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Transcript of recession and indian impact
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RECESSION
& STIMULUSPACKAGES
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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
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AGENDA
Recession
US Recession
India & US Crisis
Stimulus Packages given by Government of IndiaStimulus Package 1
Stimulus Package 2
Stimulus Package 3
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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 .
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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.
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US RECESSION
Following are main causes of US recession are
as follows.
Housing Crash Credit Crunch
Rising Debt levels
Rising Cost Push
Factors
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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
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Corrective Steps to CheckRecession
Opportunities in India due to US
recession
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STIMULUS PACKAGES
Stimulus Package 1
Stimulus Package 2
Stimulus Package 3
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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.
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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
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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.
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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.
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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.
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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
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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.
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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.