IMPACT OF RECESSION IN INDIA

RECESSIONS ARE the result of reduction in the demand of products in
the global market. Recession can also be associated with falling
prices known as deflation due to lack of demand of products. Again, it
could be the result of inflation or a combination of increasing prices
and stagnant economic growth in the west.

Recession in the West, specially the United States, is a very bad news
for our country. Our companies in India have most outsourcing deals
from the US. Even our exports to US have increased over the years.
Exports for January have declined by 22 per cent. There is a decline
in the employment market due to the recession in the West. There has
been a significant drop in the new hiring which is a cause of great
concern for us. Some companies have laid off their employees and there
have been cut in promotions, compensation and perks of the employees.
Companies in the private sector and government sector are hesitant to
take up new projects. And they are working on existing projects only.
Projections indicate that up to one crore persons could lose their
jobs in the correct fiscal ending March. The one crore figure has been
compiled by Federation of Indian Export Organisations (FIEO), which
says that it has carried out an intensive survey. The textile, garment
and handicraft industry are worse effected. Together, they are going
to lose four million jobs by April 2009, according to the FIEO survey.
There has also been a decline in the tourist inflow lately. The real
estate has also a problem of tight liquidity situations, where the
developers are finding it hard to raise finances.

IT industries, financial sectors, real estate owners, car industry,
investment banking and other industries as well are confronting heavy
loss due to the fall down of global economy. Federation of Indian
chambers of Commerce and Industry (FICCI) found that faced with the
global recession, inventories industries like garment, gems, textiles,
chemicals and jewellery had cut production by 10 per cent to 50 per
cent.

How to tackle the global slump?

“Our economy is shrinking, unemployment rolls are growing, businesses
and families can’t get credit and small businesses can’t secure the
loans they need to create jobs and get their products to market,”
Obama said.

“With the stakes this high, we cannot afford to get trapped in the
same old partisan

RINSHA MOHAMMED

I YEAR