SLOWDOWN OF THE INDIAN ECONOMY

CAUSES
Galloping inflation and sky rocketing prices of crude oil and other commodities. One of the most important causes of economic recession is unrestrained capitalism. We are paying our dues for years of overproduction and rampant greed. Another one of the important causes of economic recession is falling demand for goods and services. The demand for the excess production just won't be there, and we have a waste of resources.

Affected Indian Industries

Export Industry IT Industry Real Estate Sector

Effect On IT Industry
Resorted to cost cutting. Less recruitment of new personnel. Delay in payment of salaries. In extreme cases, layoffs have also occurred. e.g. Wipro has laid off 5000 people to save costs.

Effect On IT Industry
Industries have reported single digit revenue growth. e.g. Microsoft, Oracle, and Cisco have reported 2%, 4% and 5% growth respectively. (The Economic Times dated 24-05-2009 to 27-05-2009).

Effect On Real Estate Sector

As a result of hike of interest rates, EMI and tenure of loans has increased which in turn reduces the demand of real estate. The market rates in India are also dropped by 10 to 30% in most of prominent as well as upcoming cities. Young property investors in India are selling off their assets at a loss because they can no longer afford to pay the interest and costs associated with owning multiple properties. ( The Economic Times dated 2-06-2009 to 7-06-2009)

Effect on Export Industry

Exports for October 2008 contracted by 15% on a yearon-year basis. Close to 50% of Indias exports - textiles, garments, gems and jewellery, leather and so on originate from the labourintensive small- and mediumenterprises. A sharp fall in export growth could mean job losses in this sector. ( The Economic Times dated 25-06-2009 to 1-07 2009)