Impact of Recession on IT Industry

Export-oriented small and mid-tier IT companies were able to weather the storm of
rapid appreciation in the rupee against the   in 2007 and early 2008, but now they
are faced with the stark reality of dwindling orders as the global financial crisis
continues to cause a meltdown across countries and industries, the IT & ITES
sector in India is beginning to feel the heat.
Amid fears of a global recession, companies, especially banks, worst-hit by the
credit crisis have already started to cut or delay spending on information
technology services such as consulting and software development but in the long
term the impact will be minimal as the industry’s fundamentals are strong and the
value proposition continues to hold good meanwhile it may be the time to prune
down the and ensure cost-efficiency in organization operations.
First have a look at sectors will be affected and how much

The sectors most severely affected are Banks, Financial Services,   Real Estate,
Infrastructure and Information Technology,   Automobiles.
Those which will feel a moderate impact of the global crises   are Power, Retail,
Hospitality and Tourism.
The sectors least affected (directly) by the slowdown are   Pharmaceuticals, Oil &
Gas, FMCG, Media & Entertainment .
Tata Consultancy Services is likely to be worse off than its peers because of its
significant exposure to Merrill Lynch. Merrill is also a significant client for Satyam
Computer Services and is evident from the July-September 2008 results which
recorded a net profit of Rs 1,271 crore up only 1.5 per cent as compared to
corresponding period a year ago.
Infosys also accounts for almost 35.7% share from BFSI and 62% share from
America while Wipro accounts for 25% and 63% respectively and will be severely
hit.
HCL Technologies could possibly be the least hit because of its lower exposure to
financial services clients compared to its peers.
Impact of Recession on the Indian Retail Market
The retail market in India is facing slowdown with the ongoing financial crisis
happening across the world markets.   Since the markets always have internally
linked with each other, the impact of the crisis is generally shared among all. The
following circumstances are creating unwelcome interruptions to the Indian retail
industry. The industry hopes for the best alternations to overcome the acrimonious
situations.
Markets in recession worldwide and India too:
The current meltdown in the world markets is shaking the globe today. Not even a
single country seems to be off the hook. The high level of inflation has been a wet
blanket for the global markets. The roots of the world markets are nearly pulled
away with the heavy downfall of the American financial giants. Amongst many
countries, India too not exempted from the impact of world financial crisis. All this
is leading to a temporary recess for the markets from a regular busy schedule.
However, these fluctuations are not new for global market. For the decades long,
markets, across the world, have been witnessing such ups and downs. But the
ultimately fact is that the market growth rate is always constantly high when
comparing to such downfalls.
Economic slowdown:
The Financial crisis is adding to the pressure on global economies. The
International Monetary Fund (IMF) now sees the world entering a major
slowdown. The recovery would depend on three key factors: commodity prices
stabilizing, the crisis in the US housing sector bottoming out, and emerging
economies providing a source of resilience. But, if the current crisis were to last
longer, the emerging economies are more likely to be affected.
The impact on retail industry:
The inflation or the economic slowdown is adversely affecting the retail industry.
With the suddenly disturbed economical status, consumers are gradually losing
interest on buying.
Impact of Recession on Healthcare industry
Healthcare an aspect of the economy that was long felt to be invulnerable to
the economic cycle appears to be  as vulnerable as any other aspect if
recent trends are anything to go on. IMS Health reports that the number of
prescriptions  being filled had lessened by  0.5% from the same time span a
year ago and that the second quarter had even greater results of lowered
spending showing a lessening 1.97% from  the same second quarter time
span last year. The CEO of Walgreens Jeffrey Rein speaking to a conference
of investors earlier in September said that the pharmacy industry had seen
what he called the "tightest prescription market" in the 27 years of his
career. Additionally since 2006 the number of visits to the physician has
continued to decrease by over 1 percent since the end of 2006 lowering 1.2
percent between July 2007 and July 2008. Last month a survey conducted
by the National Association of Insurance Commissioners found that 22
percent of those who responded to the survey did not visit a doctor because
of cost or payment concerns. 686 people responded to that survey.
Additionally health insurance claims from over 250 000 employees  who are
enrolled in varied and diverse  health plans by their employuers saw that the
workers are seeking out health care less frequently. Our own personal
experience with family and friends tends to agree with this concensus and
from first hand knowledge we can attest to the fact that many people who
may require services for injuries or illness are forgoing them in favor of
other kinds of care including herbal remedies up to and including not seeking
out suturing for cuts. What this means to the health care provider remains
to be seen but common sense tells us that if the general public is on a
lowered trend toward basic health care we will be seeing as a result of it
more long term care necessities as the lack of health care catches up with
the general public over time. As basic health care is let go and health
screenings are not attended to we can if trends continue likely expect to see
that more and more patients will let go those minor illnesses until they
become major ones. It can be expected that we will see increases in serious
illnesses which could have been prevented.