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Old 1st December 2020, 10:12   #16
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Default Re: India is now officially in recession

When the numbers are officially informing us about recession, I guess the practical ground reality is harsh. As everyone has mentioned, it needs more than government inputs of cash inflow. But then, government should let more money in hands of consumers. This would generate demand which is must for growth. Subdued demand should have sent government into a frenzy for immediate corrective actions. Lowering taxes should be a priority in my view, this would make it more affordable for more number of consumers to access wider range of goods/services. Government might make up for the lower taxes with higher consumption. Traveling has come down, work for home is here to stay for long. Employers save a lot and employees also end up saving time which they can spend with family. Parking, fuel, travel time, all can are addressed reasonably with work from home. Commercial real estate doesn't seem to be a smart investment for quite a while. Till people get more money on hand, we cannot exactly overcome tough economic scenario for long.
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Old 1st December 2020, 10:18   #17
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Originally Posted by SmartCat View Post
I wonder if there is a connection between this:


and this:

https://www.team-bhp.com/forum/stree...int-india.html (Cars stolen at gunpoint in India)

It would be interesting to see nation-wide 2020 crime data, especially armed robbery, violent & petty crimes.
Absolutely. A friend of mine told me in August that she got down from an auto to purchase something from vendors. The autowala took off with her grocery bags. This is unheard of in Mumbai!

Never have I heard such a sad story where a guy, who earns his income with hard work is tempted to resort to illegal means to make ends meet!

Last edited by Chetan_Rao : 1st December 2020 at 12:27. Reason: Typo
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Old 1st December 2020, 11:38   #18
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Default Re: India is now officially in recession

In Bombay, I see people back on the roads and restaurants. The key question is are they spending as much as they used to pre Covid.
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Old 1st December 2020, 11:52   #19
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Ours is an economy dependent on consumer spending. Atleast those with stable jobs (which should be a large % on this forum I assume) should be a bit more liberal.
I too thought on similar lines until I saw the figures which is like almost 90% of our workforce is in informal sector, which loosely translates to non stable jobs. It is this section of people who needs the maximum amount of help.

I agree that the other section should be more liberal in spending in these times.
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Old 1st December 2020, 12:30   #20
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Default Re: India is now officially in recession

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I too thought on similar lines until I saw the figures which is like almost 90% of our workforce is in informal sector, which loosely translates to non stable jobs. It is this section of people who needs the maximum amount of help. I agree that the other section should be more liberal in spending in these times.
Apart from informal sector and out of the other sector many are employed in with Private firms. The job security in these times is tough, and here is where Government should have stepped in. With rainy days on horizon and when an individual employed in private sector is staring at potential job loss, the spending will certainly by curtailed. Small business are already under huge stress. Hence there is overall impact on demand. Demand stimulus in forms of delayed loan payment isnt' going to help IMO. 50% are employed in agriculture sector where revenue growth percentage haven't kept up with lets' say scale of growth in government jobs. A huge section needs help, and absolutely no steps are being taken. If informal sector accounts for 90% of workforce, for the rest (apart from government employees) of working class some concrete steps must be taken. Doubt if our government would do anything.
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Old 1st December 2020, 13:48   #21
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Default Re: India is now officially in recession

Just thought of sharing a few personal experiences of how badly affected the informal sector is:

Our current driver used to earn 22k prior to the lockdown (now gets paid 18k) being responsible for charting out routes for cabs to various software companies. The abrupt lockdown and sudden shift to WFH has meant his job is gone for good. The cab company he earlier worked for had hopes employees may be called back by December, but extension of WFH until June 2021 by most companies meant they had to wind up.

An old driver who last worked for us in 2012 reached out to us for some financial help recently. He had found a job at a school as a driver and was very happy until last year as he was able to earn close to 35k after working at the school until 5pm and later as a part-time household driver until 9 pm. However, since April this year the school management has simply refused to pay him and he also lost his part-time job. He's now taking up odd jobs and struggling to make ends meet after his income plummeted to zero in a matter of a few weeks.

Its a similar story (though not as brutal) for a few of my clients who are in commercial real estate, event management and hospitality sector. These sectors won't recover before 2022, even if a vaccine is made available tomorrow as the changes seem permanent.

The worst part is there is no help insight for those affected and they will find the next 1-2 years very challenging.

Last edited by shashank.nk : 1st December 2020 at 13:51.
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Old 1st December 2020, 15:13   #22
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Default Re: India is now officially in recession

So true. Yesterday, I'd been to buy spectacles from an all India chain and they have received a 70% salary cut for months now (Post lockdown). Staff were literally crying. They're from Kerala and have crossed the border, this side, for better opportunities. But it's not worked out. The situation has hit every sector, without exception, and those who say 'look at our overflowing malls and markets' are misinformed
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The abrupt lockdown and sudden shift to WFH has meant his job is gone for good. The cab company he earlier worked for had hopes employees may be called back by December, but extension of WFH until June 2021 by most companies meant they had to wind up.
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Old 1st December 2020, 16:34   #23
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IMHO the next 2-3 years are crucial, what is also going to change is the geopolitical landscape & thus the global trade as well.

With the formation of Quad & China's increased aggression, we are looking at a world much different from we used to live in.
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Old 1st December 2020, 17:03   #24
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Here is a good interview with Dr Sen, one of the best economists in India. He explains many aspects of the economic downturn. It gets a bit technical sometimes but it is quite informative. As per him the economy needs a real stimulus right now because the consumption numbers won't pickup otherwise. Also, the recent upticks in some indices are the result of some pent up demand, and not a genuine recovery. More pain to come. He also talks about the potential bad loan crisis driven by bankruptcies, mudra loans and retail loans for customers who are now out of work.

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Old 1st December 2020, 17:21   #25
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I'm not a student of economics. Working in tech- the currently 'stable' line of work. You can grab views from a layman's perspective here-

1) I am simply not willing to spend even if I can. I can lose my job anytime and I should be prepared for it. The service industry can only run if our clients have business and hire us. Period.
2) The govt simply doesn't acknowledge any failure. I know things are bad but not the depths of it. As a conservative Indian, let me save more.
3) I went to a mall recently and I saw people only buying essentials- headphones, laptops, smartphones etc which is actually required in the new world. There's a lot of crowd but no one seems to be buying anything. Just strolling around for a change.
4) Stock markets and the rest of the world seems to be poles apart. I wanna invest more here (MF) but looks like it's a big bubble waiting to burst.
5) Farmers are protesting and they're leaving no stone unturned. Something is seriously wrong whatever it may be.

Do I see an end to it? Nope. We can't fix a problem without acknowledging it in the first place.
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Old 1st December 2020, 17:38   #26
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4) Stock markets and the rest of the world seems to be poles apart. I wanna invest more here (MF) but looks like it's a big bubble waiting to burst.
This is the same question in my mind as well. I was thinking that with the quarterly results, we could see prolonged slump, but Stock has crossed Pre-March Highs. Recession and All-time-high do not seem to add up
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Old 1st December 2020, 17:51   #27
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Default Re: India is now officially in recession

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Originally Posted by Turbohead View Post
1) I am simply not willing to spend even if I can. I can lose my job anytime and I should be prepared for it. The service industry can only run if our clients have business and hire us. Period.
2) The govt simply doesn't acknowledge any failure. I know things are bad but not the depths of it. As a conservative Indian, let me save more.
4) Stock markets and the rest of the world seems to be poles apart. I wanna invest more here (MF) but looks like it's a big bubble waiting to burst.
5) Farmers are protesting and they're leaving no stone unturned. Something is seriously wrong whatever it may be.
Shhh! The magic is in petting peacocks.

Last edited by V.Narayan : 1st December 2020 at 18:14.
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Old 1st December 2020, 18:22   #28
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The economy was already in the doldrums even before the pandemic and that’s well known but hardly admitted. The contraction of the core sectors is even more worrisome although some sectors are showing sights of turn around. And I repeat, the farce of demonetisation is what started it all. The pandemic was just used as an excuse.

The informal sector is gone for good and we all know about the state of joblessness in the country. The income inequality is rising and the poor are left to fend for themselves with no support at all. We as a nation have lost the sight of inequality when every thing is seen from the prism of nationalism and religion.

Someone talked about the stock markets, it is on another tangent totally. People would be surprised to know that when the whole country and its economy was in the doldrums because of shocks like demonetisation, hasty rollout of GST, surprise lockdown at a notice of four hours so on and so forth, the net worth of two very prominent billionaires rose by 73 percent and 21 percent respectively.

When the time was to actually stimulate the economy and put money into the hands of people, the authorities are on a sucking spree through indirect taxation. People will not spend unless they are sure of their money flow. When little relief through tax cuts could have worked, meaningless whataboutary is being fed.

We, who can, I am sure are doing whatever in their capacity to help our fellow citizens but that’s not enough. Too many people are jobless in this country right now but then perhaps our priorities are not to put food in the plates of the hungry but to rename cities and roads and what not !!

Last edited by ABHI_1512 : 1st December 2020 at 18:50.
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Old 1st December 2020, 19:46   #29
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https://economictimes.indiatimes.com...w/79508008.cms


How does one explain this. If the economy is doing that badly, GST collections should definitely get affected.
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Old 1st December 2020, 19:55   #30
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Originally Posted by Sree View Post
https://economictimes.indiatimes.com...w/79508008.cms


How does one explain this. If the economy is doing that badly, GST collections should definitely get affected.
This is the result of the unlock guidelines after the pandemic and ensuing festive season. Of course, there are signs of recovery but real fight will be to sustain this momentum through early next year.

June, July and August also had collections close to 90k crores, so GST collections were actually hit during April and May only when it was near about 40k and 60k crores. Lockdown had severely impacted earnings and all the hullaballoo about the recovery part is yet to be consistent despite the stimulus packages announced by the authorities !!

Last edited by ABHI_1512 : 1st December 2020 at 20:10.
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