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recent recession

recent recession

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Published by bhavesh07
all history of us and india.
all history of us and india.

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Published by: bhavesh07 on Nov 22, 2009
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04/22/2013

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IMPACT OF RECENT RECESSION ON INDIA AND US. Page│ 1
1)INTRODUCTION
Recession is the result of reduction in the demand of products in theglobal market. Recession can also be associated with falling prices known asdeflation due to lack of demand for products. Again, it could be the result of inflation or a combination of increasing prices and stagnant economicgrowth in the economy.Recession in the West, in 2008 especially the United States, is very bad news for our country. The companies in India have most of out sourcingcoming from the United States. When our exports to United States increasedover the past years, exports for January declined by 22%. There is a declinein the employment market due to the recession in the West. There has been asignificant drop in the new hiring which is a cause of great concern for United States. Some companies have laid off their employees and there have been cut in promotion, compensation and perks of the employees.Companies in the private sector and government sector are hesitant to takeup new projects. And they are working on existing projects only. Projectionsindicate that up to 1 crore persons could lose their jobs in the current Fiscalyear ending March. The 1 crore figure has been compiled by the Federationof Indian Export Organization [FIEO], which says that it has carried out anintensive survey. The Textile, Garment and Handicraft Industry are worseaffected. Together they are going to lose 4 million jobs by April 2009according to the Federation of India Export Organization [FIEO]. There hasalso been a decline in the tourist inflow lately. The real estate has also a problem of tight liquidity situation, where the developers are finding it hardto raise finances.
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IMPACT OF RECENT RECESSION ON INDIA AND US. Page│ 2
IT Industries, Financial sector, Real Estate Owners, Car Industry,Investment Banking and Other Industries as well are confronting heavylosses due to fall down of global economy. Federation of Indian Chambersof Commerce and Industry [FICCI] found that with the global recession,inventories industry like Garments, Gems, Textile, Chemicals and Jeweler have cut production 10% to 50%.
1.1)Definition
:
Recession is not to be confused with depression.Recession means a slowdown or slump or temporary collapse of businessactivity. In its early stage it can be controlled in a methodical matter.Experience helps to avert total collapse. Unchecked, it leads to servedepression. Depression is the dead end. It is the time to close shopcompletely. It is a total state of irrevocable economics failure. When acountry is doing well as round its Gross Domestic Product [GDP] is on therise.Overall economy is bullish; it is not only the stock exchange that tellsriches to rags stories but even small businesses. It all adds to the burden onthe National Exchequer. An economist may give a detailed, comprehensivedefinition of recession. But for the Layman who has been affected knows itonly when he loses his job and has no money to pay his credit and loans.Recession is when the customer faces foreclosure and the banker comesknocking for recovery of his loan. Many companies and even countries go bankrupt for want of liquid funds and cash flow for even daily requirement.
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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
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