Depression 2008: the Indian scene
INTRODUCTION
Whatever the silence or contradictory comments come from the Indian government and its most eminent economists, the beginning of the erosion effects of the global crisis in 2008 India can not be neglected Since depression is well into the Indian economy. The economic activities such as the decision on the closure of engines Jamshedpur plant Tata for three days, the decision of Ashok Leyland to run only three days a week for next two months, lower interest rates, reduced RRC, has lowered the repo rate cut in SLR, the stock market index in reverse, Rs 275,000 crore (Rs 2.75 trillion) published by the Reserve Bank of India (RBI) to help companies and investors, etc. previously indicated and fairly well proven in the first week of November 2008 that RBI and the government accepted the entry of depression in 2008 in the Indian economy.
Status pre-depression
After gaining independence in 1947, India began its economic development after 1951 under the hands of experience a range of literature well proven strategies and plans for variegated, used by the creation or made by the developed economies West, outside the natural resources available. India has been more enthusiastic and ambitious on behalf of the loans have sought Arms and well proven by the Western world in the fight against the problem of development. Therefore, instead of starting from the beginning and covering the whole industry, being attracted and seduced by the fruits of industrialization surprisingly fascinating, began efforts to have, but aspired to be developed and grabbing fruits of it in a hurry. Thus India has lost his sequences in the developing world. He ignored agriculture which was the backbone of the economy. Thus the agricultural sector development far behind the level needed to fuel industrialization of India to the mark. Agriculture based small and cottage industries has become broken and towns became ruined. This raised a huge mass of unemployed in the area widespread in rural areas.
The unemployed began to migrate to urban areas seeking employment. Urban development and industrialization there was not a level sufficient to absorb the mass migration and to provide Facilities correct urban life. Consequently, mushroom growth of slums is born fast eventually turned into patches of slums in cities and large towns, within either 20 or 25 years. What has hampered urban growth and urban life. On the other hand, in areas Rural intervened acute shortage of manpower energetic, service centers, infrastructure, intellectuals etc. hindered the development Rural development for agriculture and rural life has remained below slang. Therefore, even after traveling a long road of development economic planning, the state of affairs of rural India still remains almost the same as it had been before the planning. He remained an enormous gap between urban and rural populations in wealth, wages, education and income. In addition, the rural-urban migration, because the pitiful state of affairs in rural areas, leading to uncontrolled urban growth. Thus, instead of global development, development unbalanced and unfair to the Indian economy is now driven it.
However, the central government has attempted to make the situation better by initiating the process of economic reforms in 1991. Unfortunately, the formulation of this process was almost the same as those of soles Five Year Plans and, therefore, this also could not bring the desired change. Therefore, wide dissemination of general unemployment prevailed in rural and urban areas (for economic assessment 2006-07, the estimated number of unemployed has increased by 7.98 million dollars in 1983 to 9.02 million in 1993-94 to 10.51 million in 1999-2000 to 13.10 million in 2004-05. These figures are amply evident that the average increase per year in the number of unemployed was higher and higher will be without any effect, even the economic reforms initiated in 1991. The average increase per year in the number of unemployed was 1.04 lakh (0.104 million) people during the period of ten years from 1983 to 1993-94. He became 2.48 lakh (0.248 milliom) during the period of next six years and increased to 5.18 lakh (o.518 dollars) during the period of five years from 1999-2000 to 2004-05.). In addition to this a large elite number of politically, socially and economically sound and efficient emerged in cities and towns. These elites intervened in the formulation and implementation development plans, a hand, and in setting priorities, on the other. plans and the development of urban Indians became oriented and focusing on the rich minority. Thus, the majority of the poor and the rural economy is now ignored. The unemployment situation in the regions rural and urban areas has become almost uncontrollable. The government has become politically weak. Therefore, its priority is to become rich if Please minority so he can run. To mitigate the resentment and discontent among the general mass, it has to play a role pseudo moments to address some rural areas and some times the mass urban AC in various employment programs and plans failed. The condition of unemployment in rural areas is more embarrassing than the urban unemployment from the rural unemployed are remaining deprivation.
Increasing inequalities in income distribution and the persistent lack of capital in India, like other developing economies has become more rigorous Because of the black money. Therefore, the Indian economy had been, but undergoes inflationary pressures in the late years because of Self-heavy (not productive) investment in welfare and employment schemes (with the exception of infrastructure) by governments to be dependent on foreign aid, funding for the World Bank, external debt and deficit financing.
EMERGENCE OF THE DEPRESSION
As the eighties and nineties starting end of the inflation trend has begun to be converted in depressive tendency in developing economies also account the following facts.
(I) A significant portion of the money Black is out and is converted into white money because of the different schemes, moves and drives to convert black money into white. It was added productive investment, whereby an increase in supply on the market has emerged. Although employment has also been increased and adding to demand, but less has been added to the demand and supply due to very unequal income. d
(Ii) In the process of globalization of multinationals have been allowed to enter the economy. The Multinational made significant investments productive and thus added considerably to the total supply on the markets, but employment increased and could also add to the demand total, since a large part of their production value (revenue) went to their respective capitals in the form of profits. In addition, these companies kept a significant portion of their income in the form of undistributed profits generally deposited in foreign banks.
(Iii) expansion of equity markets has been a boost in developing economies in the mid-nineties due to some small scams and the computerization of stock markets. However, a big scam always creates uncertainty in the stock market, and therefore the harm from market. But, on the contrary, small scams still contribute to increased trading activity because small scams create small peaks and but common in lower stock prices.
(Iv) Globalization makes access of depression hit developed economies Easy to Indian markets. Therefore, the overabundance of consumer goods began to be thrown away. Goods produced in economies developed are of better quality and cheaper (because of lower production costs) and the mass consumption in India is very remarkable. These two factors Indian consumers attracted to these dumped goods as demand for consumer goods related to domestic production in India became lost to a considerable degree.
CURRENT SITUATION
Each of the events discussed above helped to increase supply, but lower demand for consumer goods in the Indian economy. The combined effect of these events made a significant change whereby, until mid 2008, the Indian economy became a prey to depressive tendency in its other markets that the market is related to basic consumer items. The market for basic consumer items is still playing at the price high and inflationary pressures. Because depression from financial and industrial giants take some time in the drip trade and medium and small industries of consumer goods generally. The trickle down of depression gain momentum when begins heavy decline in depression stricken giants.
The following detail, based on the columns in the newspapers News 1 to 8 December 2008, it is amply evident in the current measure of depression and measures taken to control the situation in the Indian economy.
(1) stop production in Telco Construction: another group company Tata, Telco Construction Equipment Co. Ltd. (TELCON) said to stop production for four days (December 4 to 7) in its plant in Jamshedpur. This company has experienced a decrease of 50% of its production during the last month and a half. Mr. Ramchandra, President of the TELCON Workers Union, said the plant has observed 'block closer (Shutdown) twice in the last month. In addition, the company manufacturing diesel engines for the joint ownership of Tata Group has also exercised power over five days last week. India leading manufacture of commercial vehicles, Mahindra and Mahindra, has experienced a decline in sales of its vehicles by 18 583 vehicles in November 2007 to 11,569 vehicles in November 2008. The total sale of 17,844 vehicles last year that fell to 10,430 vehicles this year. The second largest company manufacturing cars in India, Hyundai Motor India Ltd., has also declined from 23.3% of its sales on the market within the month of November 2008 compared to the month of November 2007. The home sales market in November 2008 is 14,605 cars against 19,052 cars in November 2007 (Hindustan, Hindi Daily, Dt 03.12.2008, page 13, Baghpat Edition).
(2) Tata Motors has decided to close again its plant in Pune for three days, from 5 to 7 December 2008 .. This is the second time in the last fortnight that the company decided to arrest production (Hindustan, Hindi Daily, Dt 04.12.2008, page 13, Baghpat Edition).
(3) During the week ending 22 November's rate of inflation fell 0.44 point to 8.40% and went as it was 8.84% for the week ended Nov. 15. Inflation in the week ended August 2 this year was 12.91% which was the rate of inflation the highest observed in recent 16 (Hindustan, Hindi Daily, Dt 12.05.2008, page 13, Baghpat Edition).
(4) The company's second largest car India, Hyundai Motor India Ltd., has decided to sell its popular SANTRO GL (Solid) model, 10 years old price of Rs 2.99 lakh (Rs million o.299) for the next 10 days. Easing worth Rs 15,773 in the form of free insurance and accessories are given in the non-AC. Relaxation worth Rs 26,000 SANTRO on GLS model and from Rs 7000 to Rs 25,000 on Gatz, Accent and Verna models is provided. Society of India's largest car, Maruti has already started giving discounts from Rs 15,000 to 35,000 rupees on its cars. In addition, General Motors has made redevelopment Rs 58,000 on SPARK. An impairment Rs 90,000 on FORD FIESTA is given. Tata Motors is also to relax on its cars from Rs 20,000 to Rs 30,000 (Dainik Jagran, daily) Dt Hindi. O5.12.2008, page 13, edition Baghpat).
(5) Mr. GK Pillai, Commerce Secretary, said Wednesday, December 6 2008, as budgetary support worth Rs 150 billion (Rs fifteen thousand crores) would be given to infrastructure projects while Rs 20 billion assistance dollars (Rs two thousand crores) would be extended to exporters affected depression. first time in a period of ten years, it has been a decrease of 12% in exports over the Indians. According to the government survey of 121 export oriented units, 65,000 jobs were cut during the last three months. Seven thousand jobs are canceled fabric, and this figure could reach 1.2 million (twelve lakhs) up at the end of the year. Due to the completion of the pressure depression in the economy, the Indian government has reported lower Rs 5 oil prices and Rs 3 in the price of diesel (Hindustan, Hindi Daily, Dt 06.12.2008, page 13, edition Baghpat).
(6) Under the recession trickles under "India" has been declared "After years of being blamed for losses jobs in America and elsewhere, domestic high-tech companies and outsourcing companies through a slowdown of their own. The test id of global power by forcing them to reduce recruitment, wage freeze, postpone investments and fire software programmers and call center operators. "The country has suffered from the effects of global crisis, the capital loss that Western investors have fled to the safety of American Treasury undermining Indian banks and corporate balance sheets. Satyam Computer Services cut its recruitment plan for less than 10,000 to 15,000. Some companies, after undertaking recruits, are postponing their departure date. Wipro has rejected 2.5 percent of its workforce in the second quarter. American Express has dismissed 200 of its 6,000 workers in India and Goldman Sachs announced last month (November) to reject about 10% of its workforce in India (Hindustan Times, English Daily, Dt 06.12.2008, page 17).
(7) A third block more (shutdown) within only one month has been declared India's largest vehicle manufacturing company, Tata Motors at its plant in Jamshedpur from 8 to 13 December 2008 to succeed his second block already observed near the 5 to 7 December. In addition to him, the leader in manufacturing diesel engines Cummins Tata, Tata company ownership is observation block nearly six days at its plant in Jamshedpur on Saturday, the 6th inst. This is his second block more than the first was from November 26 to 29. SBI has declared a special credit facility of Rs 110 billion (Rs 11.000 crore) to help the housing and small industries. RBI has reduced the repo rate from 7.5 to 6.5% and the rate of reverse repo 6-5%. Yes Bank reported a decline of 0.5% while the DPP said ICICI Bank down 1.5% in DPP and BPLR (Hindustan, Hindi Daily, Dt 07.12.2008, p. 1 and 13, Baghpat Edition).
(8) Mr. Sameer Chopra President, Association of BPO industry in India, said that America and Europe, due to the reduction policy enterprise wages and to fight against the bear market, consider strengthening back in the near future alternatives such as outsourcing. In this If Indian companies will be most adversely affected because most Indian software companies depend on America and Europe business. Thus, 0.25 million jobs (2.5 lakh) people working in the BPO sector in India, are under the threat of a global depression and they may losing their jobs during the first quarter of next year (Dainik Jagran, Hindi Daily, RD O7.12.2008, page 16, Baghpat Edition).
(9) To control the ever increasing prices and saving the economy from the grip of depression, the central government of India said yesterday, December 7, 2008, a recovery plan worth Rs 30 Kharab (Rs 3000 billion) (Hindustan, Hindi Daily, RD 12/08/2008, Front Page, Baghpat Edition).
CONCLUSION
The detail above shows that the corrective measures be taken to combat cons depression of the Indian economy are the same and on the same line as those taken by America and European countries. India has also committed the mistake of using both tools has proved successful in the Western world, when moving economic development. I think that in the case of the fight against depression in 2008, India will again repeat the mistake of using the same tools as the western world is without the assistance of success in the fight against depression. Therefore, India should recognize Unlike its economic characteristics from America and European countries and to find compatible ways and means to control and combat depression in 2008.
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