Looking Beyond

Recession
Definition
 A recession is defined as a decline in
countries GDP growth for two or more
consecutive quarters of a year.

 Recession is generally preceded by several

quarters of slowdown.
Causes Of Recession
 A recession commonly takes place when
consumer loses confidence in the growth of
economy and spends less.

 Borrowers start defaulting

Effect Of Recession
 This leads to a decreased demand for goods
and services, which in turn leads to a
decrease in production, lay-offs and a sharp
rise in unemployment.

 Investors spend less as they fear stocks

values will fall and thus stock markets fall on
negative sentiment.
The Big Question ? ? ?
 IS INDIA INTO RECESSION…
Discussion Continues…
 The truth is, Indian economy is also facing a
kind of slowdown. The prime reason being,
world trade does not functions in isolation.

 All the economies are interlinked to each other

and any major fluctuation in trade balance and
economic conditions causes numerous
problems for all other economies.
Where Did The Problem Started ?
 Appreciation of Rupee

 Rising prices of Oil and inflation

 The sub-prime crises in the US, the fall of stock

market, Fall of financial and banking giants and
of course for all IT outsourcing companies in
India the Satyam Saga..
Current Situation
 IT industries, financial sectors, real estate
owners, car industry, investment banking and
other industries as well are confronting heavy
losses due to fall down of global economy.

 Global recession, inventories industries like

garment, gems, textiles, chemicals and
jewellery had cut production by 10 per cent to
50 per cent.
Advantage India Inc.
 Indian companies have large dependencies on outsourcing deals from the US and UK but still
its has manage to be on 3rd best place to be in the recessionary times.

 India inherits a big consumer market 300 million people on lowest debt ratio of 22% of GNP

 One of the Highest saving rate of 27 percent

 India Incorporation has projected a growth of 6% for 2009-10

 After tremendous financial meltdown more than 85% of Indian organizations have not freezed
any salaries

 With current 12M retail outlet a Triple fold growth in Retail Industry is estimated by 2K15

 Stable Banking and Stringent financial system

 By Sep-09 FDI was already up by 56% . The FDI inflows in July this year were at $3.51 billion
against $2.25 billion in the same month last fiscal year.
What lies Ahead..
 A weak dollar could bring more foreign money to Indian markets. A year after recession the INR
has started appreciating against $

 The deflation in market occurred due to statistical base effect not because of any fall in demand

 Indian companies with big tickets deals in the US might see their profit margins shrinking. Hence
necessary steps for moving towards the new market has became very vital

 Indian manufacturing sector has to ramp up economies of scale, and improve productivity and
operational efficiency, thus lowering prices

 The tourism and health tourism sector should be aggressively promoted. Given the availability of
talented professionals, and with a distinct cost advantage, India can be the destination of choice
for health tourism which can attract huge foreign currency
And The Way Forward..
 Tax cuts and tax band changes already in place to increase the purchasing
power

 Hike in government spending by nearly 2% specifically in Rural

Infrastructure

 Reducing the unrealistic prices of property

 Focus on Technology and Hi-tech industry

THANK YOU
Amit Goyal
Ankur Sachdev
Ashish Ahuja
Elizabeth Joseph
Kanika Gupta
Rohit Raman