January 1 is when the Western world begins making economic forecasts for the entire world. And yet, the fiscal year is actually different for different nations
The year 2016 of the Gregorian calendar has just concluded. India, officially, as per the Nehruvian diktat, follows the Saka era. In my limited interface with the Government over the years, I have never received any letter from the Government even mentioning the optional Saka era.
A vast majority of the country follows the Vikram era. This era is largely lost upon the political and social elite of the country which is predominantly, anchored in the Western tradition. The corporate world is also largely dominated by this class. There too the Gregorian calendar is the popular framework of working.
The New Year is celebrated by a large part of the elite of this country as January 1. The immediate preceding week, having the celebration of Christmas, makes it largely blocked for much serious business activity. This is not a rhetorical observation. It has implications on our search for identity and quarantining one's place in the global system.
Consider the period of Ramzan as a factor in West Asia.The world knows that these are special days and factors in the office timings while dealing with them. Examples can be multiplied. However, the bald truth remains that the Gregorian calendar does dominate the business cycle in India. Hence the media in the fortnight around the New Year is replete with business forecasts.
Of course, in the British tradition, our financial year ends on March 31. Australians begin their financial year on July 1, and many other economic zones have other financial new year beginnings.
Till not so long ago, traditionally, the Union Budget was presented in the afternoon in Parliament because, ever since the Budget presentation began, it had to be in time in the UK for the country’s business hours to begin. Mercifully, we have now got beyond that. This year's parliamentary Budget session is to begin early.
Identity requires a ‘form'. Indians are often identified with the dhoti. It may be worn cross-legged or waist-tucked in front or back. A certain percentage of the population, however, does not wear the dhoti. Identity is the business of perception and conditioning.
The larger point is that, around January 1 is the time when business forecast are attempted by many of the Western educated elite, in India. Irrespective of the reliability and credibility, there is no dearth of people who have suggestions to give for the new year's economy While making an inventory of the concerns raised, the front-runners as of today, in the class of international economic variables, is the US Federal Reserve and the raise in rates at a faster pace than earlier on. The theme of Organisation of Petroleum Exporting Countries (OPEC) and oil prices continues to keep economic analyst and the soothsayers busy. The GST and the demonetisation process are matters of endless speculation.
If this was not all, the political uncertainty of Europe, the likely redefining of the london economic market and, the impending swearing in of the unguided-missile called Donald Trump, continue to catch everybody's attention. India goes on endlessly with its cathartic political sloganeering, as China contributes its share to the volatility of global financial markets. Today, the flow of capital to US assets has pushed the dollar to over a decade's high and Renminbi is being subjected to downward pressure. The Chinese economy and its leveraging corporate balance sheet remains an enigma wrapped in a mystery.
Be that as it may, no narrative, like the one above, can be complete without reference to the fact that in all the wisdom that is pouring out in the media, there is no reference to the biggest and the most lucrative market of them all. It is the market of arms and armament. This unlisted market perhaps determines the state of the global economy more than any other single product or service. It is duly serviced by tax havens and by experts outside the acknowledged global system agencies or at best subterranean streams of the existing political systems.
One wonders about the calendar, form, content, price and worth of economic forecasts. What is the price of believing the forecasts of the flourishing-industry-and-trade of financial analystsIJ
(The writer is senior managing director and principal economic advisor, Protiviti India Member Pvt ltd)