By Karan Thapar

It’s odd how a stray remark can spark off a whole train of thought. I was in office when it happened to me

“What are those little numbers at the bottom of the television screen?” It was Mummy on the phone. “They’re on all the channels and they keep changing all the time!”

It took me a while to work out what she meant. At 88 Mummy can be quite enigmatic.

“It’s the Sensex, the Bombay stock market index.”

“Well” she replied, unimpressed by her son’s talent for solving riddles. “It’s been moving up all week. Is that a good thing or bad?”

I can’t remember my answer but it wasn’t significant. However, Mummy’s casual question drew my attention to a fact I had overlooked. Despite riots in Gurgaon and floods in Bombay Sensex has soared. Since she spends her day tracking the news, Mummy noticed this before I did. But it was left to me to pick up the paradoxes that lie behind it.

For a week the news has been about Bombay under water. A thousand people have died and there are fears that India’s GDP growth might have slipped. Such a disaster in the commercial capital should have sunk the Sensex. Instead, during the eight trading days ending last wednesday, it leapt 537 points, a jump of 7.3 per cent. It’s almost as if bad news has spurred the index! I asked Gurcharan Das what he made of this. “Irrational exuberance”, he replied. I can accept irrationality but what has the Sensex to be exuberant about when Bombay is drowning?

However, it’s not just calamity in Bombay that Sensex has overlooked. Nationally there’s confusion over disinvestment and FDI, badly-needed pension and banking reforms are stalled, labour reforms are in doubt, reservations are threatened and there are serious fears the Government’s Employment Guarantee Bill could imperil the country’s finances. Additionally the Left is rampant. In itself that should have scared the stock market. Yet Sensex couldn’t care less.

But there’s more. Beyond Bombay – and beyond industry and politics – lies rural India. Here, although it’s not fully recognised, a full-blown agricultural crisis has gripped the countryside. Consider the facts : the rate of growth of agricultural production has collapsed to 1.5 per cent, which means our population is increasing faster than our production of food. At the same time the net per capita absorption of food – how much we eat – has fallen to levels just above those of the Bengal Famine. Consequently, 40 per cent of India is eating less than sub-Saharan Africa. Amartya Sen’s verdict is that India’s handling of hunger is the worst in the world.

But does Sensex care? In fact, is it even aware of this? I doubt it. On wednesday it leapt to 7843, oblivious of the fact that perhaps 300 million go to bed hungry every night. When I put this to Abhijit Sen, a member of the Planning Commission, he said Sensex has little to do with agriculture. He’s right, of course. But agriculture has a lot to do with the economy and the Sensex, if it’s rational, should be governed by the prospects of the economy. Almost 60 per cent of India depends on agriculture for its livelihood and our economy cannot flourish if they’re in despair. But try and tell that to Sensex!

In fact two facts establish how illogical Sensex can be. On May 17, 2004, three days after the elections, it collapsed 895 points in just seven hours, losing 15 per cent of its value. Fear of Congress and the Left was said to be the cause. Since then it’s risen an astonishing 3616 points or 85.5 per cent to touch 7843. Yet what have Manmohan Singh and the Left done to generate such confidence? Or, earlier, what did they do to instil such fear? Even if you take the view that a stock exchange index is a speculative gamble it doesn’t make sense to risk such huge bets. After all, the idea is to win.

No, I’m afraid Sensex seems to have become a world unto itself. Neither natural disaster or rural crisis nor politics or economics seem to affect its fortunes. It has a mind of its own and regardless of the world carries on.

Alas, I hadn’t worked this out in time to answer Mummy. If I had my response to her question “is it a good thing or bad?” would have been to say it falls into a different category. It’s senseless.