Author: Beyond Assumptions

Over 100 years and thousands of films, the journey of Hindi Cinema across the celluloid from “Raja Harishchandra” in 1913 to “Chhapaak” in 2020 has been a roller coaster of drama, emotions, comedy, horror, adventure and the list goes on to feature all genres that have ever existed. The Hindi Cinema that we all know as Bollywood has transformed into a multimillion dollar industry. 

From swaying to music and dancing to songs, memorizing the dialogues to living in the scenes, it has emerged as a major influence on the society in terms of trends, ideas and notions. 

Even more so, this industry has been contributing to the nation’s GDP for long. Bollywood scales to account for around 1 percent of the nation’s GDP. Now this may not sound very significant, but the contribution is significant enough to make the sector larger than India’s consumer durables and online retail industries. 

If we see it from an economic perspective, Bollywood is a mixed economy with both the government and the private sectors having a certain control over it. The market demand of the industry is not confined to the Indian subcontinent and extends across boundaries, thus creating the need for dubbing into different languages. The benchmark for a film’s success is now defined by its ability to reach the 100 crores benchmark rather than its struggle of surviving on the screen.

The enthusiasm amongst the audiences in India is reflected in the fact that every Friday, with a new movie’s release, around 20 million people go to the movies and spend what accounts to an average Indian’s daily wage.

If we compare Bollywood against Hollywood, the industry beats Hollywood in terms of cinema ticket sales and releases but falls back in terms of revenue generation. For instance, in 2018, Bollywood released 1800 films while Hollywood laid back with just 500 films. But, if we are talking numbers, essentially, talking money seems more relevant. While Bollywood and its content is still evolving in a nascent phase of progressiveness and creativity, it has been quite a while since Hollywood began to venture into the same. 

Even more so, the budget of a typical movie also relies on its genre. While a movie like “Bahubali” may have an enormous budget of up to 180 crores,  another movie like “Badhai Ho” may wind up with a budget of only around 30 crores. This is owing to the enormous amount of technicalities that go into making a film. At the surface level, bollywood is primarily associated with actors and directors, but it is much beyond that. 

Movies add to the creation of jobs directly as well as indirectly. In the form of technicians working on special effects to body doubles playing roles, all this further add to the economics behind the industry’s existence and success.

All this said, it can easily be concluded that the entertainment industry is one of the highest earning sectors in the country. Besides the social and cultural impact imprinted onto the minds of cinema enthusiasts, Bollywood has travelled across time and ages to contribute a whopping sum to India’s GDP.

Sources:

The Economics Behind Bollywood

https://www.youthkiawaaz.com/2017/01/films-and-economics/amp/

-Laisha Gambhir

Farmers in India take recourse to debt, both from formal and informal sources, not only to meet their investment needs but also to smoothen consumption in the face of adverse income shocks. At very high levels of debt, apart from the inability to repay it, the loss of creditworthiness no longer acts as a deterrent for non-repayment of loans, particularly those acquired through formal channels. Debt relief /waiver schemes are, therefore, used by governments as a quick means to extricate farmers from their indebtedness, helping to restore their capacity to invest and produce.

On the borrower’s side, while debt relief helps to reduce the overall household debt, there appears to be differential impact on distressed beneficiaries who benefit significantly from it when compared to non-distressed beneficiaries whose loan performance worsens after the waiver. Although agricultural debt waivers aim to increase investment and productivity of beneficiary households, waiver impact on beneficiary farmers’ consumption and savings indicates that while the level and pattern of consumption remained unaffected, there was a rise in precautionary savings, likely due to anticipation of higher credit constraints in the post-waiver period. Borrowers’ expectation of repeated bailouts by the government may vitiate credit culture among farmers and may further constrict farm lending.

On the credit supply side, post-waiver lending slows down in districts where the exposure to waivers are high, as banks shift credit to observably less risky regions. While this indicates improvement in efficiency of credit allocation post-waiver, on the flip side, restricted lending to backward districts can widen regional disparities. Difficulties in obtaining formal credit post-waiver can force farmers to factor in future credit constraints and hence shift to informal sources of credit. Consequently, loan waivers can have a dampening impact on lending by rural credit institutions.

Therefore, a holistic approach to address the difficulties faced by the farmers must include wider coverage of crop insurance, simplified insurance procedures, reduction in the reliance on informal sources of credit, diversification of crops, technological advancements and increased farmers’ direct access to agricultural markets. Together with these measures, steps to strengthen agricultural extension services and promotion of greater awareness among farmers about their entitlements under various central and state government schemes would fortify the agrarian economy.

Sources:

Click to access BorrowingBehaviorAT.pdf

https://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=3617

-Kimpreet Kaur Walia

Solar energy is actually nothing new unlike petroleum which was successfully drilled by Colonel Edwin Drake in Titusville, Pennsylvania in 1859, when only a few had any idea of how petroleum would change the world. People have used solar power as far back in history as the 7th century B.C. Despite petroleum being a high energy density fuel, i.e. 44MG/Kg, it has many disadvantages like environmental hazards, limited resource, also oil money can be used to fund terrorist and other criminal activities worldwide.

On the other hand, solar energy is the technology used to harness the sun’s energy and make it useable. There are two major recognized technologies that are converting solar energy into electricity — Photovoltaic (PV) and Concentrated Solar Power (CSP), sometimes called solar thermal in their current and plausible future forms. (Photovoltaic is the technology that powers solar panels for both residential and utility scale use). In the coming years, technological improvements will ensure that solar power becomes even cheaper. It could well be that by 2030, it will become the most important source of energy for electricity production in a large part of the world. There are many financial benefits related to solar power except the initial cost.

Some of the benefits are that households with the highest electricity rates from their local utilities are the ones who stand to save the most when they convert to power from the sun. Also, some studies suggest that the right size purchased solar installation may increase your home value by $20,000 or more, if you plan to sell it besides the most crucial and important point to be considered in the long run is that the sun is a renewable resource. Unlike fossil fuels, sunlight is never going away, you can count on it every day.  In a world of increased electrification, solar power is one of the most inexpensive, reliable, and cleanest ways to fuel our electrified future. So, if we put it simply, ‘Solar energy is the future Oil’.

Sources:

https://www.nationalgeographic.com/environment/global-warming/solar-power/

https://www.weforum.org/agenda/2020/01/the-future-looks-bright-for-solar-energy/

-Shrey Goyal

Zambia, a country in southern-central Africa is considered as one of the most urbanized countries of Africa. Zambia is a mining economy with decades of experience in mining related activities. The country obtains 65% of its exports from copper and cobalt mining.

It always had an active trading network for commodities like copper, ivory, rhino horns and mines, etc. During colonization Zambia was ruled by the British government which was particularly interested in the copper of the country. Numerous mines were controlled by the British government using indigenous labor force.

After independence, Zambia instituted a program of national development plans, under the direction of National Commission for Development Planning. These plans were The Transitional Development Plan (1964–66), followed by the First National Development Plan (1966–71). These two plans, which provided for major investment in infrastructure and manufacturing, were largely implemented and were generally successful. In the mid 1970s the prices of copper fell and inflation rate was high, making imports expensive and creating a situation of crisis for the economy of Zambia. As the economy did not improve for years the government decided to reduce government spending, liberalize and privatize the economy.

With the opening of FDIs, inflows increased to $334 million in 2004 mainly in copper and cobalt extraction as well as in agricultural sector. The new laws and foreign investments resulted in diversification of base and exports, contributing to skill and technology – transfer for effective utilization of resources. Zambia’s special market access opportunities are now a huge attraction of investors worldwide.

However the economy is comparatively underperforming than other developing nations. Zambia has a huge potential of increased FDIs and constant growth due to its underutilized resources including rich wilderness areas for tourism. Appropriate strategies focusing on macroeconomic factors, addressing infrastructural development and attracting more investments will lead to extreme development of the Zambian economy.

Sources:

Click to access iteipc200614_en.pdf

Click to access EconomyandGlobalizationinZambia.pdf

https://tradingeconomics.com/zambia/foreign-direct-investment

https://www.indexmundi.com/facts/zambia/foreign-direct-investment

-Sampriti Das

Of late, much has been said and heard about the Corona outbreak and its effects. The cause of this outbreak has been traced to a family of viruses called Corona viruses. 

The World Health Organization defines Corona viruses (CoV) as a large family of viruses that cause illness ranging from common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV).

Corona viruses are zoonotic, meaning that they are transmitted between animals and humans.

The socio-political conditions of Chinese families, which are very closely interlinked with each other, provide a very astute method for the virus to propagate. Furthermore, the lack of proper health care facilities to cater to such a huge outbreak of the virus has worsened the situation with more and more people being affected daily. 

With an attack rate of 60% to 80%, the virus poses a major threat to the world economy where some scientists assume that it can affect about two-thirds of the world population. 

(The attack rate is a bio statistical measure of the frequency of morbidity, or speed of spread, in an at risk population. It is used in hypothetical predictions and during actual outbreaks of disease.)

By affecting China, the virus has created a global impact.

China is one of the biggest consumers of crude oil and petroleum products. With the shutting down of factories, its demand for crude oil is anticipated to see a decline which would further result in the fall in prices of crude oil in international markets. 

Besides, the international travel economy may also take a hit. As stated by the figures of 2016, the country accounted for 21% of the world’s international tourism spending. But, with quarantine in parts of china and the fear of possible spread of corona, this number is projected to decline.

With closing of many factories temporarily, the global production is also bound to take a hit, especially in the case of automobiles and electronics. This may also lead to an increase in their prices. The pharmaceutical industry is supposedly going to observe an increase in demand and a resultant increase in prices due to the medicine requirements in China. 

Countries like India, Vietnam and Bangladesh, which present an alternative to production outsourcing in china, will also observe an increase in contracts from various MNCs. According to the analytics firm “Dun and Bradstreet” 51,000 companies have one or more direct suppliers in the impacted region. Also at least five million companies have one or more tier 2 suppliers in and around the epicenter of outbreak.

This article is an attempt to analyze the Corona outbreak from an economic perspective. While the threat continues to spread, it is bound to show impacts on the world economy.

Source:

https://www.cnn.com/2020/02/08/health/coronavirus-hospital-infections-frieden/index.html

-Yadu Krishna.

Do you freak out when your maid throws something into the trash can? Well, you would be surprised to know that economists might be intrigued by this. There is something we call as the ‘Garbage Index’ which, contrary to the useless, unhealthy garbage, is very useful in indicating the health of an economy.

The Garbage Index looks at the amount of garbage produced and draws out economic inferences from the same about a country’s GDP.  There are several things indicated such as the purchasing power of people, aggregate demand and population growth by the waste we produce.

One of the reasons due to which this index might be affected by increased garbage is the increase in purchasing power of the people. When people have less purchasing power they tend to avoid throwing away old things and purchasing new things thus creating less waste, but if they have high purchasing power, they produce more waste.

The garbage we produce also indicates our demand for a specific product and also our overall demand. In the sense that, if we demand more, we consume more and thus we produce more waste. If we love to drink coke, our garbage will comprise of more coke cans and indicate about our high demand of coke.

Another reason for increasing waste can be the rise in population. With rising population, consumption also rises and thus the garbage. This can be explained as follows: consider a rise in population given that a major part of the population is between the age of 1 month and 1 year, this means that are more infants in the population. With this the demand for diapers increases and thus the waste created by used diapers also rises, affecting the garbage index.

Therefore, an increase in garbage can simply indicate an increase in population or can indicate a much sought growth in the economy. But whatever it might be, the way we look at garbage is certainly bound to change now since waste is not a waste anymore!

Source(s):

The Garbage Index: What A Load Of Rubbish Can Tell Us About The Economy

https://www.cnbc.com/2016/11/01/the-garbage-indicator-what-trash-is-telling-us-about-the-economy-now.html

-Jyotsana Thareja

We live in a world clutched by the shackles of materialism, deeply enrooted in all the spheres of human life. We invest an entire lifetime bracing ourselves to step into the unending race of materialism and acquisition. And when it is a race, there are numbers, ranks and a plethora of jargon sprinkled in context of measurement. 

We measure GDP, standard of living, per capita income etc, to evaluate the growth and development of nations, but what happens when one tries to quantify a subjective emotion like happiness? Can happiness be measured? How can an individual’s expression of happiness be put at par with the happiness of millions of miscellaneous people across the globe?

Well, the Happiness Research Institute answers all the questions with its annual release of the World Happiness Report that ranks 156 countries of the world according to their happiness.

While Finland has retained the title of the happiest country in the world, two years in a row, India has slipped down from the 133rd position in 2018 to 140th position in 2019. 

The one constant rival of India in its neighbourhood, Pakistan, beats India by occupying the 67th rank and amongst other neighbouring countries, Srilanka stands at 133, China-93, Bhutan-95, Nepal-100. 

Various factors that determine the happiness levels of a country include life expectancy, social support, income, freedom, trust, health and generosity amongst others.

Indians consider good financial conditions and physical well-being as the top-most reasons to remain joyous.

“For Indians, it boils down to comfortable living conditions, robust health, good financial conditions, friends and social circle and to have purpose in life. Hobbies and interests are important too,” said Parijat Chakraborty, Country Service Line Leader, Public Affairs and Corporate Reputation, Ipsos India.

As India strives in sadness, the developed countries mostly witness the prevalence of happiness. In its continuous pursuit of development, India must find ways to reverse its consistent failure in happiness rankings.

Source(s):

https://worldhappiness.report/ed/2019/

https://scroll.in/latest/917386/world-happiness-report-india-drops-even-further-ranks-140-on-index-of-156-countries

-Laisha Gambhir

Nobel Prizes are given to recognize the discoveries that will confer the greatest benefit to humankind. Last year’s Economic Sciences award was given to Abhijit Banerjee, Esther Duflo and Michael Kremer ‘for their experimental approach to alleviating global poverty.’

 It helped change the deep assumptions about how individuals make decisions and about what economic development is. It changed the way many development economists work, where they work, and the kinds of people they work with.

In the last 30 years, a new field in economics, behavioral economics, emerged. A premise of behavioral economics is that the most useful model of an individual to explain aggregate economic behavior is often not the rational actor model.

And these three researchers’ work made possible large advances in real- world policies to offset individuals’ biases in ways that made their lives much better.

One of most recent economic tools used by the Nobel laureates is Randomized Controlled Trails (RCTs).

RCT is a type of scientific experiment that aims to reduce certain sources of bias when testing the effectiveness of new policies. RCTs allow economists and other social science researchers to isolate the individual impact that a certain factor alone has on the overall event. RCTs can help many governments to find, in a thoroughly scientific way, and implement the most potent economic, social and domestic policies.

But like all other things in this world, unlike utopia, there is some criticism against this economic tool which is popularly demonstrated by Mr. Angus Deaton, Nobel Laureate in Economics (2015). He argues that simply choosing samples for an RCT experiment in a random manner does not really make these samples identical in their many characteristics. Along with him, other economists says that social science research, including research in the field of development economics, may be inherently unsuited for such controlled research since it may be humanly impossible to control for multiple factors that may influence social events.

Source(s): https://www.google.com/url?sa=t&source=web&rct=j&url=https://en.m.wikipedia.org/wiki/Randomized_controlled_trial&ved=2ahUKEwjlyN219o_nAhUYOisKHcNVDIkQFjAOegQIBxAB&usg=AOvVaw06AwSEcUlwgn8JouLyryK0

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.povertyactionlab.org/news/randomized-control-trials-coming-age&ved=2ahUKEwjU5YjM9o_nAhUTfH0KHQNmDzQQFjACegQIBxAH&usg=AOvVaw2NijolkDOGAlG4l9WdniHY

-Shrey Goyal

Published in 1949, the book offers political satirist George Orwell’s nightmare-ish vision of a totalitarian, bureaucratic world where bending of truth and distortion of languages is quite prevalent. It is one of the most terrifying novels ever written since it highlights the poor and stiff attempt to attain individuality. A world in which Big Brother (or maybe the National Security Agency) is always keeping a track of everyone at every moment, be it their homes! The foreigners are feared and hated. It is a world where the government insists that reality is not “something objective, external, existing in its own right” — but rather, “whatever the Party holds to be true is truth.” The common masses follow the daily chores assigned to them. They do not question for they have no questions to ask. People make no mistakes for they have it ingrained in mind that there is no forgiveness. Everyone knows Big Brother by name but no one has ever seen him. It is a must read, for it will force a thrill down the spine and create a mountain of suspense unfolding gradually as you read. Do give it a shot and enjoy one the greatest creations by George Orwell ever.

-Nishu Agrawal