January 8, 2009


I was quite young when the Harshad Mehta scam hit the headlines and the stock markets crashed. Since I was never fascinated by gambling money in stocks and was busy chasing my own dreams, I did not pay much attention to the hysterical front page stories that used to come out in newspapers! But yes, I was concerned about the direction of India both as an economy and a society. The abysmal GDP growth rates reported in those days used to make me think about the future of entrepreneurs in India. India’s pathetic education, health and infrastructure scenario used to make my blood boil in anger and frustration. I sometimes thought India doesn’t have a future.

I still get angry at the state of India. But now I am convinced that India has indeed a great future – particularly at a time when we seem to be getting bad news from everywhere. For a while, I was flabbergasted when some colleagues informed me about the downfall of Satyam and Ramalinga Raju. But then I thought for a while and realized that this was actually not surprising. Regular readers might recall an editorial I had written on how the many so called icons of Indian business were basically creating paper wealth without doing anything that can be called world class. I had talked about how the SEZ formula was tailor-made to create Indian tycoons with government help in a shameless and scandalous manner. So, I was not surprised at the decline and fall of Satyam because I always suspected that companies of that kind did the lowest possible kind of work when it comes to value addition and innovation. It is just that a friendly media and greedy investment advisors ensured such companies became talked about in the West. Now that the so called disciplined markets of the West have been shown to be worse than trick joints, I am again not surprised how ‘investment advisors’ had managed to create a myth around Satyam in Wall Street! I know, the same set of journalists and experts who were saying that Satyam is a great company are now trashing it as the worst possible example of corporate governance.

Most times, I read such stories in the media and ignore them because I know a lot of it comes from completely illiterate and intellectually dishonest individuals. But I confess, I am getting worried about the hype the media is generating about the bad times that have hit the Indian economy. It is difficult to find even a whisper of good news in TV channels and newspapers when it comes to the economy. The same media was reporting just a few months ago that India will grow at 9% plus for the next few years and possibly beat China in the next decade. The same media was hailing the Jaguar-Land Rover takeover by Tata Motors; the same media, I believe, was going completely hysterical in January 2008, when the Sensex crossed 21,000. The same media is now saying that the Indian economy and India Inc. are doomed.

I know these are bad times; I know jobs are being lost in many sectors and I read reports that the Indian consumer too has been afflicted by the new American disease of not buying and hoarding money. But then, is it really all that bad? One of my editors pointed out a simple but very significant fact to me the other day. The largest employer in India is the State – including the Central and State governments, the Public Sector companies and various bodies and institutions that the gargantuan bureaucracy has spawned (and that includes the offices of Right to Information commissions!). And these tens of millions of ‘workers’ have got huge hikes and arrears – thanks to the Sixth Pay Commission, their pay hikes are with effect from January 1, 2006. Many judges will now get three times as much as they are getting, and many mid-level armed forces officers have got an almost 100% hike. Not a single one of these workers faces any kind of job insecurity. In that sense, India is indeed different. These tens of millions of middle class Indians have the money to spend and the sense of security that their jobs are there as long as they like it. These are people who will keep buying cars, two wheelers, homes and travel on holidays. The difference is, these consumers will not be the ones to spend money extravagantly the way a young manager in a financial services firm was doing till recently.

What will that result in? GDP growth rates that will be much lower than what everyone was predicting in the heady days. And how much lower will those GDP growth rates be? Even the most pessimistic analysts reckon that the Indian economy will keep growing by at least 6% every year even in the worst of times. Now imagine India from 1947 to 1991. The economy grew mostly at an average ‘Hindu’ growth rate of about 3% every year. Even between 1991, when economic reforms were launched, and 2003, the year when the late Pramod Mahajan decided that India was indeed shining, the GDP growth rate hovered around 5.5% per year. It has been only in the last five years that we have seen growth rates in excess of 8%. And that will now inevitably fall to around 6% since the global economy is facing a crisis of unprecedented proportions.

But do remember, even a 6% growth rate means that the per capita income of India will grow at more than 4% – for most of its history as an independent nation, India’s per capita income has grown usually at about 1%. With per capita income growing at more than 4% a year, more than 200 million Indians can jump out of poverty in the next decade. That is exactly what happened in the last 15 or so years when the percentage of Indians living below the poverty line fell from about 40% to about 25%. One percent of India’s population today means 1.1 crore, or 11 million!

So I am not so worried about the future of the Indian economy. But what I worry – and get angry about – is the manner in which a herd-like media is presenting the whole story. As in cases like Nithari, Arushi and even the dastardly 26/11 attacks, it is too obsessed with sensational news. Ten jobs go from one company and it becomes front page news. But there will be no coverage of a government school in a village where students wait for an absent teacher who never turns up. There will be no coverage of how private hospitals in cities who have taken public land free of cost, are now denying poor patients any access.

My question is: why is the media hyping lost jobs of some fat cats who, because the market was distorted, were probably earning far more than they were actually worth? Why not pressurize the government to create 200 million more jobs by providing education and health care to all citizens? I agree, that is not that glamorous. But then, that is what I have always believed ‘The Great Indian Dream’ is all about!



Uma said...

In bull market all good news...in bear market all bad news...that's the funda lol. After all journalists are biggest SPECULATORS. hehe. So when are u investing? ;)

Uma said...

and if u lose all your money in share market please don't ask for bailout...because bail is out and bhalu is in...hee hee hee

tarun said...

sir i am a present student of iipm. i am really not interested in reading news papers and watching news as all the media houses write or show the negative news ie rapes,murders and thefts they never show or write about positive news which can make people happy.i believe the more we read and watch the news the more we get angry and depressed.so it is better to ignore such type of news and be happy and work hard and not worry about success as it comes by itself

Uma said...

Terrorists won't spare you whether u're watching Star News or Cartoon Network ...Watch what u like, atleast u will die happy ;)

Uma said...

Arindum: wrt " I had talked about how the SEZ formula was tailor-made to create Indian tycoons with government help in a shameless and scandalous manner..."

If you think that is the reason behind the fall of Satyam then we might as well watch out for Tata Motors...Modi has given them heavy tax concessions and state sponsored loans.
I don't think the SEZ policies are behind all this (that's a JOKE!)...Satyam is a case of Accounting Fraud, plain and simple.
More than the failure of Satyam, it's about the failure of regulatory mechanisms such as SEBI, Satyam's Auditors (Price waterhouse coopers), etc.

sakredkow said...

Yikes!!This guy just goes from bad to worse. His aggenda is obviously to set himself up as some kind of English language savvy analyst tackling all and sundry with his superficial and practically useless solutions to the woes of India. The only truth I have thus far gleaned from Mr Chaudhuri is the old adage that rings disturbingly true that " you can fool some of the people some of the time, but not all of the people all of the time"!
Mr C's editorials again tell anyone with anything equating half a brain what we already know! Of course newspapers sensationalise!! How prosaic is it to assume anything else! Would you sell many papers if you talked about the inanity of this mundane dreary existence? As for the state of India's economy, whilst such a subject is the least of my interest, I even read in a boringly mainstream India newspaper at least a month back that the US itself is surprised by the bouyancy of India's economy. I think Mr C and his cronies who hang off his every word need to do some soul searching! Buy an English dictionary, read about the history of the time BEFORE India adopted every conceivable western ideology and technology, read some of the theorists out there and their takes on the flaws of democracies, and then maybe you will begin to see some of the forest from the trees, because right now Mr C has fooled just about everyone who has written a blog here, except this writer. For the real truth, log onto sakredkow.gaia.com, I will give you an alternative view on anything this guy has to say, and further I openly challenge him to a debate on any of the points he's raised in his editorials. We could conduct it in one of his "schools" which do nothing but churn out western clones like Mr Chaudhuri himself, instead of autonomous Indian thinkers!

Uma said...

Check it out! One bloke called skaredcrow finds this blog stupid but doesn't mind using it as a plug to publicize his own blog. And I go over his mobile blog hoping to find some "wake up world" kinda posts and its empty. Not a single post! Don't hate each other people...we Indians are NOT better than any other country, atleast not going by the statistics such as malnutrition. Basically, our pholosophies and gyan cannot feed dying babies...! Keep the superior attutude with you skarecrow! When India become a better place I will know ;D

Uma said...

And one more thing Mr.Crow! Readers of this blog aren't stupid. We have that Indian attribute called 'respect'.
And lack of arrogance ;)

mEEt said...

At last we find truth. This is really a true fact. Really media should act more responsibly to such sensitive issues. They again and again keep injecting those lies into the minds of millions out there, and yes people of India have a perception that, anything that news channel show is truth. Obviously I am not talking about those shows about haunted housed & ghosts. That's the exception. But, what I want to convey here is that, I completely agree with the article and want to say that, "If media understands it role, it can definitely help India to move ahead by educating people in a correct manner". Hope they realize what they are doing. It's making things worse.

SHINU S said...

This is our India.
What is the use of stop reading newspapers & viewing new channels? These are the facts we must accept, as this is really happening. These are not fictional works! We need to know the good & bad happening around us. Then only we can find a solution.

Shinu S.

Abhishek Singh said...

Nice Post. Good Analysis. What we would like to know is what happens 6 months from jow. I am sure not much will happen to Mr Raju. The shareholders woes will be forgotten. Unfortuantely for us it is one shock after the other. A few months Media was gaga over Delhi Blasts and then the Mumbai attacks and now the Satyam Lies. By Feb it will be back to elections and then coalitions and khichri governments. Some jokers will go from U to N to D and then we will have another new 3 letter anocrym who will be as ineffective and corrupt as ever. It does not matter whether we grow at 4 % or 6 %. What we want to know when will we be in a position to ensure that we are able to book our lalus, rajus, sukhrams and jayalalitas. This great country wants accountabilty and justice.

Anonymous said...

Grow Tourism Industry


why is the media hyping lost jobs of some fat cats who, because the market was distorted, were probably earning far more than they were actually worth? Why not pressurize the government to create 200 million more jobs by providing education and health care to all citizens?
Dear Sir
There is one good intiative by the government called EGS employment garuntee Scheme for rularl people of 100 daus of employment when thats is done and effected out properly hope the petty issues of creating more jobs will not come out
I accept ur view Media should project more on Vidharbha and drough hit areas where employment is not happeneing isntead of giving crap news about Satyam

Anonymous said...

Unfortunately when we read newspapers we also cant avoid those full sized ads of IIPMs which on there own are not disclosing the complete truth!! If one counts the no. of branches of IIPMs, it comes to 18. Now with such grand statements as 165 foreign placements, it would make sense to divide 165 by 18 which comes to 9!! Now compare that with claims of next to IIMs!! Next come to placements.. Has Mr. Chaudhuri stated the no. of students the IIPMs take in their 18 centres?? Even if it is 200 it comes to 3600 and with 1200 placements, it leaves 2/3rd unplaced which is a bad record in itself!!


A story about recession.

This Story is about a man who once upon a time was selling "Wada-Pav" by the roadside.

He was illiterate, so he never read newspapers.

He was hard of hearing, so he never listened to the radio.

His eyes were weak, so he never watched television.

But enthusiastically, he sold lots of "Wada-pavs".

He was smart enough to offer some attractive schemes to increase his sales.

His sales and profit went up..

He ordered more a more raw material and buns and use to sale more.

He recruited few more supporting staff to serve more customers.

He started offering home deliveries. Eventually he got himself a bigger and better stove.

As his business was growing, the son, who had recently graduated from College, joined his father.

Then something strange happened.

The son asked, "Dad, aren't you aware of the great recession that is coming our way?"

The father replied, "No, but tell me about it." The son said, "The international situation is terrible.

The domestic situation is even worse. We should be prepared for the coming bad times."

The man thought that since his son had been to college, read the papers, listened to the radio and watched TV.

He ought to know and his advice should not be taken lightly.

So the next day onwards, the father cut down his raw material order and buns, took down the colorful signboard, removed all the special schemes he was offering to the customers and was no longer as enthusiastic.

He reduced his staff strength by giving layoffs.

Very soon, fewer and fewer people bothered to stop at his "Wada-Pav" stand.

And his sales started coming down rapidly, same is the profit.

The father said to his son, "Son, you were right".

"We are in the middle of a recession and crisis. I am glad you warned me ahead of time."

Moral of The Story: It's all in your MIND! And we actually FUEL this recession much more than we think we do!!!!!!!!!! !!

What can we take away from this story??

1. How many times we confuse intelligence with good judgment?

2. Choose your advisors carefully but use your own judgment

3. A person or an organization will survive forever, if they have the 5 Cs-






The tragedy today is that there are many walking encyclopedias that are living failures.

The more practical and appropriate views on this economic recession is:

"This is the time to reunite together for any small or a big organization,

This is the time to motivate and retain people which are the biggest asset,

This is the time to show more commitments to the customers,

This is the time show values of our company to the world,

And this is the time to stand by our Nation".

Jofy koickal

6th Pay Commission said...

6th Pay Commission

By the 6th pay commission a discrimination has been created amongst the
pensioners. 6th pay commission's differential benefits to pensioners from
January 1st 2006 is in contravention of laws laid down by honorable
Supreme Court....

READ MORE >> www.right2info.com

6th Pay Commission said...

6th Pay Commission

By the 6th pay commission a discrimination has been created amongst the
pensioners. 6th pay commission's differential benefits to pensioners from
January 1st 2006 is in contravention of laws laid down by honorable
Supreme Court....

READ MORE >> www.right2info.com

DRJG said...

The media has behaved far worse than Arindam Chaudhuri says, in fact. Recently some stories being followed and the manner in which they were followed could easily show the bias and even lead one to suspect who the masters were that the media, at least the particular channels, were following orders of.

As far as the financial misdoings of some Indian companies go, and the way media have shouted indicating it is a shame of India as a whole, just go back a few years and ask if the same was true of Enron - was the less than ethical deal there shame of the whole nation of US, did any media indicate so, much less harp on the theme? How about terrorists, are they a shame of a whole nation where they are hiding?

It gets worse when one reflects over the coverage of the Taj terror, or at the other extreme about the way a few persons are systematically chosen as targets of ridicule or slight while some others are unreasonably elevated to reverence in media, and the entirely skewed way even interviews go; or the way awards within entertainment industry are almost predictable, with ability or even well proven ability having often little to do with either awards or the awe attached to the names due to entirely another reason.

One can only surmise that the reason is the carrot and the stick (a modified one) dangled from across borders. And so the media must follow diktats, and shout about the "right of the Mumbai people to know what is going on" whereas in truth the terrorists were being given instructions step by step by their masters watching the television tuned to channels of India. That was about life and death and more, question of national security of India, too. About the other end, the coverage and awards of the entertainment industry, today even the so called news is a farce.

Part of the whole focus is to ridicule India, to downplay all positive achievements and all solid basis of good civil structure, while playing up anything negative to flog the nation's morale, much like beating an animal intended for tender meat. Who the intended guests at the party are one can only surmise, it is a wide spectrum. With victim so very rich and savoury as India, there have never been any shortfall of those.

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