December , 2017


It Happens Here :>


As the year 2008 ended it marked the beginning of an unprecedented economic crisis. As time passed by the economic slow down transformed into a full blown economic recession in the developed economies. We in India have largely been insulated from the full ferocity of the economic storm. But this does not mean we cannot be touched or we can weather out this storm without as much as a scratch. I was discussing the present economic crisis with my dad. The reasons were plenty and pretty much speculative as to what actually went wrong and why did it go wrong. But as lengthy as our discussion was this one quote from my dad summed up the enormity of the crisis we were facing “Not even your grandfather would have witnessed a crisis like this.” These words made me alert and observant. Every new day brought old news of layoffs, rising unemployment, pay cuts, declaration of bankruptcy. As I witnessed the horrors of modern day economics unfolding I got thinking how are we students going to survive this storm and even perhaps come out shining?  Like any other problems of life, this problem too had myriad solutions. Some of the more popular ideas have been mentioned in the following paragraphs.

The most common, popular and conservative approach is to pursue further studies. In today’s world obtaining education is practically child’s play for anyone who wishes to study. Wide variety of courses ranging from MS and MBA in the US to M.Tech and MBA in India can be pursued. This approach is quite popular due to the fact that these days when banks are hesitant in giving out loans, the most easily available loans are student loans. In fact loans of up to 15 lakhs borrowed from public sector banks involve no collateral. Also most courses would last duration of 2 years-a time frame even the most pessimistic economists say the recession will end. But then the downside to this approach is how viable is the newly acquired education or skill in the new market. Often economic crises of any magnitude often leads to establishment of new procedures and processes and two years is too short  for any educational course to adapt and restructure itself to the new economic order.

The next approach is for the lucky few who have been able to get themselves placed in a job. The thumb rule that applies to this approach is that a bird in hand is worth two in the bush. A job in times like this is a golden lifeline. It promises the holy grail of financial independence from our parents. It gives us an opportunity to fund future ventures wherever our goals lead us. But then one of the underlining problems during an economic slowdown or recession is high levels of job insecurity. Every single day is a fight to hold onto these jobs, meet tough performance targets and perhaps even work on meager salaries. If we are unfortunate to lose our jobs it would quite often translate into a loss of precious time and effort along with a renewed struggle to find a new job in a struggling world economy. But survive in your job and it will undoubtedly give valuable experiences and recognition.

The final approach is perhaps the most risky. It normally entails a great deal of planning, foresight and ingenuity. During recession these qualities will be tested even more often than necessary. Many would in fact advise you against it. But then to the brave always go the spoils of war. This approach is that of entrepreneurship. An entrepreneur often guarantees himself and others of continued employment. Proper analysis of the venture and careful execution is often a necessity. However an entrepreneur should be careful not to succumb to his greed. A conservative approach is often preferred. Drawback to this approach is that capital to start a venture will be difficult to come by due to limited liquidity (unavailability of physical cash) and low investor sentiment. Most entrepreneurs will be required to dig into their personal savings-a risky proposition in a recession. However once the economy gets back on track the venture will most probably yield the richest dividends from among the three approaches.

Each approach is unique and suits each individually uniquely. What works for your friend may not work for you. The key lies in playing by your strengths and reinforcing your weaknesses. A detailed SWOT analysis before taking an approaching will be required Times like these require a perfect blend of prudence, bravery and ingenuity. Acts of bravado or a passive approach due to cowardice will only lead us to a dead end. The only option then will be to sit idle at home and hope that boredom does not kill us. Testing times like these serve twin objectives of strengthening us and teaching us to evolve for the better. Remember the golden words of Robert H. Schuller “Tough times never last but tough people do”.

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