Making Growth Happen in India by Kumaraswamy V.;

Author:Kumaraswamy, V.;
Language: eng
Format: epub
Publisher: SAGE Publications India Pvt, Ltd.
Published: 2015-06-18T10:22:15+00:00

3.6 Economic Value of Official Pronouncements and Public Debates

PANICKY VERSUS REASSURING PRONOUNCEMENTS

We were once travelling to Johannesburg (South Africa) from Mumbai in the monsoon time. It was pouring outside. While taxiing for take-off, the captain came on the line to announce, ‘Ladies and gentlemen, as you can see we are taking off in monsoon weather in Mumbai. I expect some heavy turbulence between minute number three and minute seven. After that we will be over the clouds. Be careful and keep the seat belts on and do not move about. I will get back to you after I switch off the seat belt signs by minute nine (9). Enjoy the flight.’

We could see many faces relax into smiles after the announcement. From clutching the seat in front of me, I slouched on to my backrest feeling considerably easy re-assured by the confident tone of the captain. Just to be aware that he is sensitive to the risks and the passengers’ concerns and the feeling that the captain seemed on top of the situation itself made everyone breathe easy.

Imagine a captain with equal concern announcing: ‘Ladies and Gentlemen, as you can see we are flying into heavy monsoon weather. Do not worry. I am an experienced captain and I have seen several such take-offs. It is better to be safe than sorry. So please fasten your seat belt and as a matter of abundant precaution, get into a bracing position, rest your head against the seat in front of you and clutch it firmly and pray till we get over the clouds and turbulence stops.’

Would that have made anyone feel safer or assured them? Doubtful. It would have only created panic in the cabin. The former is an appropriate mixture of being aware of the risks, self-assured voice and meaningful information sharing. The latter is not likely to defuse anxiety, is vague in its promise and does not share meaningful information available with the captain to a larger audience to make them comfortable. Many of our official pronouncements and public debate seem to belong to the latter variety.

NEED TO COMMUNICATE CAUTION IN REASSURING WAYS

By June 2013, India seemed to be emerging from the sustained inflation of the previous 2–3 years. Things seemed to be getting back under control. There were potent signs of interest rates easing, which is so essential for growth. The capital and money markets were beginning to look buoyant and there was an air of expectation that growth was poised upwards.

Then came a couple of sharp announcements from RBI that it does not see things the same way. Despite considerable easing of inflation, it saw more head winds and that it did not see scope of interest rates being reversed anytime soon. But then RBI was not alone. Even the statements by Finance Ministry and the chief economic advisor’s office did not do much to convey confidence.

Their ‘cautious pronouncements’ (communicating risks without an action plan from people and institutions in charge) and the appearance of mutual discordance made the markets (sensex) tank by 7.

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