It is not often that extremely simplistic explanations are offered on subjects as complicated as that of an economy that shows serious signs of sluggishness ringing alarm bells across the country. But the Bharatiya Janata Party government in New Delhi appears to be an exception on this front.
No matter how confounding the signs and economic data are, some Ministers appear to believe that all it requires is their belief that Indians are handicapped by a certain degree of naivety and will swallow a possibly very bitter pill that the government might shove down their throats sooner than later. And do so happily because voices in the government have chosen to call the pill a nice little toffee.
It is not just scary that those at the helm of affairs of running the country have decided to choose untenable, unproven and laughable claims to iron out the crumpled notes that the economic policies of the country are belting out as would a violin in disrepair in the hands of a novice wannabe Antonio Vivaldi.
There can be but one explanation for the explanations being trotted out by the likes of Finance Minister Nirmala Sitharaman and Law Minister Ravi Shankar Prasad either offering simplistic answers to complicated problems plaguing the country’s economy or finding evidence of an economy on a roll in movie theatres.
This attitude also raises the disturbing prospect of the BJP government believing that as the nation’s shepherd, it knows where the best grazing is available and the people are, well just sheep willing to follow the shepherd bleating out their protest every now and then but cannot stop from being marched towards a possible economic gloom and doom scenario.
Sitharaman, in September, explained that the piling up of inventories at car manufacturing plants and automobile dealers was on account of “the mindsets of the millennials, who now prefer to have Ola or Uber rather than committing to buying an automobile.” She also blamed the upcoming BS-VI emission norms for the slump.
And last Saturday, Prasad pointed out that three movies – War, Sye Raa, and Joker – pulled in Rs 120 crore just on their opening day on October 2, a national holiday, as evidence of the Indian economy’s good standing. His reasoning was that if the economy was as bad as it is being made out to be, then people would not spend money on entertainment.
Both the Ministers have not offered any empirical evidence to back their claims and ended up sounding like underprepared undergraduate students attempting to put together a term paper in a hurry.
There, however, may be an explanation as to why the three movies cited by Prasad have done well, not just on their opening day but also since then too. Back in the 1930s during the Great Depression in the USA, many films were full of wronged heroes, a sentiment that found great resonance among the suffering population that was overwhelmed by economic forces beyond their control. People flocked to such movies as they felt one with the fictional realism portrayed by the characters in the films.
Indians too have been feeling a sense of being wronged, thanks to the Narendra Modi government’s shock therapy of demonetisation that ultimately went awry. This resulted in a widespread sense of outrage among Indians of being victimised for no fault of their own.
At the same time, as common people suffered silently, they also saw big businessmen loot banks and scoot from the country with impunity with their ill-gotten wealth. And then came the ham-handed implementation of the Goods and Services Tax regime. While demonetisation scythed through the informal and formal business sectors destroying livelihoods, the GST regime did not do the business community any favours either.
Incidentally, Prasad was clearly oversimplifying things citing the success of the three recent movie releases. It was not just War, Sye Raa or Joker — all movies with the principal characters playing wronged heroes. There have been others too that have done very well in the country over the past couple of years, whether they were made here in Bollywood or out there in Hollywood.
Back in 2017, a report on the Indian film industry predicted that it was set to become a Rs 23,800-crore behemoth in 2020 from its Rs 13,800 crore that year. If the current movies are doing well, it could well be because unlike the Indian government that got its economic calculations wrong, the Indian film industry got its numbers, and more importantly, the pulse of the movie-goers right.
Prasad appears to have based the display of economic acumen on part of the Central government on the repeated research findings that expenditure on entertainment is typically a discretionary decision taken by individuals. Since this is discretionary expenditure and unless people have incomes they are willing to spend on an escape into fantasy land, the success of the three October 2 releases proves that the country’s economy is sound. QED — thus it has been demonstrated.
These flyby fantasy explanations offered by top functionaries of the government on the state of the economy can be termed as nothing short of a disservice to the people of the country. Sound bites carefully crafted for television networks, which can then recycle them ad nauseam, can be dangerous in the long-run precisely because of their nature of becoming annoying or tiresome.
(The author is Deputy Editor at Telangana Today and tweets at @BaluPulipaka)