Is this Prosperity for Real?

By Pritish Nandy

Despite the economic downturn there remain clear signs of growing prosperity all around us. Almost every week someone or the other walks into my office wanting to make a movie and ready to pay for it. It was like this ever since I entered this profession. But earlier, people came with a few lakhs, a script, a camera and an autograph book. Now they come with ten or twenty crores.

Most of them come from remote towns and states, where they claim to have made a neat fortune in some business they are not ready to disclose details about. Others come, having sold off some ancestral land or property. They turn up in Mumbai with big dreams of making movies and doubling or tripling their wealth. When I warn them it’s not that easy, many go away with disbelief. Most times I turn them back because they come with cash. They are surprised when I tell them that the real guys who make movies in this town do not deal in cash any more. Only hustlers do.

But what never ceases to surprise me is the amount of wealth that actually exists in India. It is possibly because once you are a few miles out of the main cities, no one really bothers about things like taxes. Life is simpler. You neither hire CAs nor do you bump into tax officers. You simply do your business and get ahead with life. I seriously doubt how many of the rich guys out there actually bank their wealth. They put their profits back into land and property or gold and, now, increasingly into fancy SUVs and a lifestyle that they see in television serials and movies. That’s what defines their ambitions.

But yes, prosperity exists in certain pockets and it’s clearly growing. Much of this prosperity comes from two things: Inflation and the selling of family assets that the young generation is no longer keen to hold. So the wealth you see is not actually created, as all real wealth ought to be. It is wealth that is generated from the falling value of the rupee and the rising cost of land and property. It is, in that sense, illusory. For the amount of money you get from selling a family asset once acquired in thousands and now being sold in crores is not really all that much as it may appear. The crores you now get have the same purchasing power as the few thousands that were once paid to acquire that very asset. It is the value of the rupee that has fallen. So these crores will not fetch you much more than what those thousands could have fetched your grandfather. And those who sell those assets ultimately find them irreplaceable and the huge pile of cash they get is blown up quicker than they imagine, on a trashy lifestyle that they think will upgrade the quality of their life. It never does. But you realise that only after the money disappears.

That is the danger with unearned wealth. It disappears as swiftly as it comes. And because you never made the effort to acquire the skills required to earn that money, you are unlikely to know how and where to spend it in a way that can actually enhance the magic of your life. That leaves you worse off than where you began. At least you had the assets then. Now you are left with nothing.

I see this happening all around me. Suddenly people become rich and then equally suddenly, they become poor again. In between there’s a lot of selling and buying and selling that takes place but seldom the creation of any real wealth. It’s always land, property, gold, and family heirlooms that have appreciated in value over the years. When you sell them, you sell your past without acquiring a real future. People who talked in thousands begin to talk in lakhs and people who talked in lakhs now talk in crores. But they are talking about the same things. It is just that some extra zeroes have been added to the numbers and no one quite knows why.

But one thing is certain: When old assets become central to the idea of creating wealth, it means we have lost our skills in knowing how to build new ones. All we are relying on is inflation, and inflation just grows the numbers but never gives you anything more in real terms. Certainly not a better life.