Global Resession Features and Characteristics
INDIAN BUSINESS SCENARIO IN RECESSION :- ITS CHARACTERISTICS & UNIQUE FEATURES
Abstract :
Recession is the result of reduction in the demand of products in the global market. Recession can also be associated with falling prices known as deflation due to lack of demand of products. Again, it could be the result of inflation or a combination of increasing prices and stagnant economic growth in the west.
Indian Economy has sustained itself inspite of global recession. This is because of domestic savings and corporate earnings which are financing investments. There is low export dependence, a large consumption based and high employment which has helped sustained consumption. Banks also have sustained themselves inspite of global recession
On the other hand, the fiscal house is in terrible shape. Just because domestic banks are state controlled does not mean they have low NPAs–often, they keep on reassigning credit to bad borrowers to preserve the illusion.
To ensure a durable exit from the crisis, and to build foundations for sustained and broad-based growth in a globalized world, developing countries in 2010 and beyond must draw the right lessons from history.
In the current crisis, China, India, and certain other emerging-market countries are coping fairly well. These countries all had strong external balance sheets and ample room for fiscal manouvre before the crisis, which allowed them to apply countercyclical policies to combat external shocks.
They have also nurtured industries in line with their comparative advantage, which has helped them weather the storm. Indeed, comparative advantage — determined by the relative abundance of labor, natural resources, and capital endowments — is the foundation for competitiveness, which in turn underpins dynamic growth and strong fiscal and external positions.
To pursue its comparative advantage and
Abstract :
Recession is the result of reduction in the demand of products in the global market. Recession can also be associated with falling prices known as deflation due to lack of demand of products. Again, it could be the result of inflation or a combination of increasing prices and stagnant economic growth in the west.
Indian Economy has sustained itself inspite of global recession. This is because of domestic savings and corporate earnings which are financing investments. There is low export dependence, a large consumption based and high employment which has helped sustained consumption. Banks also have sustained themselves inspite of global recession
On the other hand, the fiscal house is in terrible shape. Just because domestic banks are state controlled does not mean they have low NPAs–often, they keep on reassigning credit to bad borrowers to preserve the illusion.
To ensure a durable exit from the crisis, and to build foundations for sustained and broad-based growth in a globalized world, developing countries in 2010 and beyond must draw the right lessons from history.
In the current crisis, China, India, and certain other emerging-market countries are coping fairly well. These countries all had strong external balance sheets and ample room for fiscal manouvre before the crisis, which allowed them to apply countercyclical policies to combat external shocks.
They have also nurtured industries in line with their comparative advantage, which has helped them weather the storm. Indeed, comparative advantage — determined by the relative abundance of labor, natural resources, and capital endowments — is the foundation for competitiveness, which in turn underpins dynamic growth and strong fiscal and external positions.
To pursue its comparative advantage and