SENSEX: Indicating or Misguiding?

The term “Sensex” is not as sensational as it seems. It is in fact a mundane reference to The Bombay Stock Exchange Sensitive Index. The Sensex is the benchmark for the Indian Stock exchange, which captures the price movement. Theoretically, the rising Sensex is an indicator of economic growth and is considered good for the market. However there are various factors affecting the rise and fall of the Sensex.

Lately, it has been seen that in the 21st century, more specifically, the last two years, the Sensex has seen an intriguing rise well above the 10000 mark, with the soaring graphs reaching the 12000 mark in February 2006 only to be dethroned by the mind boggling 15000 units it touched in July 2007.

Here, an important question arises. Is the Sensex really an indicator of the sustainable economic growth? Is our country really treading on the path of unbelievable heights? Or is it just a superficial belief with the rich getting richer and the poor poorer?

It has been seen in the past few years that the Sensex has become immune to the hurricanes Katrina and Rita, which hit the US sending oil prices soaring. Nor were the soaring indices bothered by the Mumbai floods, which hit the city and brought it to a standstill for several days. Thus we need to pause for a while and ask the investors, the Government and all those basking in the glory of the rising bulls, whether the Sensex is really an efficient way of measuring the economic growth?

All of us are aware of the fact that thousands of farmers in India commit suicide every year because of acute financial crisis and lack of a fixed income. It is not a hidden fact that 23% of our population lives much below the poverty line. Also the advent of the SEZ’s in various areas may have set the Sensex soaring, but it does not reflect the thousands of villagers who are rendered homeless and jobless in the name of development.

All these factors raise several doubts about the validity of the Sensex as an indicator of development. Development for whom and at what cost? Doesn’t economic growth have to include the welfare and development of the country as a whole? Or is it just restricted to the rich and the elite class. If the Sensex keeps soaring at this current rate and captures the measure of the eradication of poor rather than the poverty, the success of India Rising will be short lived.

Thus it will be important for us to wake up from our slumber and realize that things are not really what they seem. The Sensex is nothing but a mirage of the Economic growth of our country representing something that is there but never achieved. We, as the citizens of the country, need to wake up and learn that the Sensex is not reliable and it only indicates that we are getting richer from the surface and poorer from the core. If the basis of our very development is hollow from inside any milestones or success achieved will be extremely short lived and will vanish before we know it.

Surbhi Bhatia