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How COVID-19 is adding to the existing NPA crisis in India

As described by the Reserve Bank of India (RBI), “An asset, including a leased asset, becomes non-performing when it ceases to generate income for the bank.” When banks give out loans to borrowers, these loans are treated as assets. In some instances, when borrowers stop providing interest and other payments for a period of time, banks treat these as NPAs. 

Increasing NPAs burden the financial system and deteriorate the health of banks. As banks stop getting returns from these assets, their profitability is affected. Along with the negative effects on profitability, the loss rate of banks also increases. As the funds of the bank decrease, the future lending capacity of banks is heavily affected. These different events leave banks vulnerable to various unexpected events, namely economic shocks.

Now that the COVID-19 shock is in place, “The level of the NPAs is going to be unprecedented in six months from now if we really recognise the true level of NPAs. We are in trouble and sooner we recognise it, better it is because we really need to deal with the problem,” said Raghuram Rajan at the India Policy Forum in  July earlier this year.

Take a look at the table below that indicates the Gross NPAs of banks from 2016-2019.

Source: Department of supervision, RBI

From the data, we can see that banks had made an overall recovery in 2019 with lower Gross NPAs compared to the previous year. This progression made by banks is now being undone by the pandemic. 

Additionally, the data shows that there is a stark difference between the Gross NPA levels of public and private sector banks. 

Public sector banks (PSBs) have relatively lower capital adequacy compared to private sector banks. PSBs are not efficient at managing their NPA ratios, even the technology used by these banks is not as leveraged compared to private sector banks. Another contributing factor to relatively high levels of Gross NPAs in the PBSs is the vulnerability of these banks to promote certain economic sectors of society due to political pressure. 

The stabilization of PSBs and restructuring of their financial affairs is essential for the PSBs to absorb the shocks caused by the COVID-19 pandemic.

During times of an economic crisis, testing the resilience of financial institutions becomes imperative for the government to get a ground reality of the situation. Doing this helps the government understand how volatile the market is. Once the assessment is made, governments can then apply relevant reforms to stabilize the financial system. 

To assess the current health of banks in India, stress tests were taken by banks under certain guidelines of the RBI. Though it was known that the results of the tests would be disappointing, they are far worse than expected. Reports show that the Gross NPA ratio of the banking sector is likely to increase from 8.5% in March 2020 to 12.5% by March 2021, or even up to 14.7%, if adequate measures are not taken. While the GNPA ratio of the PSBs is expected to increase from 11.3% in March 2020 to 15.2% by March 2021, the private sector banks are expected to increase from 4.2% in March 2020 to 7.3% by next year. 

We should be extremely worried about high NPA levels as it starts a chain of deteriorating financial events. High NPAs lead to low profitability of banks. The lending capacity of banks as well as their income decreases. Additionally, since the banks are unable to increase their lending, money flow is reduced. To add to this, the confidence that the public has on the banking system is heavily impacted and shareholders start contracting their investments. Thus, the issue of rising NPAs is not just an issue that banks individually face but is an issue that impacts the financial system of the country and in turn the economy.


In an attempt to curb the financial distress caused by the pandemic, the RBI attempted to bless financial borrowers by extending the moratorium on all term loans by six months. Though the moratorium ended on August 31, the government recently announced an extension that allows for a two-year loan moratorium in the case that a borrower’s cash flow has directly been affected by the pandemic. An interest rate cut has also been issued to boost the economy. 

While there is an appraisal that the new monetary policy is accommodative to the plight of the borrowers, it is unlikely that this policy is going to ease the financial burden faced by the banks. The balance sheets of banks may improve, they may gain temporary relief from the pressure caused by NPAs and even increase market liquidity by increasing the amount of money that banks may have in hand, either to invest or to spend. The fact remains that the lending capacity of banks will not improve as the amount of money flowing will remain restricted. People’s spending capacity is not going to improve for a while and even with loan extensions, it remains uncertain whether the NPAs would get converted to profitable assets in the future financial years. 

Before India was struck with the COVID-19 pandemic, the banking sector already faced issues with poor health. Bad loan judgements, ineffective asset management strategies and over-relaxed lending norms have previously contributed to high NPAs of banks. For an emerging economy like India, the road to recovery is going to be a difficult process indeed. While it is imperative for banks to internally re-structure lending processes, the RBI and the government also play an important role in the strengthening of bank systems. 

Shrishti is a Politics, Philosophy and Economics major at Ashoka University. In her free time, you’ll find her cooking, dancing or photographing.

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When should I stop watching the news?

By Siddhartha Dubey

The simple answer to that question is now. Like, right now, today. 

There will be two immediate advantages. One, you will save money and two you will be better informed. 

TV News is rubbish. Right from the fake news and opinion infested Republic to the boring and increasingly shallow NDTV. You will be better off reading broadsheets and consuming your news online. I don’t need to tell you what’s online and the great multimedia content that is created every day by teams at the Wall Street Journal, Vice and so many others.

There is so much online, to the point that there is TOO much. Hundreds and thousands of dollars are being spent on digital newsrooms around the world. New hires must be able to report, edit, shoot, produce and naturally write.  

Photo Credits: Mike Licht

My basic issue with television news (in India) is that it has (largely) become a platform for lies, half-truths, reactionary and dangerous opinions and a place where the government and its militant supporters are able to get their views across without being questioned.  

The quest to curry favor with the rulers of the nation and Dalal Street means ‘whatever you tell us, we will air.’ This translates into advertising rupees, government favors and protection. 

The race for television ratings or TRPs is a discussion for another day. 

So, what we have is a system geared to do anything but inform you, and analysis or even sensible commentary. 

So NO, Times Now did not have its hands on a “secret tape” given to the channel by “security agencies” of two prominent political activists criticising the Popular Front of India.

The recently aired recording was from a publicly available Facebook Live. 

And NO, the banknotes which were printed after 500- and 1,000-Rupee notes were made illegal in early November 2016, did not have microchips embedded in them so as to ‘track’ their whereabouts at any given time. 

Yet television news teams and program hosts spent days vilifying the social activists and comparing them to terrorists out to destroy India. Or in the case of demonetization, championing the government’s “masterstroke” against corruption and undeclared cash.

There is a monstrous amount of fake news swirling around the airwaves and invading your homes. And a large part of it comes from bonafide TV channels which employ suave, well-spoken anchors and reporters. 

Given the commissioning editor of this piece gave me few instructions on how she wanted this article written, I am taking the liberty of writing it in first person. 

I don’t own a TV because I hate the news. I get angry really easily. Calm to ballistic happens in seconds and the trigger more than often are clips posted on social media of Arnab Goswami from Republic TV, or Navika Kumar and her male clone Rahul Shivshankar of Times Now. 

My friend Karen Rebello at the fact-checking website Boom News says “fake news follows the news cycle.”

Rebello says the COVID pandemic has given rise to an unprecedented amount of lies and half-truths. 

“We see so many media houses just falling for fake news. Some of it is basic digital literacy.” 

Rebello says very few news desks, editors and anchors who play a strong role in deciding what goes on-air question the source of a video, quote or image.

And then there are lies and bias such as Times Now’s “secret tapes” or supposed black magic skills of actress Rhea Chakraborty. The story around the unfortunate suicide of Sushant Singh Rajput is a veritable festival of un-corroborated information released by (largely male) news editors and personalities committed to destroying the character of Ms. Chakraborty. 

I am not on Twitter. 

I used to be. 

But took myself off it as I became so angry that I become stupid. 

So, I don’t know what hashtags are trending right now. 

Guessing there are some which link drugs and Bollywood, Muslims and COVID and Muslims with the recent deadly communal riots in Delhi. Oh yes, I am sure there is a happy birthday prime minister hashtag popping up like an orange in a bucket of liquid. 

Hashtags are sticky, ubiquitous and designed for a reason. Often, they act like an online lynch mob; a calling to arms around a particular cause or issue. And often they are not such as the simple #PUBGBAN.

What a hashtag does is put a spotlight on a particular issue and that issue alone. 

So, when a hashtag linking Ms. Chakraborty with illegal drugs is moving rapidly around the Internet and TV news channels, people quickly forget that quarterly economic growth in India is negative 24 percent, or new data shows over six and a half million white-collar jobs have been lost in recent months. 

Get it? Check my new lambo out, but ignore the fact that I mortgaged everything I own to buy it. 

Thanks for reading this and for your sake, don’t watch the news!

Ends.

Featured Image Credit: SKetch (Instagram: @sketchbysk)

Siddhartha Dubey is a former television journalist who has worked with in newsrooms across the world. He is currently a Professor of Journalism at Ashoka University.

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COVID or Not, The Campaign Must Go On

By Neelanjan Sircar

The upcoming polls, in Assam, Bihar, Kerala, Tamil Nadu, West Bengal, pose unprecedented challenges in election management. Even in the best of times, regulating the behaviour of political actors during elections is nearly impossible. Anecdotally, candidates regularly spend over the farcically low spending limits for candidates (although the official data show otherwise) and all manner of distribution of alcohol and cash occur in the days leading up to the polls. But this year has brought forth even more challenges. In the aftermath of the COVID-19 pandemic, parties will be heavily restricted in hosting rallies or other large public events that are so crucial to a standard political campaign.

But the campaign must go on. I imagine that two campaign activities will be used as substitutes for the traditional campaign. First, in the absence of large public gatherings convened by high profile politicians, parties will have to rely much more on “within village” activities like door-to-door canvassing. Second, outreach to voters — especially from the party elite — will be far more dependent upon social media and other digital media. 

This will likely generate advantages for the Bharatiya Janata Party (BJP), by far the most well-funded party that has invested the most in its social media campaign strategies. For instance, data from the fiscal year 2017-2018 provided from Association for Democratic Reforms (ADR) shows that the BJP received 210 crores out of the total of 222 crores from the controversial “electoral bond scheme” ushered in by the BJP, a staggering 95% of all electoral financing through the electoral bond method. This infusion of money has been crucial to maintaining electoral machinery that swells to impressive proportions during election time. For instance, in the 2019 national election, the BJP fielded an army of panna pramukhs (literally page chiefs), who were assigned to keep track of 30-60 voters each. While panna pramukhs were not fielded everywhere, the very fact that they can be fielded over a large swathe of the country indicates both the scale of funding available to the BJP and its commitment to building dense ground-level machinery during election time.

The existing investment in ground-level campaigning will be a huge asset for the BJP. In a time when movement is restricted due to the COVID pandemic, the ability of ground-level workers to mobilize and bring people to the polls is likely to have a greater impact. Furthermore, these same restrictions will make bureaucratic monitoring of elections and campaign behaviour more difficult, perhaps emboldening ground-level actors to use quasi-legal means to mobilize voters.

The BJP also has consistently demonstrated its proficiency in reaching voters through social media. The BJP of Narendra Modi and Amit Shah may not have been unique in their political appeals with respect to religion and caste, but it has been an innovator in campaign methods. Outside of the Congress, the (regional) parties that grew out of the 1990s built their campaigns in a particular manner that was labour-intensive and dependent upon the control of ground-level leaders that often had caste credentials. The BJP realized that if it had to spread beyond its traditional bases of support, it would have to develop a method of directly reaching the voter in places where it did not carry favours with local elites. The development of a strong social media campaign has created a direct channel between the central leadership, and Prime Minister Modi in particular, with the voter. This was a strategy that was effective, for instance, in the 2019 national elections in West Bengal.

Google search data provides a suggestive data point for BJP’s dominance in social media campaigning. While it is true that users of Google are likely to be younger, wealthier, and more educated than the general population, the recent spread of cheap smartphones in the countryside has significantly broadened access to the platform across India. In Google searches about politicians over the 2019 election period, an extraordinary 75% of searches were about Narendra Modi, compared to just 12% about Rahul Gandhi. Of course, this is only the tip of the iceberg. The BJP purportedly has extraordinary advantages in most social media and peer-to-peer campaigning through platforms like Whatsapp. 

Here too, the challenges of monitoring and auditing party behaviour are likely to be significant. During the elections, the Election Commission of India (ECI) has significant policing powers, regulating the content of campaigns and policy promises. As communication with the voter decidedly shifts towards social and digital media, where the content is less visible to third parties, the ECI is compromised in being able to regulate campaigns.

The 2019 national election exposed concerns about the impartiality of the ECI. A number of observers felt that, in the process of regulating content, the ECI showed biases towards the ruling BJP. This was in stark contrast to the narrative of the ECI that had started in the 1990s under TN Seshan and continued by subsequent heads of the ECI — which was seen as aggressively maintaining a level playing field for candidates and parties. The consequence of a level playing field was the democratization of the electoral space with new parties and new kinds of electoral appeals entering the system. 

The real threat to democratic norms today is not a momentary shift in campaign tactics due to the COVID pandemic. Rather, it is the fear that new forms of campaigning that are effective in skirting regulatory norms will get locked in, particularly when the ECI has shown little interest in innovating to meet these challenges. For all of its pathologies, the Indian electoral system showed that simply allowing parties to compete on equal footing generating high turnover in ruling parties at both the state and national levels.

Today, as the very basis of equal political competition is being challenged, we must wonder if brute force and money are all that is required to win elections.

Neelanjan Sircar is a Senior Visiting Fellow at the Centre for Policy Research and Assistant Professor at Ashoka University. His research interests include Indian political economy and comparative political behavior .

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National Education Policy 2020: Implications for Students with Disabilities

By Monika Bhalvani

Since its inception, the Indian education system has been primarily built on an ableist framework. A multiplicity of factors, including inaccessible infrastructure, lack of inclusive teaching and learning practises, rigid academic curriculum, have played a contributing role in systematically leaving out a majority of students with disabilities from the education system early on. The detrimental effects of these are shown through a steep decline in the enrolment and retention rate of students with disabilities after completing their primary school. Because of this, about 45% of people with disabilities are uneducated and  62.9% of them between the ages of 3 and 35 have never attended regular schools.

While this form of an education system structurally denies students with disabilities their basic right to education, the recently drafted National Education Policy 2020 (NEP 2020) provides a ray of hope. The draft states, “Children with disabilities will be enabled to fully participate in the regular schooling process from the Foundational Stage to higher education.” This focus on creating a thorough support system right from an early age opens up multiple avenues for students with various forms of disabilities to be integrated into the regular schooling system. The new NEP is built on the foundational pillars of access, equity, quality, affordability, and accountability, that promises a learning environment that is conducive to the learning needs of students with various disabilities. 

The NEP 2020 endorses the recommendations from the Rights of Persons with Disabilities (RPWD) Act 2016, and states, “Barrier free access for all children with disabilities will be enabled as per the RPWD Act 2016”. This recognition of the RPWD act and its provision to enable an inclusive system that is adapted to meet the learning needs of students with various forms of disabilities is in itself a major form of victory for the disabled community. Along with this, the draft explicitly talks about how the inclusion of students with learning disabilities will also be ensured, and teachers would be helped to identify such learning conditions early on. The emphasis laid on the need for developing an inclusive education system that caters to the needs of students with both visible and invisible disabilities prompts that we have indeed come a long way in our fight to promote inclusion in the education system.

Picture Courtesy: Wikimedia Commons ( changes made)

While laying this foundation stone for inclusion, the NEP 2020  brings forth certain points that would be taken into consideration during the planning and implementation process. Some of the important recommendations include recruitment of teachers with cross-disability training, usage of assistive devices and appropriate technology-based tools to integrate students with disabilities into classrooms, providing flexibility for all students with different disabilities to learn and grow at their own pace with appropriate assessment and certification. While enabling this, it also gives due importance to training teachers on inclusive pedagogies that cater to the varied needs of students. Focusing on the need for implementation of peer sensitization programmes, it says, “The school curriculum will include, early on, material on human values such as respect for all persons, empathy, tolerance, human rights, gender equality, non-violence, global citizenship, inclusion, and equity.” Implementation of all these points could create a stimulatory environment for students with disabilities to integrate and grow in a regular classroom setting. 

While we have come this far in terms of policy documentation and it’s surely a welcome step, there is still a long way for us to go. Given the complex nature of how different disabilities manifest, we need to take into account multiple factors at both the planning and implementation stages in this process. In doing so, we need to take into consideration a lot of issues that the NEP 2020 misses out on, and discuss how it can be tackled and developed further. 

Firstly, the NEP emphasizes on how teachers will be trained and students will be sensitized. However, what is majorly lacking here is the involvement of students with disabilities themselves in the process of devising policies. Time and again, the disability rights campaign, “Nothing about us, without us”, has emphasized the need to allow full and active participation of people with disabilities while developing or implementing any policies for them. Thus, it is extremely crucial to actively involve students with various disabilities in understanding the specific areas of concerns and plan strategies to tackle that during the planning phase. 

Secondly, we need to pay utmost attention to the way the changes in NEP 2020 pertaining to students with disabilities will be implemented. Our existing education structure, built on an ableist framework, provides very limited scope for students with various disabilities to engage and fully participate in any classroom setting. There needs to be due thought and consideration given to how the proposed changes in the new NEP will be integrated into the existing education structure that we have in place. 

Thirdly, and most importantly, the NEP 2020 completely misses out on the various intersections that exist in the disabled community itself in terms of gender, caste, class, and socio-economic backgrounds. While making a comprehensive policy for students with disabilities, it is important to ask questions that cut across all these aspects. For instance, given that gender is one of the big determinants of increase in drop-out rates from school, we need to consider the provisions that will be made for female students with disabilities to retain them in the education system. Therefore, using an intersectional lens to rethink the existing education policies and the NEP 2020 would help in bringing about desired outcomes in the education system. 

It can be said that the quest for developing an inclusive education system has just started, but there is a lot more that needs to be achieved moving forward. After all, it is the inclusive mindsets and increasing focus on grassroots-level research in this area that would determine if we are moving in the right direction in building an inclusive education system– a system that embraces the differences that each student brings and fosters positive growth right from the beginning.

Monika Bhalvani is the assistant manager of the Office of Learning Support at Ashoka University.

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Myth Theory – Dum Maro Dum

By Devdutt Pattanaik

Published in Devlok, Sunday Midday, April 24, 2011.

Cannabis is an illegal narcotic in most parts of the world, even India. Its more deadly form is called Marijuana. From it comes some of the most lethal addictive organic drugs that ruled the party circuit until the arrival of even more lethal, even more potent, even more addictive chemical drugs.

But still, it is amazing to see Indian television soap operas directed at women showing Bhang being prepared from leaves of the Cannabis plant and consumed by the family during Holi. We have Bollywood songs where heroes and heroines run around trees consuming Bhang and singing “Jai Jai Shiv Shankar” and then we have the famous “Dum Maro Dum” with a very young and very beautiful Zeenat Aman surrounded by hippies smoking pot, hoping it will destroy all sorrow. No one is upset or outraged. An acknowledgement that Cannabis is sacred in India — it is sold in the temple markets of Varanasi, Puri and Nathdvara. Every sadhu smokes this potent drug.

Shiva, the hermit, smokes Cannabis. He is described as always being on a high. There are miniature paintings showing Parvati making Bhang for her husband. She berates him for always being in a hemp trance and never doing household chores. Krishna’s elder brother, Balaram, is known for his fondness for Bhang. Bhang drinking is a common part of rituals in Vaishnav temples. It is called a coolant to calm the short-tempered Shiva and Balarama.

Not just cannabis, many stimulants and depressants, including alcohol are part of sacred and social traditions all over the world. Vedic priests kept referring to Soma which enabled the mind to take flight! Homer’s Odyssey refers to lotus-eaters who lie around all day doing nothing. Across Arabia and Africa chewing narcotic leaves known as Khat is a part of the tradition. Ancient Egyptians called it divine food. Betel nut is an alkaloid that gives a chemical high when chewed and is famously consumed in every household in South Asia in the form of paan. In tribes, shamans have used chemicals to transport themselves to the world of spirits. Alcohol is served to Kala-Bhairav and other fierce deities. Wine is a sacrament in Christianity.

In modern times, most of these have been deemed as substance abuse agents and are banned in different capacities in different parts of the world. We want to create a world where no one takes any chemical stimulant. We want to force people to be good. And so now, people who smoke cigarettes which contain tobacco, have to stand outside buildings and smoke like criminals. Tobacco is deemed evil because it causes cancer. Even fatty and starchy food are being slowly treated as evil as they also cause disease. The worst sin of the 21st century is to eat a high-calorie meal.

This use of law to control human behavior did not exist in ancient times. There was a tendency to trust the human will, human intelligence and the human ability to self-regulate. Modern society seems to have lost faith in human beings. Modern society does not want to allow humans to take responsibility for their own lives. It therefore uses laws to control human behavior, domesticate them into perfection. Invariably it fails. Prohibition simply spawns a booming black market. And I realize this when I hear — much to my disquiet — well-educated and affluent boys and girls describing how they snort lines of cocaine in the toilet cubicles and how it makes them feel ‘cool and dangerous’.

This article was first published at https://devdutt.com/. Republished with the author’s permission.

Devdutt Pattanaik is a medical professional by training and writes on relevance of mythology in modern times. He has authored 41 books and over a 1000 columns and has also appeared on television.

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When the World is No Longer a Stage: The Music Industry in a Socially Distanced World

By Nirvik Thapa

For the first time ever, the MTV Video Music Awards were held this year without an audience present. With the coronavirus pandemic and physical distancing mandates, the event was filmed in various outdoor venues and was later streamed worldwide. Live music and events, two of the most profitable revenue streams in music, have had to recalibrate as the world adjusts to the ‘new normal’. As WHO declared Covid-19 a pandemic, major artists started postponing their world tours. Popular music festivals world over like Coachella in the US and Reading and Leeds in the UK were cancelled for the year. Despite such limitations, several attempts have been made to shift live experiences to online platforms and have prompted major changes in the world of music. 

With the moribund state of live music— an essential tool for an artists’ marketing and revenue— the disconnect between fans and artists has never before necessitated such a novel response. efficient engagement and captivating content are key things for an artists’ success. Without physical contact, the only way these can be pursued is online and almost all entertainers are now performing from their homes. However, the experience is not the same. The ambience of a concert venue; bustling crowds, rapturous cheering and constant movement are virtually unreplicable. All of this fosters a collective experience: a rapport among the audience captured by the performance. 

With all such experiences having become a thing of the past, record labels can no longer bank on the live experience economy they have been cultivating for decades. But fan demand for such experience still persists. So the collective experience has taken a new form in the digital world through social media platforms.

This digital recourse has allowed newer opportunities for both artists and fans to interact in place of their physical interactions

For her latest album, created entirely in quarantine, popstar Charli XCX enlisted the help of her fans, asking for suggestions through her Instagram Live sessions and zoom calls. Through these, she kept updating fans on what she was up to daily. She would share if she had written a new song, had photos taken for the cover art by her boyfriend, recorded vocals or received new beats from her producers. Fans would be ecstatic listening to a new snippet. “Should I include this one?” she’d ask. The chat would overflow with heart emojis and incessant praises which the artist would use to gague which tracks received the best engagement. The album, how i’m feeling now, was publicized as a fan-artist collaboration and was released to great critical reception, eventually being shortlisted for the Mercury Prize. 

In another instance, rock legend Jon Bon Jovi surprised an online kindergarten class (and parents who were understandably more excited) by popping in and serenading them with songs about quarantine. 

Bon Jovi’s and Charli XCX’s interaction with fans show how the new online status quo has ushered new scopes for celebrity-fan interactions. While face to face interactions were previously limited to costly meet & greets, the pandemic has allowed celebrities greater leeway to cheer fans up. 

With opportunities to be continually involved, avid fans can build a connection with an artist’s lives through their accounts. Artists are also looking for ways to keep connecting with fans. In this sense, keeping up with an entertainer isn’t too arduous for fans as they receive updates instantly. With lockdown, artists are showcasing themselves doing activities they might not have documented before. There has been a conspicuous change in Hozier’s Instagram page since late March. Previously filled with pictures of the singer performing in front of huge crowds, his latest posts are videos of him reciting poetry from home. Each video has several thousand comments from fans saying how happy it makes them. 

The music industry was already reimagining itself with digitization. During the pandemic, these changes became more palpable. The song Old Town Road by rapper Lil Nas X first gained traction on TikTok, the popular video sharing service. A remix featuring Billy Ray Cyrus helped make the song a worldwide hit. In the US, Old Town Road reigned the Billboard Hot 100 chart for 19 weeks, breaking a 23 year old record for most weeks at No.1. 

Over the summer, rapper Curtis Waters’ became famous on the app with his track Stunnin’. Legions of TikTok users danced to it following Waters’ own video featuring simple, easy-to-follow dance moves. Creators used this song to make clips of themselves dressing up as characters from popular TV shows. The trend caught on internationally with the song being certified gold in Canada. In the US, it has peaked at no.11 in the Bubbling Under Hot 100 chart so far. This signals a change in how stars are launched today. Big labels are no longer a prerequisite for an artist’s success. Rolling Stone reported how the rise of Stunnin’ is “a threat to the major label system.” 

With studies showing that Gen Z has been consuming more online video content during the global lockdown, the success of new artists through digital platforms like TikTok seems very plausible. This also brings a new generation of content consumers, different from others based on their digital habits, parlance and the common keenness with which they follow pop culture. 

According to media scholar John Fiske, being cognizant of such information is fundamental to the accumulation of fans’ cultural capital. Knowing particulars about an artist and interacting online about it builds virtual rapport between fans. This is evident if you look at ardent fan groups on the internet. Not only do they discuss and speculate about artists’ upcoming projects and personal lives, they also contribute to supporting an artist’s work, from making it trend on Twitter to creating fake Starbucks’ promotions that get more streams for songs. Korean boy band BTS’ VMA performance – filmed with green screens in South Korea – remains the most streamed performance from the event. Post the VMAs, it continued its chart topping streak in the US.  

Since it doesn’t seem like live music will be resuscitated anytime soon, online support is pivotal for the music industry. Newer fan bases are born as unknown artists become popular. What ensues is an active community with great potential to rope in more fans. The absence of live performances is economically debilitating to the global industry. However, through alternate technological mediums, stakeholders in music have tried achieving online what live music provided. The convergence of music, social media and formats like virtual reality for gigs allows for transposition of the relatedness observed between audience members in a concert. It shows how the pandemic has been a catalyst for digital synergies that have changed the music business. With the end of the pandemic nowhere in sight, this online substitute for live venue camaraderie will probably sustain for a very long time. And the consumption changes the pandemic has induced — probably even long after the pandemic is over.  

Nirvik Thapa is a student of Sociology/Anthropology, Media Studies and International Relations at Ashoka University. Some of his other interests include music, pop culture and urbanism.

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What do stock market fluctuations in 2020 tell us about human behaviour?

By Srijita Ghosh

If I ask you what’s common between choosing the wrong major and not being able to lose the last 5 kgs that you thought you’d lose by summer, most of you would think there isn’t one. But if I ask you the same question for the stock market behaviour during the dot com bubble (most of you were probably not even born by then) and the same stock market behaviour during the recent pandemic, you can probably name a few. However, the common thread amongst all of them is that they are all driven by incorrect beliefs about future events. 

You were so sure that economics was the right major for you, but at the end of the second year, you realize you have gravely underestimated the technical skills required to finish it and now you wish you had chosen something else. It is natural and quite common to have a wrong belief or estimate about a future event since future events are fundamentally uncertain. 

Economists have been aware of incorrect beliefs and their impact on decision making but modelling them formally has started fairly recently. Taking motivation from psychology and neuroscience, economists have started modelling decision-making under the assumption that the agents are cognitively constrained. They can make mistakes while predicting some uncertain events about the future which can have severe consequences on their life and living. 

It’s the same cognitive constraints that drive the seemingly irrational behaviour in the stock market. But the mistakes that people make in the stock market or most economic context are not random. By studying the patterns of mistakes, we can design effective policies to improve welfare. 

In the context of the stock market, recent studies by Bordalo et al (2020) have found that people overreact to good news and overvalue them in the long run. If we overestimate the long-run valuation of stocks, then eventually we will be disappointed since our predicted value will not be materialized. This can lead to perverse behaviour in the market.

For example, during the current pandemic, the stock market remained more optimistic than what would be expected from the condition of the economy per se. It might be driven by the overestimation of the long-run fundamentals of the stock market. The problem, however, is that the pandemic initiates a “regime change”, which means we cannot be sure where the fundamentals of the stocks would lie in the post-pandemic period.

Another cognitive function that severely affects our belief is that of memory. Various puzzles in the stock market can be related to the nature of memory. There are different features of the memory that affect what we believe. The most obvious one would be the temporal nature of memory; we remember things with more clarity that have happened in the recent past than a distant past. This implies that while forming belief we put more weight on the recent phenomenon that is the underlying trend. This can lead to having an overreaction to bad news. 

The other, more complex feature of memory is representativeness, which implies that different cues about the same underlying object can lead to very different beliefs depending on what comes to mind. In a recent study by Wachter and Kahana (2020) has shown that we often associate two events that are temporally related. If one of these events repeats again we remember both the events, as they are contextually related events. This can lead to further distortion in belief and some examples of such behaviour would be under or over-reaction to news, fear being a leading motivator of financial decision-making, and so on. 

However, we should note that this literature is fairly young and researchers all over the world are trying to understand the impact of cognitive functions on beliefs and subsequently on decision-making. So we should proceed with caution when interpreting the results from the early experiments. Just like any other scientific discipline, we can only conclusively make remarks after several studies have reproduced similar results. 

One major problem here is that human behaviour is complex and when combined with the stock market framework the scope of non-standard (from a neoclassical economics perspective) is large. This makes analyzing and predicting behaviour in the stock market particularly difficult. But one way forward would be to understand how humans form beliefs generally and extend that to the stock market scenario. This will also help us become better decision-makers and be more consistent with our own world-view. 

Srijita Ghosh is an Assistant Professor of Economics at Ashoka University and has done her Ph.D at New York University.

Sources:

Expectations of Fundamentals and Stock Market Puzzles by Pedro Bordalo, Nicola Gennaioli, Rafael La Porta, and Andrei Shleifer (2020)

Memory and Representativeness by Bordalo, Pedro, Katherine Coffman, Nicola Gennaioli, Frederik Schwerter, and Andrei Shleifer. 2020

 A Retrieved-Context Theory of Financial Decisions by Jessica A. Wachter and Michael J. Kahana

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My Son’s Inheritance: India’s Invisible Violence

By Aparna Vaidik

Published by Association for Asian Studies on Thursday, August 27 2020.

Mahatma Gandhi and the philosophy of non-violence are facets of Indian history that have inspired generations of world leaders from Steve Biko and Nelson Mandela to Martin Luther King Jr. Also perpetuating this image of India as a land of non-violence and tolerance are some other facets of India’s history such as the conversion of the ancient Emperor Ashoka Maurya to Buddhism; his adoption of non-violence as a state policy in 3rd century B.C.; and the existence of a composite culture known as the “Ganga-Jamni sanskriti” (the comingling of waters of rivers Ganga and Yamuna), a referent to the peaceful Hindu and Muslim cultural intermixing in the Subcontinent. Indian public intellectuals from Amartya Sen to Shashi Tharoor have invoked these elements of India’s historical past to debunk majoritarianism, to decry communal conflict, and to critique right-wing political agendas.

Violence, if at all examined, is primarily done through the Weberian lens by studying state actions such as battles, wars, or political retribution. Other than that, it is the episodes of communitarian riots, gender violence, and subaltern resistance that are scrutinized. Seeing violence as episodic phenomenon, on the one hand, pathologizes it as an aberration or turns it into an exception in need of an explanation; and, on the other, reinforces the presumption that Indian society is fundamentally peaceful, non-violent, and tolerant. My Son’s Inheritance: A Secret History of Lynching and Blood Justice in India challenges this munificent image of India to show that the ubiquity of violence has rendered it banal and thereby historically invisible. It asks, how is the violence not visible? Why is it invisibilised? How does it turn into a secret? What allows the unconscious denial of the existence of violence? Who are the recipients and witnesses of this violence? Finally, what is this violence?

My Son’s Inheritance traverses several centuries and explores the history of Vaishnavism and warrior cults in northern India; the history of Arya Samaj, a nineteenth-century reformist organization; the role of a violent cow-protection movement in forging the Hindu majoritarian identity; and the myths of Hinduism that invisibilised the oppression of the lower castes in the Subcontinent. It uses pamphlets, popular publications, prints, poetry, and myths, as well as my own family history, to offer a cultural reading of violence. The book demonstrates how violence is secretly embedded in our myths, folklore, poetry, literature, and language, and is therefore invisible. Framing my narrative as a message to my son, I acquaint him with his ancestors—those who abet and carry out lynching as well as those who are lynched. In this way, the “son,” a metaphor, embodies both the violator and the violated, much like the country in which he will come of age. The book lays bare the heritage of violence bequeathed from generation to generation and disabuses us of the myth that holds nonviolence and tolerance as being the essence of Indian culture.

The book argues that perpetrators of this violence have not always been the state, the rulers, the police, or the army, but the ordinary Indian who thinks of India and Hinduism, the majoritarian religion of the Subcontinent, as tolerant, spiritual, and non-violent. This person is often the silent witness or a bystander to whom the violence in Indian society remains invisible. In doing so, the book addresses the “banality of evil,” a phrase coined by philosopher Hannah Arendt. She argues it was not just the big generals and the Nazi party officers who were responsible for the Jewish holocaust, or Shoah, but also the normal, ordinary, everyday people who went about their everyday lives, did their jobs and obeyed the laws. It is easier to understand the mind of thinkers and ideologues but, as Arendt shows, it is immensely hard to fathom the mind of an ordinary person. Carlo Ginzberg has attempted this in The Cheese and the Worms: The Cosmos of a Sixteenth-Century Miller, which seeks to understand an ordinary miller’s notions of how the cosmos came into being. In a similar vein, My Son’s Inheritance examines an ordinary law-abiding Indian’s mentality that either denies the existence of violence or sees it as something that foreigners or wrongdoers indulge in.

The inheritance of this violence, the book demonstrates, comes to us in a form of a secret, a secret that is hidden in plain sight. It is visible and yet we don’t see it. Once the secret is unveiled the question of atonement or redemption comes up: How do we redeem ourselves? How do we atone? According to My Son’s Inheritance, atonement lies in Indians owning up to their history of violence. The choice is to either hide one’s shame and generate even more violence, or to own up to one’s historical shame and break the silence around violence. For it is our silence borne out of privilege that perpetuates violence.

This is a crossover book written as creative non-fiction. A nagging worry as I embarked on this project regarded crafting the narrative. After writing years of staid academic prose, I felt unsure about transitioning into a more conversational narrative style. Surprisingly, it was much easier than I had imagined. Ta-Nehisi Coates’ Between the World and Me, Nadine Gordimer’s My Son’s Story, W.E.B. Du Bois’s The Souls of Black Folk, and James Baldwin’s A Letter to My Nephew served as narrative inspiration. Choosing a creative narrative strategy also required me to make “travel-style” field trips, first to my hometown, Indore in Central India and, second, to the ancestral shrine in the small town in Rajasthan. The histories of both places are woven into the book’s narrative. I was now seeing them with the eyes of a writer.

As I started conceptualizing this project, the question for me was how do I tell stories of violence? How do I narrate stories of conflict in a non-conflictual manner? How do I not fill the hearts of the audience with hate in talking about hate? How do I persuade people to pause and examine their own complicity in perpetuating structures of violence? These questions were also arising from the loss of my belief in the persuasive power of the historical mode of narration. For a while I had felt that we needed to tell historical narratives differently, ones that were more accessible to the public. This book is an acknowledgement of the fact that we as social scientists and humanists are accountable to not only one’s peers and the institutions we serve but also to the society and the times we live in.

This article was first written for https://www.asianstudies.org/. The author has commissioned it for use by OpenAxis.

Aparna Vaidik is a decorated academic and an Assistant Professor of History at Ashoka University (India). Here she writes about her new book My Son’s Inheritance: A Secret History of Lynching and Blood Justice in India (Aleph, 2020).

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Should India’s environment laws give the State so much power?

By Mansi Ranka

The Union Ministry of Environment, Forest and Climate Change (MOEFCC) rolled out the draft Environmental Impact Assessment (EIA) notification in March 2020 and introduced changes to environmental governance for the country. These changes focus on making environmental clearance a swift and easy process while giving public consultation a backseat.

The draft has led to widespread public concern. About 100 environmental groups and individuals have opposed draft EIA 2020, calling it anti-environment and anti-people. One of the main causes for distress in the new draft is an exemption from prior environmental clearance to about 40 different industries like clay and sand extraction, solar thermal power plants and common effluent treatment plants. This ex post facto environmental clearance puts aside the primary goal of environmental protection to focus on achieving ease of business. In April, the Supreme Court held that such practice would be detrimental to the environment and that development must be approached through an “ecologically rational outlook”.

The other main cause of concern is the dilution of public consultation. The new draft exempts projects from the public hearing, an important opportunity for local communities to learn about the project and demand social obligations from them. This gives the corporations power to officially evade local development needs, which were anyway rarely met. environmentalists have accused the government of using EIA to expand their own political control by favouring corporations by legitimising environmentally degrading projects.

The new EIA draft incorporates systemic weakness into the law, making environmental violations the norm for corporations. The Ministry does not even pretend to see EIA as anything more than a bureaucratic instrument to make environmental clearance (EC) easier. 

Environmentalists have been arguing for the need to strengthen environmental law more than ever, as we are already experiencing climate change in the havoc wreaked by floods nationwide. The letter sent to the MOEFCC also proposes that we go back to the EIA 2006 notification. But in reality, that is not all that better either.

The MOEFCC is currently reviewing the public comments that they have received on the draft. Right now, it is important to think about what it is that will really help strengthen the environmental law in our country. How can the law ensure that big corporate profit does not override people’s welfare and environmental protection?

The state controls the distribution of state-owned natural resources. What is the safeguard against the exploitation of this power? What if the government allocates natural resources in a way that contradicts public welfare?

A similar question was brought up before the Supreme Court, in the 2011 public interest litigation after the 2G scam. The PIL raised questions about the State’s ownership of natural resources and their fair distribution. The judgement clarified the Supreme Court’s position on who distributes natural resources by saying, “Natural resources belong to the people but the State legally owns them on behalf of its people and …  is empowered to distribute natural resources.” So, the State has the power to decide what happens to natural resources. But on what basis does the state decide? The judgement goes on to say, “while distributing natural resources, the State is bound to act in consonance with the principles of equality and public trust and ensure that no action is taken which may be detrimental to the public interest.”

Thus, as long as we trust the Indian State to “act in consonance with the principles of equality and public trust”, we can be certain that it will distribute natural resources for the “common good”. The judgement concludes that the State should be the trustee or guardian of the people in general, and hence be responsible for natural assets.

Trusteeship is a Gandhian socio-economic idea, which holds that wealthy people should be the trustees and ensure the general welfare of the poor people. The theory relies on Gandhi’s conviction that capitalists aren’t beyond redemption and the wealthy could be persuaded to help the poor by becoming more egalitarian.

Now, the Indian State is supposed to act as this trustee and ensure common good. How does the state define this ‘common good’? Historically, the state has not acted in ways that can foster this kind of trust. The state has often wished to ascertain huge profits through corporations by allowing them to monopolise. This is obvious in the draft EIA 2020. The “common” good then becomes economic development by few big players. This is excluding the very people it was supposed to act as trustee for. And yet, the State can claim to handover natural resources for exploitation to a few players in the name of common good and public trust.

Furthermore, the draft EIA is pushing for people to be excluded from participating in this process, making the idea of common good paternalistic. The tilting of the scale to give the trustee unchecked power is possible under this idea of trusteeship. This is because in Gandhi’s theory it heavily relies on subjective goodness in the capitalist, the trustee, to act for general welfare. It is necessary to question this of trusteeship. Can the state function as a true trustee without mechanisms to ensure accountability and transparency?

Mansi is a student of philosophy and environmental studies at Ashoka University. Her other interests include performing arts, politics and octopuses.

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Targeted ads: Is there an ethical, economically-viable alternative?

By Samyukta Prabhu

Online platforms like Facebook and Instagram have been widely discussed for reasons ranging from increased user data collection to rising misinformation and election manipulation. At the same time, rising internet penetration globally has improved access to information and opportunities like never before. While assessing the current state of the internet, therefore, there is an urgent need to address its limitations, while ensuring that its strengths are not curtailed.

One way to do so is to address the common thread that ties together the above-mentioned pitfalls of online platforms – targeted advertising. However, the contention surrounding targeted advertising is that it is the primary business model of such platforms, thus being viewed as a necessary evil.

To better understand the nuances of this issue, it is helpful to explore how the business model of targeted ads works. This can help us assess the ramifications of potential regulations to the model – both economically as well as ethically. 

As explained in a report by the United States’ Federal Trade Commission (FTC), the basic model of targeted advertising involves three players – consumers, websites and firms. Websites provide consumers with ‘free’ online services (news articles, search features) into which targeted ads are embedded. Firms pay the websites (through ad networks) for publishing their ads, and specify the attributes of their target audience. To target these ads, websites use consumers’ personal data (browsing habits, purchase history, demographic data, behavioural patterns) and provide analysed metrics to firms; this is used to improve the precision of future targeted ads. Firms are incentivised to improve targeting of their ads since they earn money when users buy the advertised products. This model improves over time, with increased user engagement, since the algorithms running the websites analyse collected data contemporaneously to optimise users’ news feeds. It thus follows that lax data privacy laws and user behavioural manipulation (to increase user engagement) greatly supplement the business model of targeted ads. Phenomena such as engaging with and spreading controversial content, as well as rewarding the highest paying ad firm with millions of users’ attention, are then some of the obvious consequences of such a business model.

Over recent years, a few governments and regulatory bodies have taken select measures to address some concerns stemming from the targeted ad model. However, there often seem to be gaps in these regulations that are easily exploitable. For instance, the European Union’s General Data Protection Regulation (GDPR), a data protection and privacy law for the EU region, prohibits processing personal data of users without their consent, unless explicitly permitted by the law. However, loopholes in Member States’ laws, such as the Spanish law, for instance, allows political parties to obtain and analyse user data from publicly available sources. In 2016, a ProPublica report found that Facebook allowed advertisers to exclude people from viewing housing ads, based on factors such as race. Facebook’s response to remedy the situation was to limit targeting categories for advertisers offering housing, employment and credit opportunities, and barring advertisers from using metrics such as zip codes (proxy for race) as targeting filters. However, this is a temporary fix for a larger structural problem as there exist multiple proxies for race and gender that can be used for targeting. We thus see that despite efforts to target specific concerns (such as data processing, or algorithmic accountability) of online platforms, there exist legal loopholes that allow tech firms to override these regulations. Moreover, with rising billion-dollar revenues and tech innovations that far outpace legal reforms, there is increasing incentive for Big Tech firms to exploit targeted ad systems and maximise profits before the law finally catches up. 

As we can see, niche regulations to the targeted ad system are thus unlikely to adequately address the rising concerns of online platforms. That leads us to a seemingly radical alternative: abandoning the targeted ad system altogether, and exploring other models of online advertising. Such models would neutralise incentives for firms to collect and analyse user data since revenues would no longer be dependent on them. The FTC’s report suggests two such models: first, an “ad-supported business model without targeted ads” – similar to the advertising model in newspapers. Websites would use macro-level indicators to target broad audiences, but would not collect user data for micro-targeting or behavioural manipulation. Second, a “payment-supported business model without ads” – similar to Netflix, which charges the user with a subscription fee. Some platforms (such as Spotify) currently work on a mixture of the two models – free to use with generic ads, or subscription-based without ads. The potential economic shortcomings for such a model include “increased search cost” for firms to find potential buyers of their product, and “decreased match quality” for consumers who might see unwanted generic ads. However, this model has been successful for several music streaming and OTT platforms (including Spotify, Netflix) and ensures useful, customised services without the associated perils of targeted advertising. 

There exist a few other measures that continue to work within the purview of the targeted ad system, but use established regulatory frameworks to skew incentives of data collection and processing. One such measure that gained traction since Lina Khan’s seminal essay in 2017, Amazon’s Antitrust Paradox, is for anti-monopoly regulations as well as public utility regulations to be applied to Big Tech firms. Since these platforms effectively capture the majority of the market share for their respective products, they could be subject to anti-monopoly regulations including breaking up of the firm and separation of subsequent divisions, to prevent data collection and processing across platforms (for instance, separating Facebook from its acquired platforms Instagram and WhatsApp.) A more direct measure to limit data collection is to subject tech firms to data taxes. Another measure, that of public utility regulations, has been in play throughout history to limit the harms of private control over shared public infrastructure, including electricity and water. They stipulate “fair treatment, common carriage, and non-discrimination as well as limits on extractive pricing and constraints on utility business models.” Since the internet (and its ‘synonymous’ platforms like Google and Facebook) is an essential resource in the 21st century, being a principal source of information for the public, it can be argued that it is a public utility, thus requiring it to be subject to the appropriate regulations. With the current state of the internet requiring user surveillance and behavioural manipulation, it easily violates the fundamental public utility regulation of “fair treatment”. Making a case for these online platforms to be public utilities ensures that they do not exploit the technological shortcomings of the law, and ensures fairer access for its users. 

In today’s world, where the internet is intertwined with most parts of one’s life, including politics, entertainment, education and work, it is of utmost importance that its online platforms be recognised as a public resource for all, rather than a quid pro quo for surveillance and behavioural manipulation. An essential part of achieving this recognition is to adequately address the harms of the targeted ad system, in an ethical and economically efficient manner.

Samyukta is a student of Economics, Finance and Media Studies at Ashoka University. In her free time, she enjoys discovering interesting long-form reads and exploring new board games.

We publish all articles under a Creative Commons Attribution-Noderivatives license. This means any news organisation, blog, website, newspaper or newsletter can republish our pieces for free, provided they attribute the original source (OpenAxis).