The soap opera

Gold, onion, rupee, stocks, PSU OFS and tea take centerstage in a riveting 2013

By Mohan Sule

Departures evoke a sense of loss. Yet the closing days of 2013 have triggered no such feeling. On the contrary, the overarching theme is that the worst may be over for India and the world. It could be an illusion but the sense of optimism coincided with the announcement of new faces at the Federal Reserve and the Reserve Bank of India. There is relief that incoming Jane Yellen is of the same old mould as her predecessor and Raghuram Rajan comes without the baggage of obsession with inflation. The composed visage of Yellen and the cheerful countenance of Rajan are in contrast to the tearful scenes being played elsewhere. Some were genuine expressions of sorrow at the death and destruction due to natural calamities: cyclone in Andhra Pradesh and floods in Uttarakhand. Most, however, gave vent to frustration, anger and betrayal. No thanks to these expressions of pent-up emotions, India made to the ranks of the gloomiest nations on earth. That a country viewed as a potential super power and hailed for its vibrant, although chaotic, democracy should descend into despair so soon and so fast could provide enough gist for a fascinating day-time TV drama. If snooping cameras catching bank executives promising to turn black money into legitimate currency afforded a peak into the desperation to boost fee income, it also indicated that traditional banking is no longer viable due to mounting bad loans and that a parallel economy is flourishing despite official protestations.

If confirmation was needed that India is becoming a magnet for hot money, it came from the flight of foreign institutional investors on hints of the Fed reversing its easy money policy on green shoots of recovery in the US, leading to rating agencies to wonder, as usual, retrospectively: was this just a fatal attraction? If the letdown stung the finance minister, already smarting from the hammering of PSU stocks being readied for OFS to fill the revenue kitty, the plunging rupee proved to be the last straw. Sebi’s minimum public shareholding norms for efficient price discovery had the opposite effect of stocks spinning downwards. The balm of Mission to Mars proved a temporary solace. The tears of joy, however, were washed away by the din over whether the country should underwrite the food security bill, especially so when the poor were advised by the heir-in-perpetual-waiting to the country’s oldest ruling dynasty to escape their fate with the velocity of Jupiter. The dry-eyed search for onions that wrecked household budgets had consumers in the same predicament as the government: spending outstripping revenue in a slowing economy. Food items were not the only commodities that left Indians teary-eyed. Gold became the new diva: sought-after by starry-eyed fans for the luminosity but putting off the handlers due to boorish behavior. Investors decamped from gold exchange traded funds, making a beeline to the nearest retailer instead, even as the finance minister and a prime-minister-designate exchanged barbs over the role of the yellow metal in the country’s economic woes.

Unwittingly, this storm in the tea cup has become a metaphor for the raging debate that has captured the imagination of the nation: entitlement v meritocracy. The economic slump has interrupted the middle-class dream of becoming wealthy through education and hard work. The comforting tea has become the unsuspecting beacon of aspiration, and not only for its ability to keep the chill out of an economy gone cold. What permitting controlling stake in multi-brand retail could not achieve, the possibility of a maker of the brew gate-crashing into an exclusive rulers’ club whose predominant members are by dint of their birth did: dissipating the pessimism about India among foreign investors. For a nation weaned on Bollywood potboilers, it is a throwback to the pre-reforms angry-young-man days, when a heroic figure embodying family values and representing the misery of a socialistic society single-handedly took on the entrenched cronyism. This time the difference is that the fight is not to dismantle the system. Rather it is to open the gated community to all. The riveting thriller has had the nation transfixed for the audacity of the plot. The cast of characters includes a sulking patriarch, shadowy aides, gaffe-prone protagonists, friends-turned-into-foes, and historical figures of varying importance in the political discourse. Add a caged parrot singing in his master’s voice to complete the bizarre picture. If ‘nonsense’ describes the irrational exuberance of the Sensex, it also has come to mean rejection of the status quo. No wonder, the passing year resembles a soap opera with plenty of laughs and sighs.