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A SYSTEMATIC

ANALYSIS ON
RECESSION

Presented By:-
DEEPAK SONI
UIT-RGTU
BHOPAL

. and wholesale-retail sales”. What is Recession? Ø A Recession is a contraction phase of the business cycle. Ø They define recession as : “significant decline in economic activity lasting more than a few months. industrial production. real income. Ø National Bureau of Economic Research (NBER) is the official agency in charge of declaring that the economy is in a state of recession. which is normally visible in real GDP. employment.

Ø This leads to a decreased demand for goods and services. . which in turn leads to a decrease in production. Ø A recession normally takes place when consumers loose confidence in the growth of the economy and spend less.What causes the Recession? Ø An economy typically expands for 6-10 years and tends to go into a recession for about six months to 2 years. lay-offs and a sharp rise in unemployment.

recession set in. US crisis hits India US faced major crisis because of - • Subprime mortgage crisis (home loan defaults) • Rising oil prices at $100 a barrel • Global Inflation • High unemployment rates • A declining dollar value All this slowed down the growth of the economy and as the GDP growth rate fell to 2%. .

Source data: Realtytrac press releases of “US foreclosure market report” .

Oil prices graph .

Low GDP growth indicating Recession in .

Indian companies with big tickets deals in the US are seeing their profit margins shrinking. . Impact on India A slowdown in the US economy is bad news for India because: Indian companies have major outsourcing deals from the US India's exports to the US have also grown substantially over the years.

3. Stock broking houses are laying-off people Because of such uncertainty many people have started saving money in banks rather . This has added to the fall of sensex to lower points. Foreign investors have pulled out from stock markets leading to heavy losses in stocks and mutual funds 4. Anatomy of economic depression in India ØShare Market 2. More people have sold the shares in the Indian share market than they bought in the recent weeks.

ØIT and Real Estate Sector The key challenges faced by the industry now are inflation and the psychological impact of the US crisis. lavish parties. and many other benefits are missing as companies look to cut cost. perks. Bonuses. leading the companies to hit the panic button. where building projects are half-done all over the country and in this tight liquidity situation developers find it difficult to raise . India's IT export growth is also slowering down One of the casualties this time are real estate.

. textiles and leather industry. Companies in IT industry have stopped hiring and projected lower manpower need.Layoff and unemployment ● Hundreds of workers have lost jobs in diamond jewellery. Firms attached to the capital market are laying off people and large companies are putting their future expansion plans on hold.

or companies that are stuck with cash flow issues on businesses that are yet to reach break even. will run out of cash. Projects that are halfway to completion.Industrial sector ● Government and other private companies are reluctant in starting new ventures and starting new projects. bike & truck sales down Steel plants are cutting production Hospitality and airlines are hit by poor demand . Car.

Recession in TATA MOTORS ● Tata Motors lay off 400 more workers. ØReason of Recession in TATA MOTORS  The main reason of recession in Tata motors is that the financers are not ready to financed old (second hand vehicle) vehicles so fleet owner couldn’t sell his vehicle and buy new vehicle. . TATA MOTORS to shut two commercial vehicle plants for six days .

Tata finance should finance old vehicle on his term and condition.●Comments The TATA finance is the subsidiary of TATA motors which finance only new TATA vehicle it doesn’t finance old vehicle. .

Position of the Banks in MP .

5%. Recession in the real state and properties sectors. Interest rates of the banks increased up to 2 to 2. . Economic Downfall in the share markets.●It happened because:- The investors pull out their money from share market and deposited in the banks.

Encourage exports. Improve Tourism. 4. Improve Tax Collection. 6. Set Aside Large Amount for Social Welfare. . 8. Provide Accessible Credit for Business. 5. Control Expenditures in Other Fields. 7.Endeavour to overcome Ø There are following steps to overcome recession 3.

Future scope of this analysis Our work is based on the present recession. In future we utilize this data to overcome recession and decline rate of production rate in industries. This data is also being useful in finding alternative option to overcome the present and the fore comings situations and with the help of this data we can maximize the productivity of any organization .

Special thanks to PROF. A.C. TIWARI HOD INDUSTRIAL & PRODUCTION ENGG. & WORLD BANK CO-ORDINATOR (TEQIP) FOR SUGGEST US THIS BURNING TOPIC & INVALUABLE SUPPORT THANKS .