Recession

By

Mr. Krishnkant Naugaria
This presentation covers all the aspect and the
impacts of the recession on the globe and India as
well, and the measures to control for the same have
been also mentioned.

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What is Recession???

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A recession is a business cycle contraction, It is a
general slowdown in economic activity.
Recession is the economy shrinking for two
consecutive quarters (=6 months) with a
decrease in the GDP (=Gross Domestic Product)

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There is a joke that economists quote to explain the
Difference between “Recession & Depression”
RECESSION
= WHEN YOUR NEIGHBOR LOSES HIS JOB

DEPRESSION
= WHEN YOU LOSE YOUR JOB

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How to know recession?
Indicators to say a nation is in recession;

- People buying less stuff
- Decrease in factory production
- Growing unemployment
- Slump in personal income
- An unhealthy stock market

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Causes of recessions
- Currency Crisis
- Energy Crisis
- Under Consumption
- Over Production
- Financial Crisis

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Strengths
 Good work force can be prepared by recruiting skilled

employee during the recession easily
 Low cost work force
 Mistakes or the wrong decision can be analyzed
 Enough time to maintain work life balance

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Weaknesses
 Household income decreases
 Business profit decreases
 Buying capacity decreases
 Demotivation in people arises
 Living standard of people decrease which tends to

Unhealthy living environment
Unhygienic and low grade edibles demand increases

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Opportunity
The it can be splited into two categories :
1- Opportunities to public
 Goods and services are available at lower cost
 Slash in the price of real estate
 Investment become easy

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2- Opportunities to organization
 Bureaucracy and politician becomes more co-operative
 The efficient workers are able to survive in the

organization, these in turn leads to increment quality
goods and services
 The remunerations other expanses are decreased
which in turn increases the saving
 Policies become flexible

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Threats
 High unemployment & job cutting rate
 Bankruptcies & black money circulation increases
 Inflation increases & GDP decreases
 Crime graph increases & research rate decreases
 Productivity decrease & dumping of product increases

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Effect of recession on INDIA
On the Negative side :
 The decrease in consumption in developed countries,
Indian export market could be hited
 As the developed countries are the largest market for
Indian IT exporters, so a weak global economy can
land to dip in IT business
 Both the import and export will be affected

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Cont..
On the Positive side :
 The decline in the commodity price & hence easing of
inflationary pressure
 Slash in the crude oil price will help in bringing down
the inflation.
 There may higher inflows of foreign investors, this
will lead to appreciation of rupee

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How to come out of recession?
It is unhealthy for any nation to be in Recession. So, government will take
certain countermeasures
to eliminate or reduce the effect of recession

 Government has 2 plans

Fiscal Policies
(By Govt.)
Government influences the
economy by changing how
it (Government) spends
and collects money
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Monetary Policies
(By RBI)

RBI manipulates
the available supply of
money in the country

Fiscal
Policies

1] Tax cuts for
businesses or
for individuals

More money
available for
spending

Demand picks
up; Market
can recover;
2] Automatic
Some income to
fiscal policy;
unemployed
Unemployment
people to spend
Insurance
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Monetary
Policies

1] Reduce reserve
ratio

More money
available for bank
to give loans

2] Lower the
interest rates

Individuals take
more loan

It becomes an
3] Use its own
income to Govt.
reserved
to inject money
money to buy
into the
Govt. bonds Mr. Krishnkant Naugaria market
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Demand picks
up; Market
can recover;

Suggestions
 Promoting people to purchase and invest in the









market
More Spending by Government to create new jobs
Limiting production
Attractive policies for the people having cash reserve
Cut down in labour size
Cutting down loan interests and promoting them
Organizing investors summit
Bringing old closed public mills to the functioning

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Appreciation & Depreciation of
Rupee
At first let us assume that in case, you go to a bank and
asks the bank that you intend to buy US$100, bank ask
you to pay Rs 5400. Now after some time you go to
bank,
 Depreciation, you pay Rs 5500 means you have pay
more to receive the same amount of US $.
 Appreciation, you pay Rs 5440 means you have to pay
less amount to buy the same amount of US $.

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Why we are able to stand in or
after recession???
We have economics sizeable enough to matter on the
global scale and are growing at a faster rate then the
developed world.
Since the import from India is not so remarkable, hence
any crisis in the west which leads to lower
consumption in there would not be much adverse
affect on India

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Conclusion
 There is a panic among investors & they are rushing to






get out of risky assets like stocks.
As the outcome of all these development the demand
for gold has increased.
As gold is seen as a safe haven, its price has risen to
record high.
The industries are sensitive to high interest rate.
The RBI & our Government is prepared for any
repercussion in the financial market

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RBI’s Power or Government’s Power is double-edged
sword; Sometimes, their policies to recover from
recession can be counter-productive and it may further
worsen the situation.
Nation’s recession is controlled by the actions of
everybody living in that country.

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References
 Moneycontrol.com
 Employment news
 Magazines

Frontline
Outlook
 Newspaper

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