Editorial – September 2022
While almost all the international financial experts are sure about recession being just round the corner, many of them are also sure about recession not much denting the Indian economy. Why everybody is so sure about the recession ? Why it is hitting most of the world and not India ?
As we all know, since 2020, the whole world was under the attack of deadly virus and the pandemic continued till the end of 2021. During this period, everybody suffered financially, whether you are a businessman, or an employee, or a self employed person, your wealth eroded. The professional activity suffered a lot due to frequent lockdowns and the destruction of supply chain and logistics which followed thereafter. Many small business houses could not sustain this challenging period and had to put down the shutter permanently. Big enterprises somehow managed to remain afloat but they too had to digest the big loss. By the end of 2021 and start of 2022, the business community had come out of this jolt mentally (if not financially) and was looking forward to a bright fortune in 2022. All these expectations were shattered due to sudden erupting of Russia – Ukraine war. Further everybody thought it was a short time affair but prolonging of this war also had a huge negative contribution to the world economy. This is now followed by a deep devaluation of the currencies across the world affecting the transactions all over. All these factors, pandemic as well as the war and their unfortunate fallouts, substantially reduced the purchasing power and ability of the common consumer and the recession seems to be the natural consequence, almost a certainty !
Let us now understand India’s position. It is a consumption and demand driven economy. A big population of 135 crores and the biggest middleclass in the world ensures continuous demand of almost everything. It may fluctuate to some degree because of inflation and price trends but the continuity is well maintained. Further, India’s overseas trade has always been very small in percentage and that is the reason we have been saved the financial crisis of 1998 and also global (actually western) meltdown in 2008. To say so, India is somewhat immune to the tremors of the faults developed in the global economy. This is the reason why India likely to be the least hit country by the recession.
Friends, steel industry would play a big role in saving the country from the recession. Today the focus of Indian economy is infrastructure development. Our industry has a great responsibility to make the steel available at the right time and at the right price so that the infra development process gets a boost. Hope our industry rises to the occasion and India is never required to face the recession !