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How will the economic recession effect India and when will we able to get over it?

ByIn Knowledge Info

Before I begin let’s understand what is recession and some concepts related to it.

Recession– It is the time period for a country when it faces more than two consecutive quarters downfall in the economy. In simpler words when a country has recorded two or more back to back fall in it’s economy quarterly it is then called recession.

Technical Recession– It’s a two quarterly consecutive down economic period of a country. (This is India’s situation).

Economic Depression– This an economic period where a country faces a recession for more than a year (happened in 1929 to USA).

Now let us begin with the effects of recession :-

According to the World Bank it estimated 90% of the countries will be going under recession because of the COVID-19 pandemic. Well, it was believed that India will have a bad time recovering from it, but actually India did a lot better than expected as there was a single digit fall recorded this quarter which was expected to be in double.

Let’s see some of the most important points you guys want to know about this topic:-

  • Impact of recession on Informal sector in India.
    • Firstly informal sector consists of those people in the country who work for wages and are also referred as low-skilled labours. Now the impact on them because of the recession had not been much as they have been suffering before the covid pandemic.
    • No doubt the economy has been hampered in this pandemic, which has resulted in huge loss of jobs in the informal sector majorly and other sectors too. Well, it will be a tough task for the government to decrease unemployment level in the upcoming days as we know the situation around the world.
  • Impact of IT firms on the Indian economy during recession?
    • IT firms have done a lot better in the recent years and mostly in the pandemic as work from home was always an option for the employees so the firm did not stop working.
    • While logistics and entertainment industry were still working in the lockdowns, so we cannot say that the IT firms were the main source of economic growth in general.
    • While we cannot ignore the fact that India has been emerging as the fastest growing IT industry in the world during this recession so it will make a huge impact in the future.
  • Impact the Agriculture Sector and Farmers Income.
    • Well, here is a relief, during the lockdown many of us noticed that demand in food increased, which here gives the advantage to the farmers to grow and earn more.
    • To uplift that the government introduced the new farm bill law which made the farmers’ trade more easy. Yes, I know the law has some loop holes which I have discussed in my article (THE FARM BILL LAW 2020) but if you look at the bigger picture the law is very helpful for the farmers to trade by their own. The behavior is varied according to the different ideas and intentions of each farmer.

NOTE: INDIA IS STILL UNDER TECHNICAL RECESSION AND HOPEFULLY THE WAY WE CAME BACK STRONGLY IN THIS QUARTER, WE WILL COME IN POSITIVES IN THE NEXT 2-3 QUARTERS.

So how will India overcome this recession period?

Well, it’s not simple to overcome this recession, but India can use the following list to overcome and become the largest economy here:-

  • India can take advantage of US-China trade war to it’s business expansion across the globe.
  • The government can also legalize the crypto-currency and can charge fees on the entities using it.
  • Also, if we in the future are able to fully digitalize our currency then black money would be eradicated from our system to some level which can lower the income tax rates too.
  • The other way is to direct the foreign investment into the domestic startups which are backed by the government and also creating space for foreign offices here to raise employment.

Well these were my points, What are your’s? Please do comment and write your suggestions. The best best one’s will be highlighted on the website.🧠

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