Talking Shop: Reverberations Felt

“Some calamities—such as

the stock market crash in

1929, Pearl Harbour & 9/11

—are like summer lightning,

bolts striking from the blue.”

― George Will

George was quite right in his ‘Will’ and the statement above. Indeed, not every calamity or meltdown is foreseen or predictable. There are some that remain on the boil for long, even letting off a strident whistle or two in mid-bubble to warn the immediate world of an impending blowout. India’s ongoing financial market crisis can only find its humiliating place in the latter category. A crash nonchalantly ignored for more than a while has finally come about, with some truly stinky things royally hitting the fan. To be kind, we were all so drenched in a voluble verbal volley of nectar and on-the-horizon honeycombs that we turned deaf to the impossible possibility of freak waves hitting our shores. Well, hit the waves have, and they are particularly venomous, having been allowed to fester into a runaway tsunami.

All indicators of industrial health—output in manufacturing units, ready goods piled up in warehouses and holding grounds, people’s lifestyles and spending patterns, and stock index movements—make for a picture of despair, anguish and pain. One single vignette conjures up a terrible visual of India’s stock market; of the 1.2 crore people invested in the market, more than 90 per cent have been trading at a loss for months.

That’s just the stock market. The reverberations of the economic upheaval are being felt every which way, everywhere. “Around 100 crore Indians do not have money to spend even on basic necessities,” says Bloom Ventures’ Indus Valley Annual Report 2025. A further 30 crore people have been categorized as ‘Emerging or Aspirant Consumers’, a segment highly reluctant to opening its purse-strings. Thus, if you are banking on any immediate aspirational wannabe or wannado spending to prop up the flagging market, you can stop dreaming. This is not going to happen anytime soon.

Jaw-Dropping Disparity

Just 10 per cent of the population controls 80 per cent of the country’s money. If we talk of the last few years alone, 73 per cent of generated earnings went to 1 per cent of the richest, while 67 crore Indians (comprising the poorest part of the population) saw flat or negative cash reserves. Let’s chomp on a figure that should shame the well-off every time they order a juicy meal at a fancy restaurant—over 80 crore Indians, or 60 per cent of the population, are surviving on free foodgrain distributed by the Government.

The above backdrop explains why India is celebrating the birth of 75 new dollar millionaires every day. The number of billionaires has crossed 120, up from 9 in 2000. Billionaire fortune has increased 10 times over the last decade, their combined wealth of Rs 40 lakh crore higher than the Union Budget in some years. Dig deeper and little birds give you farra-notes from an Oxfam report, which states that ordinary Indians are not able to access the healthcare they need, with 6.5 crore people pushed into poverty because of medical costs after the COVID-19 pandemic. At its height, this descent into financial narak amounted to two people per second.

The blessed middle class, which we insist has been provided Income-Tax nirvana in the recent Budget, is no better off. The predominantly metro-crowd has been cutting spending on everything—from cookies to food, tailors to plumbers, and mobile devices to LED TVs. Persistently high inflation has squeezed household budgets, crimping our once-brisk economic growth. Slowing urban spending over the past few months has hurt not just consumer goods firms, it has also raised questions on the structural nature of our variegated economic well-being, or the absence thereof. We are, after all, a nation of 142 crore souls.

People, Markets Maimed

In the OND quarter, consumption hit a two-year low, said Citibank, citing indicators like airline bookings, fuel sales and wages. “Part of the fall could be temporary, but the key macro drivers remain unfavourable,” Citi economist Samiran Chakraborty said. Growth in inflation-adjusted wage costs for listed firms—a proxy for earnings of urban India—has remained below 2 per cent through the financial year, below the 10-year average of 4.4 per cent. A factor impacting consumption is declining savings and tighter loan rules. Headline inflation has averaged 5 per cent for a year, while food inflation has breached 8 per cent on higher prices of vegetables, cereals and other foods. Retail inflation hit a 14-month high of 6.2 per cent in OND, while food prices jumped to 10.9 per cent.

The markets have watched and weighed the above indicators, and are now acting on them. It is this that has seen the Nifty show its most dismal performance in 28 years, after the bloody crashes witnessed in 1990 and 1996. Prior to the mayhem being witnessed today, the five big crashes were triggered by Covid-19 (2020), demonetisation (2016), yuan devaluation and Brexit (2015), US financial crisis (2008), and Harshad Mehta scam (1992).

In February, markets saw a crippling fall, the Sensex shedding 4,000 points (a 5-per cent loss). This eroded more than Rs 40 lakh crore from market capitalisation in February alone. In the larger picture, India’s two benchmark indices—the Sensex and the Nifty—have plunged 15 per cent since October. A reason is the pullout of US $28 billion (Rs 2,44,020 crore) by foreign investors in this time, signalling India’s weaker economic lure. US President Donald Trump’s global tariff announcements are to blame too, but not the sole reason for the bloodbath.

Markets dislike uncertainty, and uncertainty has been the Holy Grail since Trump came back as US President. His tariff announcements have been impacting markets and the latest 10-per cent tariff on China is an indicator that he will use the initial phase of his term to threaten everyone with tariffs, softening them for settlements favourable to the US. While Trump and his US team play football with the globe, India has become an unexpected kicking point. There’s only so much that markets can keep carrying till the last straw is loaded on the back.

All-Numbing Truth

Bad news, but all is not lost. There are still some who are doing well and making financial merry. For instance, at the Mahakumbh in Prayagraj (erstwhile Allahabad), vendors of daatun (desi tree twig used to clean teeth) made a profit Rs 40,000 each in four ‘under-study’ days, with many of the 66 crore devotees thronging the ghats happily paying Rs 20 to regale everyone on Facebook and Instagram with their broad, toothy smiles. Those enterprising enough to find, collect and sell plastic cans and bottles were equally well-rewarded, netting per-head profits of Rs 50,000 in those same four days. We have all seen pictures of thousands queueing up to buy these cans and bottles to carry the ‘holy water’ home.

Even those who couldn’t or didn’t make it to the riverside congregation helped others make a killing, as enterprising youth resorted to India’s famous jugaad, unveiling world-first services on social media. People lapped up the opportunity to have their passport-sized photographs printed on laser-jets and immersed in the river. This digital snaan (bath) cost Rs 1,100 per dip. Jugs of Gangajal were bought by ‘agents’ for Rs 5,000 and couriered to kingpins in cities, to be poured into society swimming pools. This allowed residents to find salvation in Noida and Gurgaon itself. These are just two suburbs I am naming; India has hundreds.

So much for the lighter side; the darker one is grisly. In 1929, so many were traumatized by the global stock market crash that an entire generation was lost. 96 years down the line, the world finds itself staring at another meltdown, and India is leading from the front. We have recently been found to be leading the world in “Corruption in Public Offices” too. Any further redoubtable numero uno awards will see more foreign investors skittling away. For India, this is one game of skittles that our market nine-pins will just not be able to withstand.

The writer is a veteran journalist and communications specialist. He can be reached on [email protected]. Views expressed are personal