Disclaimer: This article is not aimed at downgrading either economists or astrologers.
But hey, I really want to know the importance and effects (or rather side effects) of economic astrologers. Who are these people and what are they trying to do? An Indian court has recently ruled that astrology is a credible science. But what about 'economic astrology'? To explain further, this weird topic, I want to give some examples. When people with a lot of economic wisdom boldly give figures of economic significance such as GDP or inflation, poverty etc., we tend to take them quite seriously, at least the stock markets do. So one day the headlines read, for example, inflation will come down and the GDP will grow by xyz% by such and such date and the markets say 'God Bless' and shoot up. And then a few days or weeks later the same 'economic astrologers' say, no the estimated figures are now different and the stock markets say 'Oh Dear' and sing 'we all fall down'!
So what is the point of announcing 'estimates' that keep changing all the time? Do they really help consumers and producers of goods and services? Or do they simply create cycles of false hopes, panic attacks, misguided business/policy decisions and even affect people's hard-earned and invested money?
There is another area which I find hard to understand, that of presenting high profile reports using outdated data. A case in point is a December 2010 'new' report from the Water and Sanitation Programme of the World Bank that claimed that inadequate sanitation cost India about 6.4% of its GDP or the equivalent of $53.8 billion (R2.4 trillion as of today) in 2006 with a similar magnitude of losses likely to occur in later years. Now this figure seems mind-boggling, but two facts will make it feel like a drizzle rather than a thunderstorm. First, the report gives figures for 2006, which means a gap of perhaps four or more years from the present scenario. Second, according to the rural development ministry, due to the efforts of the international year of sanitation 2008 and beyond, and with the implementation of the Total Sanitation Campaign, the rural sanitation coverage, as reported by the states was about 67% in December 2010 (as against coverage of 31% in 2008 as mentioned in another World Bank report in March 2010). So how much credibility would such reports hold if they do not reflect what is happening today or give indications of the future?
Having spent years studying economics myself, one thing I have learnt is that economists do a great job in analysing what has happened, but when it comes to what is happening or will happen, this is a science or art that still needs to be mastered. Probably, then we can have some genuine 'economic astrologers' who could accurately predict current and future scenarios and give us remedies in advance to maximise the benefits or minimise the losses, perhaps through some 'economic' pujas (read paid consultancy services) to please the heavenly lords of economics.