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SEEMA MUSTAFA | 7 JANUARY, 2015

Economy: Rotten to The Core

The economics of disparity


NEW DELHI: I am an economics retard. So generally try to make sense of those endless statistics given out by Finance Ministers and their minions in the media to determine my barometers of well being. So when they say growth is happening, and Sensex is shooting upwards, and a slew of measures are being contemplated by the capable government, and that an economist of ‘repute’ is heading the market friendly version of the old supposedly ‘poor friendly’ Planning Commission, I feel reassured. As my interests are being looked after, and soon I will be shining along with India.

So it came as a huge shock when I read in the morning newspapers----that by the way had just not prepared me for such an eventuality with their ‘all is good’ headlines till date---that the “achhe din pastry” (as the Economic Times put it) has crumbled, and the Sensex that the media was applauding has just melted. I pulled out all the past week newspapers to see if I had gone wrong, but I had not. The headlines were all about prosperity and growth, and falling oil prices , and a booming Sensex.

So what happened? I don’t know. How am I supposed to know? I only know what I read on the economy and now it seems that the bad words like ‘Greek woes’ and ‘margin calls’, all bad stock market jargon, is back on Dalal street. Oh woes! And no one is buying all that talk about India being the biggest beneficiary of the huge crash in global oil prices with overseas portfolio investors pulling out. Our stocks have plunged, and clearly that has shaken the people who benefit from the market, whatever that means in real terms.Of course it is all related to Greece and global factors, or so the reports tell us, but that does not take away in my mind from the Sensex hitting its lowest levels ever in 16 months.

But then while trying to make sense of the economic verbiage, that shifts so dramatically without warning, i was confronted by my cleaning lady lamenting about how tough life has become, how prices are soaring, how vegetables are beyond her reach, how expensive lentils are, and how difficult it is for her to feed her family these days. It has not improved at all, she says, it has worsened. What is all this about acche din, she asks, not for us. I try to tell her it is not good for the stock markets either, but I think I could not communicate something I myself do not understand, and she left looking at me as if I had hit a new low.

Then my driver came in and told me how in the bus everyone was talking about how expensive electricity is. And how difficult it has been for them in this winter. And how prices are going up, and how nothing has changed, except for the worse. I tried to talk to him about ‘Greek woes’ but again clearly he too did not understand what that had to do with his increasingly difficult life.

So I went back to the newspapers to see whether there was something there on what these common people had been telling me. And I found a slightly garbled report that said something about rural wage growth being lowest in ten years, admitted that this signalled farm distress but then insisted that inflation was falling. For the reporter either the readers were very intelligent and could make the connection easily or totally dumb and hence not worth explaining the linkages too. But the report did acknowledge in the only part that I could understand, that there had been a rural wage slow down over the past six to seven months. And that this was directly because of the slowing down of non-farm employment opportunities, rising crop prices and MGNREGA.

The poor are in distress, with the agrarian sector again being hit with the new policies, or the slowing down of the old drivers with no new policies in place. The rural and the urban poor will, as always, be the first to be hit and judging from whispered feedback reaching Delhi the drift away has begun. Communal polarisation can work only up to a point, as the low shelf life of the Babri Masjid issue should have demonstrated to its propagandists, with the people of India looking for a better life in every sense of the word.

Of course these reports will now be followed by ‘intelligent’ briefings from officials, Jaitley and more importantly ‘sources’ and so while the promises remain little more than that for the poor the great intellectual Noam Chomsky can be assured of the last word, “It doesn’t matter how many footnotes they put in, or how many ways they tinker around the edges. The whole enterprise is totally rotten at the core: it has no relation to reality."

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