15 Reason Behind Recession In India


Everything is not going well in the Indian economy along with some other economies of the world. The decline is seen on most of the parameters of the economy. Big initiatives are needed to avoid further deterioration. In time, the pace of development in the economy has to be emphasized.

If the rain has stopped, you leave the house, some go away. On the way you get a 500 note. You pick it up and put it in a pocket of trousers, thinking that you will donate to local charitable work. But just as you are crossing the bookstore, fall into greed and buy a fresh bestseller book of 500 rupees. The bookseller is an alcoholic, he uses the money to buy that day’s liquor. The liquor vendor arrives at the local cinema hall with the same 500 note, buying a ticket for his favorite actress’ new film. Also buys arbitrary priced popcorn and soft dinks. The cinema hall owner has to go away to attend a wedding, he uses the same 500 rupees to pay the taxi driver as his own driver has gone on vacation. You see, how the initial mobility of 500 rupees benefited everyone. Four times the initial 500 rupees was spent, creating economic activity of Rs 2,000. This means, the first contribution of Rs 500 added Rs 2, 000 to the gross domestic product (GDP). If you had deposited the same 500 rupees in the bank or not. If kept in your pocket, this economic activity is the overall

Traditionally GDP is the measure or measure of the production of overall goods and services within a country. As John Lanchester writes in his book Howtuspeak Money, GDP is not as much a size as can be seen as a measure. . . It measures the movement of money through and around the economy; It measures activity. The example shared above, (inspired by the example of the Lanchester book), shows exactly how an economic activity contributes to GDP. This is the activity that has been slowing down since early 2019. This year GDP growth slowed down from January to March 5. 8 percent.

New investments are very important for GDP in any economy, because they create new employment opportunities, which increases earnings and expenses. Increased investment leads to economic growth. Things are not looking right on the investment

1: domestic car sales plummeted

Compare April to June 2019 and April to June 2018 23.3 percent has declinedof car sale. This is the biggest decline since 2004. If the sales of the car decrease, it has a negative effect from tire manufacturers to steel and steering manufacturers etc. Externally, many auto dealerships are closing or shrinking. Vehicle loan growth also reduced to five-year minimum level 5. Has reached 1 percent.

2: two-wheeler sales down

Two-wheeler sales have also been affected. 11. Two-wheeler sales between April and June 2019, 11.7 percentage has decreased. This is the biggest decline since October-December 2008. Mopeds are also not selling.There has been a decrease of 19.9 percent in their sales.

3: Reduced tractor sales

Tractor sales are a good indicator of rural demand. Tractor sales during April to June 2019 decreased by 14.1 percent. This decline is the highest in the last four years.

4: Purchase of frozen housing

As of March 2019, according to real estate research company LFK top 30 cities in india there were 12.8 lakh unsold accommodations. This number is seven percent higher than in March 2018, when there were 1.2 million unsold houses. This means ,People are not buying at the speed at which builders are building houses. There are around 250 small – scale industries associated with the real estate sector. The sale of houses benefits the industry on a large scale, but it is not happening now.

5: bank retail loan

Here goes against datatend. Retail loans given by banks between April and June 2019

There has been an increase of 16.6 percent. During the same time last year there was an increase of 17.9 percent. There is a slight decline in the growth rate here. About half of the retail loan is from home loan and in home loan there is an increase of 18.9 percent. During the same time last year there was an increase of 15.8 percent.
Now how to understand that home loans are also increasing and the number of unsold houses is also increasing? This is probably because people are buying houses from people who bought more houses between 2003 and 2012. People are not buying directly from the builder. This buying and selling of new houses is not happening, so it will not cause the same economic activity as the sale of new houses.
In addition to home loans, credit card dues are also an increase of 27.6 percent. This situation is better than last time. The point here is to understand that when you tell someone that there is a recession, he answers, malls and restaurants are full. One particular category uses credit cards, and even small purchases of this category have not decreased.

6: sale of everyday goods

Everyday goods and food products grocery store

FMCG (Fast Moving Consumer)
Goods) means everyday consumption
Sales of goods have slowed. If we are Hindustan Unilever Limited’s products
If we look at sales, between April and June 2019 – sales growth has been five percent, while in this period last year sales growth was 12 percent. If we look at the growth rate of Dabur India, then it has come down to six percent from 21 percent last year. It is a matter of concern that people have slowed down everyday shopping.

7: Import of oil, gold, silver

Demand for oil, gold, silver is also a good indicator that people are buying imported goods. April to June 2019 during these imports has been a decrease of 6.3 percent, while in the same period last year it has decreased by 6. A 3 percent gain was seen.

8: domestic commercial vehicle sales

Domestic commercial vehicle sales (Am increases, so infrastructure and
There is an advantage on the industrial front. In
Vehicles are used to transport manufactured or semi-manufactured goods. Sales of these vehicles during April to June 2019, 9.5 percent has fallen. This is the highest resolution in the last five years. This shows that everything is not going well on the investment front. Sales at the same time last year was an increase of 51.6 percent.

9: bank loans to industries

It has improved in recent times. April to June 2019, Has increased by 6.5percent, while
at the same time last year there was an increase of 0.9percent. There is a higher share of debt of big industries, in which an increase of 7.6 percent. Credit growth rate for medium and small scale industries is only 0.6 percent. Lending to large industries important, but even when medium and small scale industries grow, they generate employment on a large scale.

10: railway freight revenue

Most of the goods by Indian Railways
A certain amount of HUT products are involved in transportation in large quantities, such as
Coal, cast iron, cement, fertilizer, petroleum, iron ore, etc. When the railways transport these goods more, it is a good sign of investment and industrial activity. 2 in this indicator between April and June 2019,there has been an increase of 2.7percent, this is the lowest level of last two and a half years.

11: Finished Steel Consumption

Steel is required in any type of physical structure. Hence, investment in steel consumption increases
Indicates an increase in activity. Consumption of finished steel between April and June 2019, 6.6 percent increase, while last year 8.8 percent increase. This is the lowest decline in last two years at this front.

12: Announcement of new investment

Announced during April to June 2019
in value of new projects is a decline of 79.5 percent. This september the highest decline since 2004. ‘Investments declared in the same quarter are worth 71, 337 crores, also after September 2004 is the minimum. This is a big indication that industries are not yet confident in India’s economic future.

13: Completion of investment projects

The same quarter saw a 48 percent decrease in the completion of new investment projects. This also
The biggest decrease is after September 2004. The projects completed during this quarter are valued at Rs 69,494 crore, also at the lowest level of the last five years.

14: Government expenditure

Government expenditure in the last two fiscal years 19.1 percent and 13. 2 percent
has increased. This Edge Financials
Highest since the crisis years 2008 – 2009 and 2009 – 2010. This increase in government expenditure is boosting economic growth to an extent. Now to accelerate further development, the government will have to increase its expenditure and for this, tax development is necessary. During April to June 2019, in the total tax revenue of the central government there has been an increase only 1.4 % or four lakh crore rupees.The total tax revenue during the same period last year there was a jump of 22.1 percent.

15: Stagnant exports

46 billion exports in this quarter also
Remains on the dollar. Export same situation of exports this quarter of last year
I was also Currently, there is no growth of economic activity on the export front.
It is clear, almost all the indicators suggest that everything is not going well in our economy – the situation will worsen further. Government
Talking about, then when you are not even accepting this problem, then how will we find a solution?

One thought on “15 Reason Behind Recession In India”

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