not able to sustain their prices and stocks then there is more trouble. Even when the recession periods get over, they will not be able to do well. If a business survives arecession period they should be able to survive a depression. But how many