How can India beat recession

Govt. should come up with more infrastructure projects which will live up the construction industry and related job market.

India is not in recession yet. We may have a slow down in growth. Today the IMF predicted our growth is going to be around 6% in '2009.

When you ask how recession can be overcome, the question is how does it happen in the first place. The answer to this is when people have lowe0red expectation regarding their wealth, wages and income then their retributive activities tend to generate recessive  forces. So policies should always be directed to maintain the income levels of populace. This is done through maintaining the asset prices(equity, realty).

So there is the answer once the stock market gets going we are out of woods, which I believe is one of  the moral responsibilities  of the Central Bank. Then probably the realty prices should be avoided crashing often.

Then generally the policy makers should concentrate on the propensities, preferences and long term expectations of the populace which should be set right.

We are having a general election in the country. As elections involve a lot of spending, they work a bit like a stimulus package. This polls would give India an immense opportunity to recover from the global slowdown.

According to reliable sources data on a sample of 274 companies the revenue for 2008 was Rs.1476.34 billion and profit 180.73 and for 2009 it is 1427 and 154 respectively till now for India. So to say we are in recession is not perfectly right though it seems some Info tech companies stopped hiring or is going slow on hiring. This may be a problem just for the infotech division of the service sector. Manufacturing may be in normal course, though we see companies like DLF were made to pay back some part of their huge debt or put in more collateral. Out of the 1000's of corporates only few have pledged their promoters stocks for more collateral. This is not unhealthy signs at all.

Infrastructure may be alright a Keynsian antidote for recessetating a slump then generaly if there is no inventory problem companies can start investing as the captial/labor goes up growth will pick up which is the general macro economic solution. Savings rates need not have to be high. A high level of savings into a slowing down state will cause all sorts of problems, in fact in normal times too it is not advisable to have high savings rate.

In India we have high savings rate because we are not a contingent claim economy, we cannot predict our future even in normal times for each citizen. So they save for future consumption. If there is enough endowment and insurance facitlities to diversify away these sorts of contingencies like western developed nations then savings rates will come down as required by Keyns. Too much savings and too high interest rates feed confusion even in nomral times.

So I think we are not in recession yet and may be we will start growing again at faster rate in about 4 to 5 months and stock market I think is not showing any business cycle.

India have require tallent , manpower and resources, govt. should take proper step. which govt. i dont know. some miracle may b. thankyou.

Hi George,

India should attract more & more FDI. India should instill confidence in the rest of the world as a favourite destination for cross-border investments. We should hope that India is back on the radar of global investors during this period....