In the past two months we have witnessed several economic crises which have had ripple effects on global economy – Greece’s debt crisis, China devaluing the Yuan, and the most recent one is the Monday’s stock market crash. Where do we look to when we want to understand what is happening? Not difficult to guess, right? Institutes like the International Finance Corporation, reports released by World Bank, or Asian Development Bank, or the central banks of different countries (RBI for India). They are the experts.
However, a large section of Indian population depends on other sources for their guidance and comprehension of economic terms and policies. They closely follow religious Gurus and some politicians who hardly have an iota of understanding about economics or how macroeconomics work. Following them would just lead up to a blind alley.
Let us have a look at some of the ideas propounded by such men – ideas which seem to have no relation with ground reality.
To begin with, we have Baba Ramdev. We are not questioning his credentials in Yoga, or his spirituality. Undoubtedly, they have their benefits. But how about his panache for all ills related to Indian economy – abolishing all taxes (except the custom duty) and replacing them with a banking transaction tax? It would lead to a loss of government revenue to the tune of Rs 10 lakhs crore, though the new tax would fetch around Rs 15 lakhs crore. Should not the government be happy on earning a net of Rs 5 lakh crore?
When the reverend Guru was making these suggestions, some of the leaders of BJP were hands and gloves with him and agreed that they would implement some of his schemes. Till date they have not been implemented. We wonder why.
Then we have Pandit Sri Sri Ravi Shankar. With all due respect to his spirituality, we still fail to understand the statement he made as long back as March, 2014 that if Modi came to power then rupee would get stronger at Rs 40 per dollar. It was a part of the election gimmick, meant to exploit the ignorance of the masses. All we can see right now is Rs 66.25 = USD 1.
We cannot close this topic unless we touch on Mr Subramanian Swamy who had predicted in May 2012 that in the year 2017, Rs 1 would be equal to $1. He knows his economy, so was it meant to be sarcastic? Even if it were, would a lot of people understand the sarcasm?
The question that we should ask is whether such economic theories will ever see the light of the day or were they only tall claims. Moreover, the context in which such theories were promoted makes us wonder if they were simply election gimmicks. Such spiritual Gurus and politicians have a large fan following, a lot of whom are illiterate. Even those who are literate would be tempted to vote for particular political parties, thinking that such election promises would be kept. While those fans of them are duped we also wonder that if those spiritual Gurus and politicians elaborate on economic terms and theories, where the Governor of RBI or other economic experts would go. They would have to take the backseat as they would not be needed for any statements or monetary / fiscal policies. Their ideas would be sidelined. Devotion is fine, but blind devotion which can have such far-reaching effects need to be stemmed at the source.