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ShareApropos the global economic meltdown, among the general gloom and doom, I must confess to having gone off the boil in recent weeks.
So much of the whys and wherefores of problem has been delivered in unintelligible jargon, and so bloody-minded are the pessimists that anything which is easily understood and does not foretell the end of the world comes as massive relief.
In that context, an article emailed by my friend Shashi Maudgal came as a harbinger of not just robust good sense and cheer, but how all of us can help ourselves in small ways to beat the big demon.
Apart from being a cricket aficionado -- in which he would certainly qualify as a serious theorist -- Maudgal is a technocrat with a leading industrial house and, on new evidence, has an interesting take on economic matters though he is emphatic that he is not an economist.
His suggestions on how to tide over the current recession without getting into (mental) depression seem novel, plausible and upbeat -- even if somewhat simplistic. The basic premise is that, "Economists believe that people tend to spend their future income and since nobody knows what this is actually going to be, their spending depends on their perception of future income.At depressing times like these, the perceived future income is low and therefore the tendency to spend would be low, despite the current disposable income not really having come down."
Maudgal argues, however, that cutting down drastically on spending would worsen the problem, especially in India which, despite the jingoistic tom-tomming of economic growth over the past few years, remains a third world country. There are still too many people without livelihood or below the poverty-line, and if spend on goods and services is severely curtailed, we could plunge into recession.
This does not justify senseless expense, rather a prioritisation to mitigate the problem, perhaps even improve the situation. There should be a two-pronged thrust, one aimed at curbing needless expense, the other at spending to ensure that the 'Little Guy' does not get hurt for that could bring ruination. So:
a) Hack fuel costs: Take public transport, use a car pool, walk. Expenses reduce and health improves.
b) Scrounge on electricity: Most electricity in India comes from coal. This needs to be preserved.
c) Avoid overseas holidays, but don't cut down on a holiday: Seven million Indians travelled overseas last year. If that number takes a holiday within the country, it would succour the economy.
d) Consumption of everyday goods and services are imperative: Don't sack the driver, the maid or the office boy who are anyway at subsistence level; if they fall below, so does the country, in a way.
e) Instead, 'premium' goods should be given the heave-ho. Negotiate hard with the 'Big Guys', whose survival options may be stronger, spare the 'Little Guy'.
f) Have belief in the future: This helps constructive planning and vigorous action.
g) Good character is built in bad times: Good times don't last forever; a bit of adversity builds 'character'.
This is not Nobel-winning stuff, but it is pragmatic and aimed at how the individual can benefit the collective. Most importantly, it is 'inclusive'. The thesis has a humaneness that otherwise appears to have got lost in the deep scare and insecurity that is being universally propagated in these times.
Moreover, the fact that it comes from a leading corporate honcho provides hope that Indian industry is not completely in a tailspin and bereft of a sense of responsibility.
My personal take on the issue of recession is somewhat oblique, but in a sense complementary. Since it is abundantly clear now that the recession (or Great Depression II, or whatever) has arisen not out of some divine punishment, but human greed, the remedies too will have to emerge from human intelligence, resourcefulness and good sense.
But unless this necessarily looks at the maximum good for the most number of people, there can only be prolonged pain -- both economic and societal.So tighten the lungi, as finance minister P Chidambaram advises, but not so hard as to choke yourself. There is still scope to be happy.
Email: ayaz@dnaindia.net
