Rainy days are here & now

India’s itinerary for the next 75 days is packed with a curious cocktail of terror, cricket and elections. With Jihadis making their first foray into the cricketing field in Pak, the gentleman’s game will likely be relegated to the pavilion soon. After all, with all the four cricketing nations in the region, India, Pak, Sri Lanka and Bangladesh in bloody turmoil in recent times, talking of cricket sounds downright vulgar. Cricket again seems like an insensitive intruder as the IPL vies with the more important LS polls for the much stretched and stressed police and para-military forces for security. But there’s something else that makes jihadi bombs, cricket balls and Parli polls totally irrelevent: Economic recession. And I am not even talking of such lofty things as fiscal deficits or repo rates. Rather, the gaping hole in my pocket consumes the mind and lets me think of little else!

It is now official. From the mandarins of India’s finance ministry to the American President, there is chilling consensus that the ongoing meltdown is unlikely to abate in the near future. There is also a raging semantic debate over how to name the current crisis. Is this a recession or a depression? Pundits claim that a depression is a long term affair and a recession becomes a depression only if it lasts for thirty six months at the least. But as another economic pundit put it, in the long term we are all dead! And thirty six months is quite long and many of us may not last to see the metamorphosis of the recession into a depression even if it really matters. So how do you and I cope?

Well, we cant! As renowned institutions bite the dust and hog headlines, little is said about the anguish of individuals or small businesses. It is the sinking of the Titanic that counts: not the drowning of the Toms, Dicks and Harrys who sailed in it only to become mere statistics. Unless the sensuous Kate Winslett too had perished in which case the tears would have sunk several Titanics. But let’s forget sinking ships and starlets. Is your own head above water? If it is, then you must surely be a Government employee or a PSU staff. Or at least be working in one of those few blue chips that has ‘till date’ weathered the storm. Or may be you are a lawyer or a doctor whose fortunes usually swell only when others’ head southwards. And how can I skip the political class who are immune to economic vagaries? The rest of India’s citizenry are in dire straits! And their cries barely register!

So those of the above ‘elite’ need read no further and can push off to the nearest spa. The rest, who most likely might have lost their jobs or at the least, suffered a pay cut, which is often a precursor to the former, can stay tuned for some invaluable pearls of wisdom. Free of charge for sure, for I know there is a glut and in any case we are all partners in penury. And that is one positive spin off: recession is a great leveller and egalitarian socialism has come up trumps. Only that instead of the lows getting filled, the highs have been razed. The middle class particularly finds that famous Poverty Line nudging at their soles. Yes, the honeymoon of copious cash and conspicuous consumption is over and we are back to the familiar family grind: rice, kapada and makkan! Consider yourself blessed if you have these for the next three months. Beyond that is another yuga!

Saving for a rainy day is time tested wisdom. But with the rainy days well and truly upon us, there’s hardly a nickel in our kitty. In hindsight, much of our woes is owed to a shift in the traditional economic philosophy: The sudden jump from savings to spending. So much so that most of us have already burnt much of our future incomes too! You own hardly a few inches of that 42’’ flat TV. All those unsolicited sweet voices that entreated you into loans you could not afford and made you buy things you did not need, are themselves out of work, but you are stuck. Retail credit, the sugar coated poison that we gobbled in glee and greed, has turned out to be the surest killer of middle class India. Plastic money has lured us into a highly elastic lifestyle that has been stretched beyond all bounds. Urban indebtedness is now as rife as rural. Only that one can hardly sympathise with the former. And with incomes dipping or vanishing, the debt trap is clamping down fast. That sweet voice actually told me I was very lucky and privileged to land a pre-approved loan! Really?

Governmental measures have been too meagre for comfort. In any case, it is not the business of the G to be bailing out avaricious individuals. Still, the interest rate cuts and sundry other steps are being targetted precisely at this segment. But with much of financial activity in the economy happening outside the official monetary system, such ‘reliefs’ hardly have an impact. The kandhu vatti and meter vatti rates are what matter and they remain in stratosphere. Again, when one is hardpressed to pay even the present EMI (should we call it Easiest Mode to Insolvency?), there is no way ‘x’ minus a small percentage is going to be affordable. The RBI and banks wax eloquent about reworking the payment schedules of small borrowers, individual and business. This again is a bureaucratic mirage, mired in regulatory maze. Beyond saving the banker’s own skin, such measures rarely rise up to the borrowers’ benefit. For, if a borrower pays on time, he is not entitled to a rephasement owing to his ‘good track record’. He has to perforce skip instalments to first gain the grim attention of the banker. He loses all self-respect and instead adds much stigma to himself. And when the bank finally relents, if only in fits and starts, it is invariably too late. Default? Not my fault!

Small wonder some unexpected scenes are being witnessed. High profile lenders imitate vegetable vendors to haggle with housewives and harassed husbands for some settlement. VIPs have become scarce as the downturn has devalued their ‘important’ status. A startling moral immunity to skipping financial commitments is on the rise. The line between wilful default and genuine business failure has blurred. By all counts, Middle India is in a mess. But the fate of two classes have not changed. The rich remain rich, waiting to grab assets as they come cheap and then grow richer when things look up. And the poor have not got any poorer, but that is because no banker ever issued them credit cards.

Braving terrorists to watch cricket or to cast a vote looks easy as the people have got used to it. But venturing out unseen by a lingering creditor or a lurking collection agent seems a far bigger ordeal for most! q

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Jawahar T R