The latest and most frequently used word in the world is “Recession”. Anyone and everyone is talking about recession.
Almost all the companies have cut down on onsite travels, administrative cost and other perks. There are no more free lunches literally. Companies are introducing Performance Improvement Plans and giving zero hikes or bonuses. Everything has only one reason. RECESSION.
From a middle class citizen’s point of view, Restaurants have become expensive, shopping malls are empty, and food prices have gone up too. The fuel prices have gone down by almost Rs10 and still the auto guys crib for more money as it is recession time. Even the local vegetable vendor blames recession for increase in the prices. (I wonder why it is only the recession that is affecting the prices and why isn’t the falling inflation causing any price falls.) Everything is going up except my income and I too blame it on recession.
Is India really going through a recession or is it just the cold we have caught because USA sneezed? Are we just projecting a slowdown as a recession? Of course it has affected India because of the outsourcing and we too had job losses. But can we call it a recession still?
There is a difference between recession and slow down. The dictionary meaning of recession is two continuous quarters of negative growth where as during slowdown there is growth but it is slow. And who says India has negative growth? The RBI is still predicting a GDP growth of about 7%.
Our banking sector is still very strong and the interest rates are still high compared to other countries. We can still pass through this recession in US without getting into it.
Of course the government is trying to make things better by reducing the interest rates, announcing stimulus packages and various other measures to pump money into the market. We can be hopeful that the various stimulus packages being announced by the Indian as well as global governments will give a boost to sectors like infrastructure, automobile, cement and metals. This will increase the business and also the ‘recession free’ politics ‘industry’ is ready to infuse money in the name of general election and that should be a boost to the economy as well.
Apart from all this we also have some responsibilities t improve the situation. We need to use our resources effectively and at the same time focus on innovation.
Recession forces people to spend less and save more for adverse situations but we Indians are not new to the idea of savings. We just need to chuck the extra credit card spending, check our expenses, promote the right things and viola we’ll be on our way out of this crazy situation. Being thrifty will surely help us get out of this slowdown earlier than others.
This is the time to capitalize on things which we are good at. Tourism is going to be hit because of global recession (obviously there will be less number of people visiting the Taj Mahal this year) but we can promote health tourism which is still a cheaper option in India with best of services available at cheaper prices compared to USA or Europe.
Agriculture is still the backbone of our economy. Let us make that stronger. We need to get the farmers back to the fields and the higher dollar value can get us more money for our agriculture exports.
Instead of worrying about losing outsourcing jobs we can start innovating our products. IT industry which has been worst hit due to dependency on US can start focusing more on product innovation and less on services. Once the situation improves we’ll be less dependent on US plus we can be a major player too rather than just being the back office of the world.
Remember how India tackled the bans that were imposed by the world especially US after the nuclear tests. We became almost self sufficient in the things that were banned by other countries.
When the next boom comes, we can reap the benefits of effective resource utilization and innovation and be ahead of other economies. We surely have the talent and means to get out this slowdown without slipping into recession.
I strongly feel this economic condition is just a wake up call for us to be more responsible and more cautious and to realize our abilities to drive away the recession blues. Jaago Re!