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Recession,with its all aspect and impacts with measures to control it.
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Mr. Krishnkant Naugaria
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.
11/16/2013
Mr. Krishnkant Naugaria
What is Recession???
11/16/2013
Mr. Krishnkant Naugaria
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 adecrease in the GDP (=Gross Domestic Product)
11/16/2013
Mr. Krishnkant Naugaria
There is a joke that economists quote to explain theDifference between “Recession & Depression”
RECESSION
= WHEN YOUR NEIGHBOR LOSES HIS JOB
DEPRESSION
= WHEN YOU LOSE YOUR JOB
11/16/2013
Mr. Krishnkant Naugaria
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
11/16/2013
Mr. Krishnkant Naugaria
Causes of recessions
- Currency Crisis- Energy Crisis- Under Consumption- Over Production- Financial Crisis
11/16/2013
Mr. Krishnkant Naugaria11/16/2013
Mr. Krishnkant Naugaria
StrengthsGood work force can be prepared by
recruiting skilled employee during the recession easily
Low cost work forceMistakes or the wrong decision can be
analyzedEnough time to maintain work life balance
11/16/2013
Mr. Krishnkant Naugaria
WeaknessesHousehold income decreasesBusiness profit decreasesBuying capacity decreasesDemotivation in people arisesLiving standard of people decrease which
tends to Unhealthy living environment Unhygienic and low grade edibles demand
increases
11/16/2013
Mr. Krishnkant Naugaria
OpportunityThe it can be splited into two categories : 1- Opportunities to publicGoods and services are available at lower
costSlash in the price of real estate Investment become easy
11/16/2013
Mr. Krishnkant Naugaria
2- Opportunities to organizationBureaucracy and politician becomes more co-
operativeThe 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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Mr. Krishnkant Naugaria
ThreatsHigh unemployment & job cutting rateBankruptcies & black money circulation
increasesInflation increases & GDP decreasesCrime graph increases & research rate
decreasesProductivity decrease & dumping of product
increases
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Mr. Krishnkant Naugaria
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
11/16/2013
Mr. Krishnkant Naugaria
Cont.. On the Positive side :The decline in the commodity price & hence
easing of inflationary pressureSlash 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
11/16/2013
Mr. Krishnkant Naugaria
It is unhealthy for any nation to be in Recession. So, government will take certain countermeasures
to eliminate or reduce the effect of recession
How to come out of recession?
Government has 2 plans
Fiscal Policies(By Govt.)
Monetary Policies(By RBI)
Government influences the economy by changing howit (Government) spends and collects money
RBI manipulates the available supply of money in the country
11/16/2013
Mr. Krishnkant Naugaria
1] Tax cuts for businesses or for individuals
More moneyavailable forspending
Demand picksup; Market can recover;
2] Automatic fiscal policy; Unemployment Insurance
Some income tounemployed people to spend
Fiscal Policies
11/16/2013
Mr. Krishnkant Naugaria
1] Reduce reserve ratio
More moneyavailable for bankto give loans
Demand picksup; Market can recover;
3] Use its own reserved money to buy Govt. bonds
It becomes anincome to Govt.to inject moneyinto the market
MonetaryPolicies
2] Lower the interest rates
Individuals takemore loan
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Mr. Krishnkant Naugaria
SuggestionsPromoting people to purchase and invest in the
marketMore Spending by Government to create new
jobs Limiting productionAttractive policies for the people having cash
reserveCut down in labour sizeCutting down loan interests and promoting themOrganizing investors summit Bringing old closed public mills to the functioning
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Mr. Krishnkant Naugaria
Appreciation & Depreciation of RupeeAt 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 $.
11/16/2013
Mr. Krishnkant Naugaria
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
11/16/2013
Mr. Krishnkant Naugaria
ConclusionThere 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
11/16/2013
Mr. Krishnkant Naugaria
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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Mr. Krishnkant Naugaria
ReferencesMoneycontrol.comEmployment newsMagazines Frontline OutlookNewspaper
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Mr. Krishnkant Naugaria11/16/2013