Economic Recession and India

In this article, we will discuss the economic recession
1. What is an economic recession?
2. What are its causes?
3. Recession in India.

So, first, let’s define “economic recession.”

In a broad and simple sense, economic recession is linked to the country’s economic system. We can say that when there is a continuous decline in the production of goods and services and the gross domestic product has decreased for more than a quarter if it is in negative growth, then we call such a situation “an economic recession.”

If we simplify it further, then we can say the goods and services are available in the market, but there is no buyer to buy the goods and no customer to use the services that are available in the market, either due to a shortage of money or because the price of the goods or services has gone up so the customer can’t afford it. and this kind of market condition continues not for 2 or 3 days but for more than 3 months, we can say that there is an economic recession. That is, the economic movement method gets stuck and the market becomes stable. We can also relate it in this way: when people have less money, they want to spend less. which they can save by spending less. The sales of the company decrease when customers spend less, which reduces the profit of the company, and the company starts retrenching employees to earn more profit, due to which the situation of unemployment arises, people become unemployed. which has an effect on his family.

Reasons

1. stoppage of money, loss of purchasing power, and reduction in savings
2. War is a situation that can harm any country’s economy; most war-torn countries are experiencing an economic recession. When there is a war, there is a large-scale loss of life and property. leading to an economic crisis.
3. Epidemics are also a cause of economic recession, such as the sudden arrival of an epidemic, which causes the government to take strict measures due to the risk to life, resulting in an economic crisis.

Impact

1. Unemployment increases
2. People don’t have money to spend.
3. Fail to save money.
4. Decrease in investment.
5. Decline in economic growth
6. 6.Decrease in credit demand
7. Decline in industrial production

Economic recession in India

India has seen a total of four recessions since independence.

1) 1958
The first economic recession hit India’s economy in 1957–1958, when the GDP growth rate was minus 1.2%.

2) 1966
Due to the severe drought in 1965–1966, India’s GDP growth fell; this year it was -3.66%.

3) 1973
The main reason for this year’s recession was the oil crisis. Oil exports were banned from countries that sided with Israel in the Yom Kippur War, due to which the price of oil increased by 400 percent. India’s GDP growth in 1972–1973 was -0.3 percent.

4) 1980
The reason for this year’s recession is the big blow to oil production worldwide due to the Iranian revolution. India’s oil import bill almost doubled due to an increase in import prices, and India’s exports declined by 8 percent. India’s GDP growth in 1979–1980 was -5.2.

When an epidemic like Corona struck in the year 2020, the closures caused by the epidemic harmed India’s economy once again.