The Influence of Recession on the Indian Economy
Mukesh Ambani, the chairman and founder of Reliance Industries Limited (RIL), is one of the richest people in India. He is widely considered to be one of the most successful entrepreneurs in the country. Due to his strong vision, sound business experience and money, RIL has become one of the most powerful companies in the world.
In fact, according to Forbes Magazine, Mukesh Ambani is the ninth richest person in the world with a net worth of $19 billion. This fortune that he has obtained through the success of his business endeavors is second only to Bill Gates. This statement is made in spite of the fact that Gates was born and raised in the US and is not from the Indian subcontinent.
According to a financial research report, the profits earned by RIL are around $70 billion a year, which includes the oil sector, the real estate sector, financial market ventures, etc. This financial fortune is one of the reasons why many people consider him as one of the richest men in the world.
RIL also has the fastest growing organizations in the world. This means that their operations and profits are increasing at an alarming rate. If you look at the companies that are facing problems because of the recession in the global economy, you will see that most of them are based in the US and Europe. So, there is a large possibility that India might face the same situation in the future as well.
For instance, it is not surprising that the periodical profits of Larsen & Toubro have reduced due to the low profitability of its office buildings in Mumbai and Kurla Devlakonda in India. Also, due to the dependence on the non-performing assets of the companies listed in the ITC, the market price of the shares has also fallen. Since RIL holds major shareholdings in all the listed companies in the United States, you can expect an increasing rate of reduction in prices and profits.
The implications of the recession on India’s economy will not be limited to the countries in the Western world. The resources and natural resources of the country are on the verge of depletion. There is a severe shortage of minerals and raw materials for the manufacturing of different goods, including that of steel.
This is not the first time that the effects of the recession have hit the Indian economy. When the country entered the World Trade Organization, it was reeling under a serious problem because of the falling prices of its exports. At that time, the market price of its products were so low that no company could afford to buy them.
Thus, the companies had to lay off their workers and shutdown their steel plants. Also, the huge debts that were incurred by companies during the construction of the roads and other infrastructure projects were also considered as an unsecured liability. This has led to the need for the government to step in and bail the companies out, so that they can get financial assistance from the federal government.
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