Slowdown bothering India?
S Vishnu Sharmaa, INN/Chennai, @Svs03
India has withstood the 2008 recession, but another type of problem seems to be bothering it currently. The economic slowdown is now the talk topic for all.
India was one of the fast growing economies in the recent past. Everyone were talking about how things were moving fast in all sectors and our nation was registering a growth of 7 to 8 percent.
Economic scholars, people from all walks of life used to be seen speaking as to how India would sustain this growth rate and continue to envy well developed nations whose economies are said to be progessing at snail’s pace. But now the slowdown brought by demand that is going down seems to worry everyone.
Incomes of people are not upto expectations now due to various factors, says G. Parthasarathy, a retired professor of economics. And when that is the case, how do you expect one to remove money from their purse and buy something often, he questions.
Why earnings are not upto expectations? There are lot of reasons to it, opines the economics Professor. Companies are quite careful when it comes to giving hikes for they are not confident of making money through sales. The automobile industry is an ideal example in this regard, he says.
Only when our cars sell will our owners make money. To pay us they should have some cash in their hands, says an employee from a well-known automobile company based near Chennai on condition of anonymity. The same situation seems to be bothering the real-estate, retail and various other sectors also.
And the recession seen in 2008 also seems to be responsible to an extent. The uncertainties in seen in the markets then happened to be a lesson teacher of some sort.
Companies have managed to put a cap on their expenses post recession, which was more a matter of caution than a requirement. This has also managed to slow down earnings of employees, says S. Balakrishnan, an employee in a manufacturing firm.
All of this has only motivated people to spend less. Average spending of people was strong before 2008, for their income levels were fine
as their jobs were secure. Secure job gives the confidence to go ahead and spend. This in a way generated demand and also became a source of livelihood earner. Now that confidence seems to be missing.
Why should I spend when I can experience money crunch any moment? Asks Balakrishnan. Uncertainty looks to have become a part of life now, he reminds. Average life cycles of products have become shorter, so are the life cycles of business, these mean even job life cycles will also be uncertain. All is not gone still, there is a ray of hope even now as demand still exists, and, it can grow if right measures are taken.
