Defining Recession

A recession is a contraction phase of the business cycle where significant decline in economic activity lasts more than a few months, which is normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Global Prospective
The current economic recession has hardly spared any country on earth. Rich countries like USA, UK, Germany, Australia, Japan, Canada- almost all the rich countries have got badly hurt from the recession. So, there is no reason to be surprised to know that Indian economy is also getting hurt from the global economic recession.

Impact of Recession on Indian Economy

The following graph shows the changing trend over the Years in all the major sectors which contributes the overall development of the Indian Economy

Recession in IT Companies
For India, it is even a bigger problem because India is the land of IT outsourcing and a lot of large western companies outsource their IT services to Indian companies. So, it is obvious that the supply of works for Indian IT companies will suffer in 2009. If the global economic recession continues then Indian companies may really suffer even in 2010
.

Reality Bites!!!!!!
Is the IT saga of India over? Are we seeing the demise of India's IT success story? Has the recession finally burst the IT bubble?

These are questions that lurk in everyone's mind these days. These are important questions due to the visible effects this industry seemed to have for at least a decade

Shock & Awe..

Changes witnessed by Indian IT Companies under Recession

Low or No Appraisals Salary Cuts Layoffs

Less Hiring's
Minimal projects in hand Declining share in global market No Plans for Greenfield projects No diversification or expansion

Level Wise Average Salary Increase over the period of years in Indian IT companies

Layoffs in the Total Workforce of Major IT Companies across various verticals at different locations

Present Scenario

As per a survey of 480 Indian companies over

Where is recession? As per Hewitt survey report Indian companies are increasing salaries at highest rate in Asia

December 2008 and January 2009 conducted by hr consultancy firm Hewitt - despite the economic slowdown, a majority of Indian companies are still hiring employees. Here are some interesting revelations of this survey Average salary hike in India in 2009 will be 8.2% (the highest in the Asia pacific region however first time in six years that India is likely to see single-digit salary increases) Projected salary hike is lower than the increase of 13.3% seen in 2008 The hike higher than china (8%) USA (3.2%) and Japan (2.3%) Sectors expected to see the highest raises are FMCG, durables and telecom. Healthcare is sector that is doing well globally and in India. In 2008, hospitals had awarded the lowest salary increases but have been placed among the top five sectors for 2009.