Recession In India In Last 70 Years – Free PDF Download

RECESSION

• Recession refers to phase of the downturn in the economic cycle a when there is a fall in the country’s GDP for some
• It begins after the economy reaches a peak of activity and ends as the economy reaches its trough.
• A common rule of thumb for recessions is two quarters of negative GDP growth.
• ‘A recession is a period of decline in total output, income, employment and trade, usually lasting  six months to a year.’

WHEN HAS INDIA SEEN A RECESSION?

• From 1957 up to the pre-liberalisation period, India witnessed four years of an actual fall in output or negative growth in GDP.
• These were in the years 1957-58, 1965-66, 1972-73 and in 1979-80
• When the economy grew at -1.2%, -3.7%, -0.3% and -5.2%, respectively.

REASON

• These were mainly on account of either- Oil price shocks characterised by high oil prices or
• Drought that led to a sharp fall in agricultural production or both.
• For emerging economies like India,
• Economists say that recession can be categorised as a period of a downturn in the business cycle much below the previous trends and
• Doesn’t necessarily need to be accompanied by negative growth rates.
• Hence, economists contend that India has seen periods of recession in the post- liberalisation period without actually seeing  negative GDP growth rates.
• The first recession was from 1999-Q4 to 2003-Q1;
• The second recession was from 2007-Q2 to 2009-Q3; The third recession ran from 2011-Q2 till 2012-Q4
• The first bout of recession between 1999-2003 was in the aftermath of the Asian financial crisis that prompted the  central bank to increase the repo rates to protect the  This had an adverse impact on growth.
• The second recession was around the time of the global financial crisis of 2008.
• The third recession between 2011 and 2012 was in the aftermath of the rapid rise in the country’s fiscal and  current account deficit and a period of high inflation.

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