The land-slide victory of Democratic Barack Hussein Obama over Republican McCain in the US presidential elections has created enthralling waves not in America but throughout the world. Mr.Barack Obama will assume the office of President of the most powerful democracy in the world under turmoiling environment when the US economy is braving great recession owing to their sub-prime lending which has cuased failure of more than a dozen banks there. The Lehman Brothers bankcruptcy has compelled the US govt. to inject $700 billions to save their crumbling economy. In spite of such a whopping package they have not come out of the recession. This has created a teasing slow down in their economy resulting in retrenchment in many sectors including real estate sector. The sub-prime lending has landed the American economy in such a dilapidated condition.

Opening the Indian economy to globalization liberally has also affected us adversely in the recent times. Indian govt. has allowed the FIIs to invest in our country without much control over them. To garner foreign currency in US Dollars, we have given so many facilities to the FIIs in form of freedom in P-Notes, etc. Now being in financial problems back in their country in the USA, the FIIs have started de-investing in our markets and have started withdrawing the money from our markets. This has given jerks to our economy. For the time being the key authorities at the helm of affairs of our economy have controlled the ill-effects of the recession of US economy. If we succeed in keeping our economy impuned from ill-effects of the global recession it will be a great achievement of our govt. The difficult phase has not yet over. The govt. authorities are to be more vigilant. Let us hope that we will succeed in our venture.

The government is taking the various steps to augment the economy. They have decreased the CRR Ratio, SLR Ratio and Repo Rate. This has increased the liquidity in the financial markets to fight the imminent recession in the market. To lure the FIIs the government has now extended more liberal attitude for P-Notes, etc.

Though Mr Barack Obama has pronounced in his election speeches that outsourcing will be reviewed considering the employment environment in his country in US. There is a fear that if Obama restricts outsourcing it will affect our IT sector adversely. Because our IT Wizards have started diverting their activities in other parts of Europe, it is hoped that we will come over the problems, if any, of outsourcing.  We hope tenets of globalization will prevail upon Mr. Obama and he will continue with the outsourcing though with some checks not blocking  others’ economies.

The slow down in our real estate sector is not because of ill-effects of sub-prime lending of the US but because of excess trading / constuction activities of leading builders and developers in our country. The govt. has imposed some checks over these builders and developers which we hope will give results in due course. The builders and developers have started approaching the govt. authorities to start extending them the loan facilities and also to allow them to raise funds through external borrowings. The release of funds to the builders and developers with government controls over the utilization of these funds will help to improve the slackness in the real estate sector.

Our website viz www.zameen-zaidad.com  is of the opinion that to overcome the imminent recession and job losses, our government should initiate the following immediate steps:-         

·                    To mobilize deposits in the form of Infrastructure Bonds through public sector banks with interest accruals free from tax to attract more and more investors. The Infrastructure Bonds should have maturity for five years and be extendable for another period of five years.

·                    To invest the so-mobilsed funds in giving loans to big business and industrial houses for road construction, electricity generation, railway, airport & metro-networks in such a way that more and more new jobs are created to fight the job losses, if happened on a/c of imminent  economic crisis.

·                    Every effort needs to be made by business & industrial houses to cut costs and raise productivity. Retrenchment of existing staff should not be done with a view to boost profits. Employees on the rolls must be retained.

·                    Our country has one billion consumers. Consumption-led stimulus is the need of the hour.

·                    Excise duty be reduced and income tax be reduced to stimulate demand in the market.  

·                    The FIIs should not be given free hand to off-load their investments in our markets to create panic among other investors.

The above measures will definitely create new jobs, increase liquidity in the market, make use the idle funds lying with the public and earn income in utilizing the funds by extending loans for infrastructural activities. In this way the govt. will be in a good position to control the recession and job-losses to a great extent.