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ï A  is a contraction phase of the business cycle.
ï  !"|#$!|% is the
official agency in charge of declaring that the economy is in a
state of recession.
ïThey " as : ³significant decline in economic
activity lasting more than a few months, which is normally visible
in real GDP, real income, employment, industrial production, and
wholesale-retail sales´

ï An economy typically &'"()*+ and tends to go

into a "&#,.

ï A recession normally takes place when consumers loose

confidence in the growth of the economy and spend less.

ï This leads to a decreased demand for goods and services, which

in turn leads to a '- )""'
#' #.
ï .' "/. 0 " and
thus stock markets fall on negative sentiment.
Ghome loan defaults)

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A slowdown in the US economy is bad news for India because:

‡ Indian companies have major outsourcing deals from the US

‡ India's exports to the US have also grown substantially over

the years.

å Indian companies with big tickets deals in the US are seeing

their profit margins shrinking.
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ï Share Market
‡ More people have sold the shares in the indian share market
than they bought in the recent weeks. This has added to the " 
"&  0'
‡ oreign investors have pulled out from stock markets leading to
heavy losses in stocks and mutual funds
‡ Stock broking houses are laying-off people
‡ Because of such uncertainty many people have started saving
money in banks rather than investing
ï IT and Real |state Sector
‡ The key challenges faced by the industry now are inflation and
the psychological impact of the US crisis, leading the companies
to hit the panic button.
‡ Bonuses, perks, lavish parties, and many other benefits are
missing as companies look to cut cost.
‡ India's IT export growth is also slowering down
‡ One of the casualties this time are real estate, where  1
'4 ") all over the country and in this tight
liquidity situation developers find it difficult to raise finances
ï uayoffs and Unemployment
‡ Hundreds of workers have lost jobs in diamond jewellery,
textiles and leather industry.
‡ ompanies in IT industry have stopped hiring and projected
lower manpower need.
‡ irms attached to the capital market are laying off people and
large companies are putting their future expansion plans on
ï Industrial sector
‡ Government and other private companies are  
‡ Projects that are halfway to completion, or companies that
are stuck with cash flow issues on businesses that are yet to
reach break even, will run out of cash.
‡ ar, bike & truck sales down
‡ Steel plants are cutting production
‡ Hospitality and airlines are hit by poor demand
4.53 15 #
ï 4.6)
To survey the effects of recession on individuals
To analyze the survey and come out with

ï 3 16)
Primary data was collected from interaction with
individuals from various industries.
Secondary data was collected from inance related
books, journals and websites.
ï #6)
Due to time constraints the study was done by
interacting with individuals of a
BPO sector in Powai,
Bank employees in Powai,
ertain other employees in Thane- Khopat

ï The work life of the BPO sector, IT sector, & other
outsourcing companies are worst as compared to the
Indian companies.
ï In India almost majority of the employee¶s job are secured
due to less impact of recession in India.
ï Their current profession is affected in terms of promotion
& sacking of bonus for current year.
ï In the current market situation majority of people wishes
to secure their current pay.
ï It sector & other foreign based companies are terribly hit
by the recession.
ï The person who in invest for short term gains is most
affected then the long term investor.
ï Almost all are able to meet their financial commitments
expect of few who are being laid off.
ï Many people¶s personal life is affected due to the rising
prices of essential commodities.
ï |veryone believes that the market will require another 2-3
years to recover from recession.
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' ÷   

es 60

No 40
 " 1  ""


es 30

No 70
In the current market situation
what will you prefer to go for

' |#' 

Hike in salary 60

To secure the
current pay 30

To get in to any
job 10

Ready for salary

cut 0
‡Table ± 4.1

rhere will you prefer to work now

' "|#' 

Aboard 10

India 90
!| 3 8|

' ÷   

es 80

No 20
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es 60

No 40
orrective Steps to heck Recession

‡ RBI needs to neutralise the outflow of II money by

unwinding the market stabilisation securities that it had used
to sterilise the inflows when they happened.
å This will mean drawing down the dollar reserves which is
important at this hour.
å In the IT sector, there should be correction in salary offerings
rather than job cutting
å Public should spend wisely and save more
å Taxes including excise duty and custom duty should be
reduced to lighten the adverse effect of economic crunch on
various industries
å In real estate the builders should drop prices, so as to bring
buyers back into the market.
å Also, the government should try and improve liquidity,while
RR and SuR must be cut further
å Indian ompanies have to adopt a multi-pronged strategy,
which includes diversification of the export markets,
improving internal efficiencies to maintain cost
competitiveness in a tight export market situation

‡ India is a strong domestic demand story, so any

slowing in the US is likely to have a more
muted impact on India.
‡ Strong growth in domestic consumption and
significant spending on infrastructure are the
two pillars of India¶s growth story.
‡ No sector has a dominant influence on earnings
growth and risks to my estimate is limited.
‡ orporate India is also learning to master the art
of efficient capital management, reduction in
costs and delivery of value-added services to
sustain profit margins.
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ï ormer inance Minister ashwant Sinha:

‡ INDIA is currently facing two different kinds of crisis
on the economic front. The first is self-inflicted, and
the second of the world by the US.
1) Self-inflicted:-
A number of steps to tighten liquidity, force
financial institutions to raise interest rates and not only
make credit unavailable but also very expensive.
The rising prices of the demand-inelastic essential
commodities would not respond to monetary measures
and that these steps would have an adverse impact on
Thus, by its mistaken policies the government made matters
worse. Money became scarce, it became unaffordable, it had an
impact on demand, both consumer and investment, and the
economy, as predicted, slowed down.

2) rorld by US:-
|conomic Advisory ouncil to the PM felt that the main
global shocks for India would come from the sharp increase in
the prices of primary goods, particularly of crude petroleum and
food. The turbulence in the international financial markets was
considered to be just one among the many factors impacting on
the Indian economy.
International financial institutions like the IM also failed
to anticipate the crisis.

ï The central bank even cut its benchmark repo rate by 150
basis points Gbps) to 7.5% on October 19 in an attempt to get
some of that money moving out of the bank vaults. Still no
ï The problem also seems to be in the system¶s liquidity
absorption capacity. rhatever steps the government takes at
the moment such as, providing cheap cash to corporate
through a variety of refinance windows
ï The government has tried addressing the issue by spending
on infrastructure and by cutting taxes to boost demand.
!! :  7

ï http://www.commodityonline.com/hottopics/US-
ï http://www.fibre2fashion.com/industry-
ï http://www.indiadaily.com/editorial/09-12f-04.asp
ï http://www.economywatch.com/world_economy/usa/indo-

ï3|  6)