recession and indian impact

8/9/2019 recession and indian impact

1/17

RECESSION

& STIMULUSPACKAGES


2/17

Presented By:

112 Shweta Singh

113 Vijay Singh

114 Siddhartha Suryagandha

115 Nida Syed

116 Ijaj Tamboli

117 Dhananjay Tekade

118 Ashish Telang119 Chetan Waghmare

120 Sunil Waghmode

121 Mahesh Wankar


3/17

AGENDA

Recession

US Recession

India & US Crisis

Stimulus Packages given by Government of IndiaStimulus Package 1

Stimulus Package 2

Stimulus Package 3


4/17

WHAT IS RECESSION ?

A Recession is a contraction phase of the business cycle.National Bureau of Economic Research (NBER) is the

official agency in charge of declaring that the economy is in

a state of recession.

They define recession as :

Significant decline in economic activity lasting more than

a few months, which is normally visible in GDP, income,

employment, industrial production, and wholesale-retailsales.

When there is a significant decline in economic activity

over two successive business or economic cycles, the

economy is said to be in a recession .


5/17

ECONOMIC SLOWDOWN

A reduction in economic growth or an actual decline in

economic activity.

ECONOMIC DEPRESSIONThe term economic depression means a sustained

recession in an economy. A depression is serious form of

recession.

Price deflation, financial crisis and bank failures are also

common elements of a depression.


6/17

US RECESSION

Following are main causes of US recession are

as follows.

Housing Crash Credit Crunch

Rising Debt levels

Rising Cost Push

Factors


7/17

INDIA AND TH

E US CRISIS

Impact on India

Anatomy of the economic depression in IndiaShare Market

IT and Real Estate Sector

Layoffs and Unemployment

Industrial sector


8/17

Corrective Steps to CheckRecession

Opportunities in India due to US

recession


9/17

STIMULUS PACKAGES

Stimulus Package 1

Stimulus Package 2

Stimulus Package 3


10/17

STIMULUS PACKAGE 1

Government authorized additional plan expenditure

of Rs.20,000 crores

Across the board cut of 4% on ad valorem

CENVAT(Central Value Added Tax). Interest subvention of 2% on labor intensive sector.

Additional allocation for export incentive scheme

Full refund of service tax paid by exporters to

foreign agents.


11/17

Incentives on loan for housing

MSME sector incentives

Textile sector incentive

IIFCL to raise 10,000 crores through tax free bonds

Import duty on naphtha to be eliminated

Norms by government department on vehicles relaxed


12/17

STIMULUS PACKAGE 2

NEED FOR STIMULUS PACKAGE 2

Manufacturing sector was not performing well.

This was partly based on export outlook.

Real estate,steel,cement,textile,leather,automotive.

components were among the stressed sectors.

Hence, the need for another stimulus package given by the

govt.

Additional plan expenditure up to Rs. 20,000 cr. mainly

for critical rural, infrastructure and social security schemes.


13/17

HIGHLIGHTS OF THE PACKAGE 2

Flow of credit to economy to be checked

Providing line of credit to NBFCs (Non -Banking

Financial Company) through Public sector banks.

Oversee the resolution of credit issues of micro, small andmedium enterprises by banks.

Restore DEPB(Duty Entitlement Pass Book) rates so as

to appreciate the rupee against

the dollar.

EXIM bank to provide pre and post shipment credit to

Indian exporters through line of credit.


14/17

SECTORWISE ANALYSIS

AutomobileAccelerated depreciation for purchase of CVs (Jan

Mar09) 50% Vs 30%.

Arrangement between PSU banks with NBFCs for

CV financing.

One-time assistance to States until June09 .

Buses for Urban Transport System.

TextileReduction in CRR.

Extension of Duty Entitlement Passbook (DEPB).

Enhancement of Duty Drawback

R

ates.


15/17

SECTORWISE ANALYSIS CONTD...

Infrastructure

Eased external commercial borrowing (ECB) norms.

Hiked FII limit from 6 Billion Rupees to 15 Billion

Rupees.

Get 40000 Cr by way to refinance to PSU banks by

IIFCL.

CementCVD(CounterVailing Duty) & Special CVD re-

imposed on imported cement


16/17

SECTORWISE ANALYSIS CONTD...

Infrastructure Contd

Metals

Withdrawal of exemptions from CVD on TMT(Thermo Mechanically Treated)bars and structures.

Withdrawal of full exemption from basic customs

duty on zinc and ferro alloy.


17/17

STIMULUS PACKAGE 3

Service Tax Rates reduction.

Central Excise Rate reduced.

Government announced cut in Excise Duty .

Customs duty exemption on Naphtha .

GOI slashed excise duty on Cement.

recession and indian impact

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