 Hello and welcome to NewsClick. Today we're joined by Senior Economic Journalist Anandya Chakravarti and we're going to be talking about both 2020, the year that passed and 2021, the year that's coming up, especially the economic scenario which has really not been a lot of good news as far as the countries can send. Anandya, thank you so much for joining us. So we've talked about this over the many weeks in this past year and it's in some ways it's almost, it's almost a cliche to common knowledge to say that the economy is bad across the world. Yes. In India's case it seems especially say dire because of course like you talked about earlier many of these indicators were already bad. So what the pandemic has done is made it worse of course and I suspect as opposed to many of the other countries especially in the region which are likely to see once the crisis kind of a bit some sort of growth and some sort of general say increase in demand. India does not seem to be going there. So maybe first could you talk about this scenario in terms of why even if the number of cases comes down and we have some sort of medically we are kind of covered the economy is still going to be in danger. Well you know Prashanta as you know that since the, I think for several years now India's economy has been doing very badly right and we've seen accusations and allegations of data fudging and it's very clear that the data itself is not very transparent that the government has been putting out about economic growth and economic growth we know when we even if we look at all the high GDP growth years that we've had in the last so many years let's say two decades or so we do know that even there growth has actually been for just a very few people right. So even the high growth years of let's say the 2005 to 2008, 2009 and even later due to government spending for a few years then we know that there have been two kinds of things consumption by the affluent middle class the upper middle class and a certain kind of demonstration effect for the poor especially those who are directly in contract with the upper middle class and investment which was entirely driven by debt and we know what that has caused in the market so we saw very high investment to GDP ratios earlier that close to 30% but that was fueled by debt that was being put into things which later on we knew had no demand no money at all I mean you were putting huge amounts of money into the power sector and expecting people to pay 15 rupees a unit you were putting huge amounts of money in construction in toll roads expecting people to pay toll and obviously none of that actually worked out or even this very ridiculous real estate boom that we saw in the in the 2000s which we know was unsustainable because it expected almost every Indian to be able to pay 1 to 2 crore rupees to buy a house right so it is quite ridiculous in any case what has happened of late Prashant and I think we've discussed this in the past is that since 2011-12 we've seen the middle class essentially gradually facing problems and we saw them suddenly being very concerned about corruption for instance right everything that they gained from all this guys suddenly they got very concerned about corruption and they came out of the road supporting Anna and Nolan and all that and they said the corruption is the biggest problem in this country we need a clean prime minister and we saw Narendra Modi come in with the promise of Achyedin and we know that Achyedin has now the only Achyedin is for those who believe that Achyedin means Ram Mandir and Article 370 for them there has been Achyedin but for the rest when it comes to material conditions there is no Achyedin so the middle class let me start with the middle class because I think the middle class is something that we don't talk about and the middle class has had a terrible time in the past one year it's been terrible and actually this has been before COVID itself because let's take the CMI data right because the government doesn't produce any good reliable employment data CMI and I think it was in alliance with BSE at some point it started doing these weekly surveys and putting on that data so at least there's a consistency there's a like to like comparison there and let's take something that the middle class has always wanted which is salary jobs and I'll come to that salary jobs aspect later if I look at the average number of salary jobs in 2016 when CMI started collecting this data and compare it to what it was in 2019 before COVID right then we know that the average the number of salary jobs actually declined by 3% between 2016 and 2019 so you can't you can't really blame COVID for that decline and what happened in terms of job seekers job seekers would have gone up by a percent every year so the actual gap is actually a five six percent in terms of jobs that are available in 2016 and they're not available anymore and this is salary jobs which is what everyone wants because it's stable you get a salary at the end of the month now what happened in COVID what happened in COVID was that the immediate impact was obviously on daily wages and what is called small traders right those who are on the roadside selling you banana and chai and then you know doing various kinds of jobs they were completely badly hit by the lockdown and then they recovered because they have to they can't sit at home right the lockdown has no meaning for them they have to go out or just to survive now the second big hit which CMI came out with the data in August was salary jobs so I just took a look at the latest data that we have from CMI for November and compared to 2019 average right the number of salary jobs in India is down by 21 which suggests there are every hundred people every hundred people who had salaried jobs in 2019 21 don't have it anymore okay and this is not just the bottom lot we know that this has happened actually across the board right at the top as well even well-paid jobs are gone right and what is more likely is that the decline is actually probably closer to 30 percent and maybe some parts have been hired what happened that you pay someone at a senior level a lack a month and you find this is a good opportunity to get rid of them because you know that some of the salary gains that they've had is just seniority right it's just increments that they get while doing more or less the same work exactly and you can replace them with someone who actually you'll pay 40,000 rupees a younger person maybe not experienced but then the market is so bad what are you going to do with experience right so you get someone a 25 year old to replace a 45 50 year old person so someone who was earning one lakh he replaced with 40,000 so I think even that has gone down a large number of people have lost their jobs at that level and some have got replaced so I wouldn't be surprised if out of the affluent middle class who was salaried at least 20 to 25 percent have lost their job I would I wouldn't be surprised by that number that is a huge huge impact when it comes to demand right absolutely and we're also talking for instance about the other side which is patents as well and the kind of impact it has on savings because the those numbers could be as much if not yes in fact there is a new survey by an agency called the local circles I think they do buy by annual surveys on consumer what they call the mood of the consumer survey they do it twice a year their latest survey which of course paints a slightly rosy picture claiming that people are now ready to buy how that's possible because the rest of their data suggests that 68 percent if I'm not correct if I'm not wrong 68 percent of their respondents said that their savings have gone down this year right the savings have gone down this year not because they for various reasons because they had to dip into their savings to run their families so there are three reasons that to these local circles gives one is as you said people have lost their jobs the second is there have been big pay cuts and which have not been fully reinstated in most industries and finally in many cases salaries were paid very late so people were told that you will get a salary but we have a cash flow issue so please wait we'll pay you slightly later I mean I as a consultant used to do you know some work for a big news organization and in April they actually requested me and said that can you take it in two parts this is a big entity and I'm not talking about NDTV where of course I have to work but this is a newspaper which said that can you take your money which you in two parts because we have a cash flow issue right so there were delays in salary payments and people dipped into their savings and that is what has happened absolutely right so this context like again it's an issue we talked about earlier as well but what we see is because of this automatically consumption declines and then there is this complete slowing down of the entire economy the whole you know there's generally no real will to buy it's more in terms of a conservative attitude to its spending as well obviously no vacations which may have worked out yeah for the middle class yeah for the middle class it's worked out but you see there's a big industry which depends on tourism they've been badly and there is a part of middle class there as well which would have been hit but you know I'm reminded of what P. Sainath said when he was addressing students in jenu right after you know when Kanhaiya Kumar and Umar Khaled then yeah when that entire Zee fake news thing happened right and P. Sainath came and he was addressing students and I think he started by saying welcome to the rest of India right what he meant was that the rest of India has never seen democracy I mean people if they say something will be picked up their police can come and pick you up anytime they want if you don't pay your loan back in time your land will be taken away your tractor will be taken away uh microfinance companies might come and beat you up for all you know and even the sense of free speech does not agree exist for most of India so the rest of India that's it and therefore Prashant I'd say that for the middle class it is a bit of a welcome to the rest of India this has been welcome to the rest of that is what it is this the rest of India has been doing badly for the last 35 years right and all kinds of data fudging fake you know looking at calorific values set in some time 40 years ago and then adjusting it by a index of inflation and saying so many people are poor have come out of poverty we know this is all this is all popular right people have become poorer this higher degree of malnutrition more hunger there's stunting amongst children we know all these things cannot happen if people become more affluent and that is we know that per capita consumption of almost everything other than I think eggs has gone down for Indian sense liberalization it has not improved and that means that is despite the fact that people like you you and I have been consuming even more than we were in the 80s I don't know whether you were born in the 80s but at least I was somewhere in the middle of it okay so I was at least consuming I can and we were we are consuming much more even in terms of feed and fodder right so a lot of the out grain output actually is not just eaten by human beings so our consumption of meats and stuff might have increased whereas the poor have actually got got even worse so the point is for the middle class India's entire development strategy since the mid 80s has been too panda to a middle class consumption right and growth when we look at it is entirely that right there's hardly anything captured outside that the GDP numbers hardly are just estimates right 75 percent of manufacturing is essentially just a few listed companies their profit right value added and then rest are estimates and then there's a certain amount captured in agriculture we know how badly agriculture has done in the last 30 years there in the Sharma estimates that there's been hardly any real income growth of farmers in the last 30 years whereas the rest of India has grown in real terms and just look at India's GDP it's been growing on and let's say even conservative terms 6 percent on an average for the last 30 years right and despite and that is real that's not nominal that's real GDP growth so technically everyone's income should have increased by that point but farmers we know have been stagnant workers we know are probably worse off EPW studies show to us that workers in terms of their share of wages compared to productivity is worse now than it was in the 80s so the rest of India has been doing badly finally it has caught up with the middle class and I think one of the things that the middle class the problem the middle class now has is that it essentially has absolutely no political points it doesn't it just controlled every institution so it could have done whatever it wanted now it also knows you know just pandering to the middle class is not going to get you votes right and this government this dispensation this Modi Shah BJP knows that so and they count on the fact that how you know a large part of this middle class especially the mercantile classes are happy if you give them a bit of interest right how long that will last I don't know but nevertheless so their aim is to get money from that 0.1 percent top keep them happy create monopoly capital and there is that 30 percent in the bottom right don't give them jobs don't make them a give them anything just give them basic elements of dole to keep their nose above the water that is the system we are in and it's going to show up in it's obviously showing up in GDP data for years now however much you make budget and as you said consumption is going to be badly hit so but does that affect and for sections of the middle class there's always Hindutva as well too and like you said yeah Achyutin is there for those who have won the Ram Mandir absolutely yeah and and you see one of the processes that began in the mid 2000s which is of a few corporates completely taking over all media mainstream media right so today mainstream media is a is closely held by let's say five or six corporates with big external interests outside the world of news media and they determine what is going to be who is going to be the person on TV whose the byline will go on the front page whose opinion will be on the opinion pages so they control media completely in a very detailed manner so there's a manufacturing of consent which has been taking place every every day every minute so the for the middle class to even realize that things are bad because they think it's not that difficult to make the middle class feel that the problem is somewhere else maybe that because too many people celebrate Christmas that is the problem yeah so so I think that broadly the middle class is in for trouble and we are seeing that across the board one of the things that is I think we discussed last time as well Prashant is that you know from the mid 80s I'll take my example right we used to live in a rented house with a garden a reasonably big plot and somewhere in South Delhi and then and my parents used to pay 300 rupees a month I think 330 rupees a month till 1985 86 and when that 85 86 boom started the first real estate boom started the landlord who had always been quiet suddenly wanted to sell the house so my parents also had to look for a house they also had to build their own house so this is not a this is not an isolated case I mean across India professional middle class people were teachers doctors engineers whatever lawyers broadly within a you know within an income group which kept them reasonably okay but with very few aspirations beyond that right and they suddenly had to buy homes there was a real estate boom people who already had the homes they suddenly became very rich their property values increased and that entire process began of grammy awards coming I don't know if you by the time you were probably watching grammy awards was a regular feature but grammy awards miss universe miss world you know oscar awards right these being projected live on t-podcast live on tv was a big thing we had no access to the west other than that and suddenly I wanted to you know make my hair like Andrew Ridgely and George Michael right they used to use something called hair mousse yeah I got to know that they use hair mousse to make this and I discovered that you could do the same with using vikko vajradanthi not vajradanthi vikko turmeric and I also simko hair fixer with sick gentleman used to fix their beard you could get a wet look this is jukar before the days of all these things and I gave this information to many of my friends sadly some of them have turned bald premature but what I'm saying is that suddenly there was this idea that we as the middle class are going to live the lives of what people were living in Singapore right you're talking about Singapore is so great and India has been held back by socialism and stuff like that suddenly you've come full circle because when you are the only people who earn and consume at some point there'll be no one to buy your services or your process and that is what the middle class today faces absolutely thank you so much Anand if you're talking to us thanks a lot that's all your time for today keep watching this