Germany is going through a recession. Germany is Europe’s largest economy and the fourth largest in the world. Yet, since last two quarters Germany has faced a negative growth rate. UK and US could be next. What is keeping India safe? And what lessons should Indian policymakers learn from Europe’s financial crisis? Explained by Abhi and Niyu in this video.

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What is a recession:

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

In the United States, a recession is officially declared by a committee of the National Bureau of Economic Research (NBER) when the economy meets two of the following three criteria:

Real GDP declines for two consecutive quarters.
The unemployment rate rises by 0.5 percentage points or more from its low point during the previous 12 months.
Industrial production declines by 2.0 percentage points or more from its high point during the previous 12 months.

A video by Abhiraj Rajadhyaksha & Niyati Mavinkurve

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About Us:
Abhi and Niyu is the fastest growing Indian educational YouTube channel. Abhi and Niyu are a husband-wife couple who believe in the power of our youth.

Abhi and Niyu started their page to talk about positive, impactful ideas and to inspire offline action from online content. It was a way to change the way our negative feeds operated and replace negative news with positive, action-oriented news that made some change. They decode and simplify issues for Millenials and believe small steps lead to big outcomes in the future. Their videos span different genres like history, environment, and sustainability, policy discussions, social commentary, economics, personal finance, among others….(read more)

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Why Modi Government Needs to Learn from Europe’s Failures

The Modi government in India has often been applauded for its ambitious economic policies and development initiatives. However, it is important for the government to also learn from the mistakes of other countries, particularly in Europe, to avoid potential pitfalls in the future. One such example is the current recession in Germany, which serves as a valuable case study for Indian policymakers to understand the potential risks and vulnerabilities in their own economic strategies.

Germany’s economic slump offers several important lessons for the Modi government. First and foremost, it highlights the significance of diversification in the economy. Germany’s heavy reliance on exports, especially to China, has proven to be detrimental during times of global economic downturns. As China’s economic growth slows down, it has a direct impact on Germany’s export-oriented industries, resulting in a decline in domestic production and ultimately leading to a recession.

India, too, must focus on diversifying its economic sources to prevent a similar scenario. While building strong trade relations with major economies is important, relying too heavily on a single market can be risky. The Modi government should explore opportunities to expand trade and investment with multiple partners, particularly countries that exhibit stable growth prospects. This would help ensure a more balanced and resilient economy, better equipped to handle external shocks.

Another crucial aspect that the Modi government should consider is the role of innovation and technological advancement in economic growth. Germany has been trying to navigate its way out of the recession by investing in research and development, as well as embracing emerging technologies. This approach has the potential to create new industries and job opportunities, driving economic recovery.

India already boasts a strong pool of human capital, with a competitive advantage in the IT and services sector. However, the government needs to foster an innovative ecosystem that encourages entrepreneurship and supports research and development across various sectors. It should invest in promoting emerging technologies such as artificial intelligence, renewable energy, and biotechnology. By doing so, India can not only enhance its economic growth but also reduce its dependency on traditional sectors and diversify its economy further.

Furthermore, the current recession in Germany emphasizes the importance of fiscal discipline and prudent economic management. Excessive spending and fiscal deficits can leave a country vulnerable to economic downturns. The Modi government should maintain fiscal discipline, ensuring that public spending is targeted towards productive sectors that generate long-term returns.

Additionally, India needs to focus on structural reforms to remove bottlenecks and improve the ease of doing business. Reducing bureaucratic hurdles, simplifying regulations, and improving infrastructure are crucial steps to attract both domestic and foreign investments. By learning from Europe’s challenges, the Modi government can take proactive measures to avoid similar pitfalls and lay a strong foundation for sustainable economic growth.

While the Modi government has made significant strides in promoting economic development, there is always room for improvement. Learning from the experiences of other countries, such as Germany’s current recession, can provide valuable insights and help shape more effective policies for India’s future. By diversifying the economy, investing in innovation, maintaining fiscal discipline, and implementing structural reforms, India can better position itself for sustained and inclusive growth.