1. RECESSION
in
IT SECTOR

2. Road map
What is recession?
•
Causes of recession
•
Impact of recession
•
How to come out of recession.
•

3. WHAT IS RECESSION?
In economics, the term recession
describes the reduction of a country's
gross domestic product (GDP) for at
least two quarters.
The usual dictionary definition is quot;a
period of reduced economic activityquot;

4. • In macroeconomics, a recession is a
decline in a country's gross domestic
product (GDP), or negative real
economic growth, for two or more
successive quarters of a year

5. Causes of recessions
• Currency crises
• Energy crisis
• Under-consumption
• Overproduction
• Financial crisis

6. Currency crises
A currency crisis, which is also called a
balance-of-payments crisis, occurs
when the value of a currency
changes quickly, undermining its
ability to serve as a medium of
exchange or a store of value. It is a
type of financial crisis and is often
associated with a real economic crisis

7. Energy crisis
An energy crisis is any great bottleneck (or
price rise) in the supply of energy
resources to an economy. It usually refers
to the shortage of oil and additionally to
electricity or other natural resources. An
energy crisis may be referred to as an oil
crisis, petroleum crisis, energy
shortage, electricity shortage or
electricity crisis

8. Underconsumption
In underconsumption , recessions
and stagnation arise due to
inadequate consumer demand
relative to the amount produced

9. Overproduction
In economics, overproduction
refers to excess of supply over
demand of products being
offered to the market. This leads
to lower prices and / or unsold
goods

10. Financial crisis
The term financial crisis is applied
broadly to a variety of situations in
which some financial institutions or
assets suddenly lose a large part of
their value

11. How to know recession?
Indicators to say a nation is in recession;
- People buying less stuff
•
- Decrease in factory production
- Growing unemployment
•
- An unhealthy stock market
•

12. IMPACT OF RECESSION ON IT
SECTOR
The impact of Recession is
unpredictable. The main effect of
recession is in IT sector and is mainly
related to the job loss and
unemployment

16. How to come out of recession?
It is unhealthy for any nation to be in
Recession;So, Government will take certain
countermeasures to eliminate or reduce the
Effect of recession for turnaround;
Important Point:
Today, it is a market Economy
Producers; Consumers;
Can produce and Can decide to
sell at their buy or not;
prices

17. But, Government does not have direct control
on Producers’ & the Consumers’ behavior;
But, they can influence millions of Producers
& Consumers with Government’s policies;
Government has 2 plans
Monetary
Fiscal
Policies
Policies
(By RBI)
(By Govt.)
Government influences the
RBI manipulates
economy by changing how
the available supply of
it (Government) spends
money in the country
and collects money

18. Fiscal Government influences the economy by changing
Policies how it (Government) spends and collects money
More money
1] Tax cuts for
available for
businesses or
for individuals
Demand
spending
picks
2] More Individuals get
up;
Spending salary and
by Govt. to spend
Market
create jobs money
can
3] Automatic
recover;
fiscal policy; Some income to
unemployed
Unemployment people to spend
Insurance

19. Monetary Government manipulates the available supply
Policies of money in the country
More money
1] Reduce
available for
reserve
bank
Demand
ratio to give loans
picks
up;
2] Lower the Individuals take
interest rates more loan
Market
can
3] Use its own It becomes an
recover;
reserved income to Govt.
money to buy to inject money
Govt. bonds into the market

20. BIBLIOGRAPHY
• www.wikipedia.com
• www.authorstream.com
• www.slideshare.com

21. QUESTION ?

22. THANK YOU