Economic Times answering this question What’s a Recession? has made a fair analysis with some writing about India
There is no doubt that India has been affected by the recession that has beset the US economy, especially in sectors which are export-oriented or are dependent on outsourcing. However, the RBI governor last week assured that India would not see recession even if uncertainty continued globally. He stated that growth would be moderate and pegged GDP growth for 2008-2009 at 7.5-8%(ET 2Nov)
However, let us take this in the right perspective as far as India is concerned….
INDIA is a Insular society, that has more Savers then Spenders, where more than 80% do not get affected by international crisis.
Take the recent example of Divali; Whilst the great expectations of Retailers, FMCG, Consumer Durable companies may have not been met, one wonders why everyone is not really shouting or shutting businesses.
The fact is the Flab is being corrected; Super Normal Profits shall now become Normal and the overall correction required in all aspects of economy shall take place over the next 6 – 18 months.
When one talks about recession, you cannot help wonder about the Pay Revision for Government employees that has taken place & who still have their jobs, as do employees in private sector and are paid every month & still have the purchasing power, are learning to wield it – in metros buy when there is a good deal – not necessarily during the festive season.
People shall always need things and though it is impossible to separate the economic consumer from the retail one, the fact remains that consumers today is more worried about the perception of having less than they actually have or being cautious about saving for a rainy day.
So it is up to the various industries to focus more on consumers than competition – Ask “What does our consumer want, where and why? By observing this psyche extremely closely & providing solution, that may just enable them to break even in the short term but prove extremely profitable in the long run.