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Economics
Submitted by:
Zonunmawii
R/No.- 22
Section- S1013
Regn No.- 11003689
Acknowledgement
My deepest thanks to my lecturer Mr. Mithun
Kumar Guha for the guidance and supports in
preparing my term paper.
Introduction
Industry accounts for 28% of the GDP and employ 14% of
the total workforce. However, about one-third of the
industrial labour force is engaged in simple household
manufacturing only. In absolute terms, India is 16th in the
world in terms of nominal factory output. A financial crisis
is a situation when money demand quickly rises relative to
money supply. Until a few decades ago, a financial crisis
was equivalent to a banking crisis. Today it may also take
the form of a currency crisis. Many economists have come
up with theories on how a financial crisis develops and
how it could be prevented. There is, however, no
consensus and financial crises are still a regular
phenomenon. A stock market crash is an example of a
financial crisis. In short term financial crisis can also be
called ‘recession’. Economics describe recession as
reduction of country’s GDP (Gross Domestic Production)
for two consecutive quarters i.e. an increase in
unemployment (1.5% in a period of 12 months).
The main reason for this was the large inflows of equity
and debt capital. Inward FDI flows, which totalled $20.7
billion during April-September 2008, remained at $21
billion during the corresponding period of 2009. Portfolio
inflows, which had fallen by $5.6 billion during April-
September 2008 when foreign institutional investors
booked profits and repatriated capital to meet
commitments at home, rose by $17.9 billion during April-
September 2009, when the crisis in the developed
countries was still ongoing.
Causes of Recession
• Currency crisis
• Energy crisis
• War
• Under consumption
• Overproduction
• Financial crisis
• Price of fuels
Tata has reported that its profit fell from 34.1 percent to
3.47 billion rupees because of the slower growth in the
industrial production. Further, the company has also
recorded a 20% decline in the sales as compared to last
year. And with its Nano making a big impact before the
downturn as such, but after the downturn may hold a
bleak future for the world's cheapest car, because the
consumer spending has gone very low.
Effects of Recession
• Bankruptcies
• Credit crunches
• Deflation
• Foreclosures
• Unemployment
Impact of Global financial
crisis on stock markets
Conclusion
Peoples are thinking that recession is becoming a disaster
for the Indian economy but in my believe recession is
actually a great time to start a new venture. Great time to
take advantage of the lack, when talent is available,
resources is cheaper. Facts whenever there is lack person
outsource more. Western companies started viewing India
as good place to outsource big research work, website
development, designing work etc. Long-term market then
they can say when the recession in the US financial
market come down, Indian IT and BPO/ KPO companies will
be in good position to get more outsource projects from
the US companies. Recently Indian outsourcing software
and web development industry have started a new
strategy to compete with recession by keeping their
expenses as such and higher the working time of the staff,
higher the quality of out put and reduce the out put time.
•Eg:- Apex Decisions (Pilot Project Strategy).
Bibliography
• www.google.com
• www.harvard.org
• www.wikipedia.com
• www.oppapers.com