Is the Current Economic Crisis Real? My Friend Argues It’s Not

The week gone by was full of depressing reports — as WhatsApp forwards, in newspapers, in television discussions and all over social media — on why the slowing economy is a huge headache for a developing country like ours. What added to the gloom was the August sales figures of leading automobile companies released on 1 September.Maruti Suzuki, of all companies, witnessed a drop in sales by a whopping 34 percent in August and other companies reported equally depressing numbers. Is our economy worse even than the 5 percent GDP growth number suggests?Just to get a different perspective, I called up one of my most optimistic friends, who happens to be a shudh desi Economist.“What slowdown, my dear? You guys are using old yardsticks to measure the level of economic activities in New India. Come on, shed your prejudices, look around and you will see a thriving economy which the 5 percent GDP growth figure has failed to capture,” responded my friend, when asked about the gloom all around.For the sake of my friendship, please let my friend remain anonymous in this article.Completely taken aback by his response, I rattled off several lead indicators — flat rural wage growth, faltering underwear sales (former US Fed chairman Alan Greenspan used to carefully look at this data to gauge the health of economy and is credited to have come out with the concept of underwear index), collapsing farm gate prices of agri produce, slowing demand for basic biscuits, and depressing auto sales, among others — to pin him on the backfoot.He stayed calm all through and gave me a patient hearing.Dear PM Modi, India's Economy Needs Strong Policies, Not Headlines‘Sanskaris Prefer Langot to Western Underwear’“I expected better response from you. You idiots (being a dear friend, I graciously grant him the right to say so) are stuck on underwear. Underwear went out of fashion long ago. Desi langot (loincloth) is preferred underwear for sanskaris as opposed to Khan Market types. Do you expect Kawadiyas, sakha visiting volunteers and self-styled members of various protection groups to wear firangi underwear and not desi langots?“Since you all are blind to new changes happening all around, you cannot spot the shift in consumer behaviour. Unfortunately, GDP estimates too ignore these changes. Only a recent SBI report, which argues that talks of economic slowdown are exaggerated, has managed to spot a shift in consumer behaviour resulting in muted sales growth in the FMCG sector,” my friend passionately argued.‘Growing Religiosity Behind Changing Consumption Pattern’The friend was not done with his arguments just yet. He drew my attention to the Hindu religious calendar to suggest a definitive shift in people’s consumption behaviour for days which sarkari (government) data collection process fails to capture.“We celebrated Navratris twice a year. There is a long list of what not to do during this period. As a result, there is some disruption in conventional consumption pattern. Since Navratras have become very popular now, consumption disruption becomes quite widespread. You are aware of Pitrapksha when Hindus pay obeisance to their forefathers. All luxuries are shunned, and major purchases are postponed during this period. The Kawad month is yet another period when austerity is preferred over ostentatious consumption. All these changes will have impact on GDP growth which you guys fail to comprehend,” the friend further elaborated.‘A Disaster’: Twitter Reacts After GDP Crashes to Near 7-Year LowI was not ready to buy his arguments just yet. Despite his elaborate explanations, I was still wondering about the consistent fall in private investment and consumption.I still don’t know why auto sales have fallen off the cliff. Have people started using bullock carts instead? Or since traffic rules have become so strict, people prefer public transport over their own vehicles? My friend’s sanskari explanation did not address these issues and many more.‘Cometh the Sanskari New Order’The sad reality, I countered my friend again, is that people are being laid off. I may be on the line and so are you. Since most of the sectors are going through contraction, you and I do not stand any chance to find another job soon, I added.“You are wrong again. We are going through a phase of recalibration and not contraction. What you consider a good job now will be replaced by some others. This happens all the time. More so when the decrepit old order is smashed to create a new order. I concede that there will be some unintended consequences. But new order promises new opportunities, brace yourself to grab the most of it,” he said rather philosophically, leaving me clueless still.Does my friend’s new order include a switch to langot, sanskari consumption basket and possible shift away from the comfort of your own private vehicle (of course for those who can afford to have their own cars)? What if the views of my friend become the defining one influencing the policy regime? What if the current slowdown becomes a new normal as an influential section is forever in denial mode despite entrenched slowdown?These and many more questions continued to haunt me through the whole of Sunday night despite words of consolation from my friend. I wish I had the foresight to predict the arrival of new langot index and all that it entails.(This is an opinion piece and the views expressed above are the author’s own. You can reach out to him at @Mayankprem. The Quint neither endorses nor is responsible for the same.)Cartoon: How Would Sadhvi Pragya Explain Our Declining Economy?

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Change Your Lens Folks, ‘Langot’ Index Suggests a Thriving Economy

Satire | “You are using old yardsticks to measure the level of economic activities in New India,” said my friend.

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