demand slowdown

8/7/2019 demand slowdown

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How to create demand pull notwith standing economic

slowdown

Presented by:

Dheeraj Gupta


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Indias Perspective

Indias growth is based on domestic demand

Exports of worth 200$ bn contribute about

20% to domestic production Agricultural economy

It contributes 17% to the G.D.P ofIndia

Diversity of culture

Large population


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How the slowdown affected the

demand Unemployment : The growth of employment is

slowing and unemployment is rising, due to that thereis a shortage of demand of goods and services.

Inflation : Inflation is increased due to thiseconomic slowdown, which also paying an impact onthe demand on goods and services.

Oil price : Due to this slowdown oil prices areincreased, which is alone a large factor of this demandslowdown.


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How can we pull the demand in

slowdown The two most feasible way to boost the

demand are : Increase in consumer spending:

(for example: through tax and monitory policy)

Increase in government spending:

(for example: through RBI, state or local level

spending)Central government has already announced $4 bn

for infrastructure development publically


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Demand pull cont.

Six major heads of govt. spending: Rs 25,000 cr. on Farm Loans Waiver has

offset the dampening effect on ruralconsumption by cushioning agriculturalincomes with waivers amounting to Rs 72,000cr.

Rs 38,863 cr. on Fertiliser Subsidies hasprotected farm incomes; the huge fuelsubsidies, which are protecting urban, rural

and middle class incomes and consumption


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Demand pull cont.

Rs 1,274,474 cr. on the NREGS Has boosted ruralincomes and consumption and is creating demand for

construction materials.

Rs 29,579 cr. on Rural Development Has boostedvillage incomes and fuelled demand for construction

materials

Rs 3,862 cr. on Road Infrastructure Is generating

demand for construction materials

Govt. 6th pay commission is also helpful to increasedemand.


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Demand pull cont.

Government subsidy : this will help in loweringthe price, and which ultimately increase the demand.

The govt. slapped 5% basic custom duty on imports of

pig iron, steel, and semi finished products. Finance govt. has levied a 20% basic custom duty on

crude soybean oil.

Price cutting techniques : The classicresponse to raise the demand is to cut the price for ashort term for e.g.. (Hotels, two wheeler, carmanufacture)


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Demand pull cont.

Job creation:This can help to raise the purchasing power of people,and it will surely effect to demand also. it also solve

the problem of unemployment.

Mass-production:says law states that supply creates its own demand

Supply and two strong forces of the market. It also reduces the cost.


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Demand pull cont.

Some other method to increase thedemand:

Discount on products.

Providing free samples.

Some coupon scheme with products.

Extra warranty of the product.

After sale service. Keep the country away from recession.


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Conclusion

Price cut rather than thePrice cut rather than theproduction cut or staff layoffsproduction cut or staff layoffs

would be better option towould be better option totackle with any demandtackle with any demand

slowdown in this economyslowdown in this economyslowdownslowdown


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demand slowdown

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