Opinion... India's bust leaves the well-heeled few smarting

That is, it became a telegenic memorable image on our screens that converted an abstraction into a consumable experience. In other words, it became a soap opera.

Jet Airways, India’s premier private airline, first announced an ‘alliance’ with its arch-rival Kingfisher, then laid off 1,900 employees. These young men and women took to the streets and made the front page of all newspapers. Politicians got in on the act, muttering dark threats to the airline, and in 24 hours the employees were re-instated, with Naresh Goyal, the owner of Jet, being “unable to sleep at night upon seeing the employees’ tears”.

Of course, the economic crisis has been felt in more substantial ways too. The stock market has fallen to less than half of what it was at the beginning of the year. Inflation has climbed to double digits and industrial production is showing signs of dropping significantly. And yet, consumer markets, though a little tentative, are surprisingly stable, at least so far, and corporate results continue to be quite satisfactory. The projected growth is down, but still reads a healthy seven per cent. In some ways, India has been protected by two things. It’s still a highly regulated economy, particularly when it comes to the financial sector. There are no sub-prime skeletons in the Indian cupboard, and exotic financial products, though present, are still not significant in scale. Of course, India was routinely harangued by the international community for not opening up its economy enough.

More important, the Indian economy touches a fraction of its population in a real sense and hence both the gains and the losses that accrue from development are restricted to very few people.

The economy is, in some ways, a virtual presence in India. It would be easy to be deceived into believing otherwise, given the prominence given to it by the media, but one must remember that most visible media in India cater to a small, electorally insignificant group.

For most, only a few parts of the economy have a tangible impact on their lives. Prices are the most important concern, followed by jobs. The concern with the latter is only growing now that the private sector is more in evidence. Other indices are largely academic, for they play no discernible role in the lives of the ordinary Indian. Development, though undeniably on the ascendancy, is experienced in a real sense only by few pockets in urban India. For most, it takes the form of new roads in some cities and the mushrooming of malls. The economy is ‘owned’ by a few and used by a few. This section arrogates to itself the right to speak for the country by conflating its own interests with those of the economy.

This is perhaps why consumer markets haven’t really nosedived in spite of so much bad news. As oil and commodity prices drop, so will inflation, and there is a chance that the economy might stabilise sooner rather than later.

Of course, it is incidents like the Jet layoffs that can change this tentatively written script. They make the downturn real and immediate by presenting it as a spectacle. They bring home the idea of the slowdown in terms that are not only comprehensible but emotionally resonant. “If these smartly turned out young men and women working in a glamorous industry can be so summarily dismissed, so can I,” is the message that goes out quite clearly.

So a single striking image may do more damage than the collective dirges sung by experts. This is, in essence, the truth that advertising understands. Now it is the turn of bankers and economists to do the same.



Santosh Desai, CEO, Futurebrands
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