Union minister Ravi Shankar Prasad on Saturday kicked up a storm after he said three Bollywood movies generating business of Rs 120 crore on the 2 October holiday suggested that the economy was sound,
While Prasad withdrew the comment on Sunday, economist Vivek Kaul in a series of tweets pointed out why the remarks were misconceived.
In a reference to the "Rs 120 crore" comment made by Prasad, Kaul argued, "Using just absolutes without any comparison will always make absolutes look huge. But that is the wrong way of going about things."
To illustrate his point, Kaul cited the annual private consumption expenditure for 2018-19 and said, "As per Mr Prasad, Indians spent Rs 120 crore in a day to watch movies. This was on 2 October, which was the end of one long weekend and the start of another. On an average day during the year, Indians are likely to spend Rs 33,700 crore. Hence, Rs 120 crore works out to 0.36 percent of what Indians are likely to spend during 2019-20, on an given day. In fact, the percentage will be even lower when we take into account the fact (that) 2 October was a holiday....What's the big deal with this?"
A small thread coming up on this.
Normally, I would have let this go, but it's statements like these that tend to go viral because they are simplistic explanations which sound correct. https://t.co/r7Jm8UsPU5
— शिक्षित बेरोज़गार (@kaul_vivek) October 12, 2019
In August 2019, an article by Seetha on Firstpost also pointed out that private consumption growth as a share of the GDP has been declining in recent quarters. The article pointed out that private consumption was 57.7 percent of GDP in Q1 of 2019-20 against 58.7 percent in Q1 of 2018-19. It is also a steady decline from 61.2 percent in Q3 of 2018-19 and 59.3 percent in Q4. Commenting on the data, the author stated, "The anecdotal evidence of falling consumption is now borne out by macro data."
Prasad, in the aftermath of a controversy over his remarks on Saturday, put out a statement saying, "My comments made yesterday in Mumbai about 3 films making Rs 120 crore in a single day — the highest ever — was a factually correct statement. I had stated this as I was in Mumbai, the film capital of India. We are very proud of our film industry which provides employment to lakhs of people and contributes significantly by way of taxes. I had also explained in detail about various measures the government has taken as a pro-people move to strengthen our economy. Government of Prime Minister Narendra Modi always cares for the sensitivity of common people. Entire video of my media interaction is available on my social media. Yet, I regret to note that one part of my statement has been completely twisted out of context. Being a sensitive person, I withdraw this comment."
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Updated Date: Oct 13, 2019 17:29:45 IST