Do you remember the 2008 financial crisis? It was a result of both stock market crash and occurrence of recession all over the world.
We are now going to understand what recession is, how it is caused and the solutions.
What is recession?
It is the decrease in input (production) and output of the economic activity. It has affected the whole world in different manners in different ways.
Causes of recession –
Layoffs in companies in huge numbers- losing of jobs.
Unemployment at different places.
Hyperinflation of commodities and taxation.
Fall in Real GDP.
Lack of production- manufacturing and self-employment.
What it leads to/Issues related to recession-
Supply-Demand equilibrium becomes unequal.
Inflation rate peaks up/rises up.
CPI and WPI index can also differ in huge numbers.
Poverty and Illiteracy will be at its peak.
Stock shares will fall down easily.
Will India be affected from the upcoming recession in 2023?
India won’ t be able to escape the upcoming recession like it did in 2008 because of layoffs happening in companies at huge numbers and unemployment, poverty are issues which are still prevalent in almost all places. India can become the worst affected country due to recession. There might be deficit of certain commodities and many problems will end up coming over our country.
Solutions-
Neutral tax-cutting to be done.
More creation of jobs and employment.
Implementation should start from ground-level.
Financial literacy and education given to people.
Communities, groups and social centers to be formed.
Conclusion-
Recession is something which is quite relatable to our daily life, and it can come at any point of time. However, we must take precautions and try to prevent our country from going into recession by taking measures at an individual level and national level.
A recession is very bad for publicly traded companies, but it’s the best time for startups. When you have massive layoffs, there’s more competition for available jobs, which means that an entrepreneur can hire freelancers at a lower cost.” ~ Tim Ferriss
Sources –
Written by
Keyas