Waves, Words & What Lasts Beyond the Economic Theatre Curtain

Dear Insighter,

Every Sunday, a little after 5 pm, a stretch of Juhu takes on the air of both a pilgrimage and a neighbourhood fair. Outside Jalsa, hundreds of fans, some from across the country, gather for a fleeting, ten-minute sighting of Amitabh Bachchan. Big B steps onto his raised platform, waves, exchanges a few pleasantries and retreats. It’s intimate and theatrical, personal and performed. The fans know the script; the star knows his role. Everyone plays their part, and the Mumbai dream keeps breathing.

Economic policy has its own version of the Sunday wave — less glamorous, but just as scripted. Take the RBI’s reaffirmation of the Weighted Average Call Rate as its policy anchor, despite now covering only about 2% of overnight market volume. R. Gurumurthy calls this regulatory nostalgia, like insisting on Morse code in the WhatsApp era. It’s a familiar signal, even if the underlying relevance has faded.

This nostalgic attachment to fading benchmarks mirrors the crowd outside Galaxy Apartments on Salman Khan's birthday, or the faithful gathering at Shah Rukh's Mannat during Eid. The fans keep coming, the ritual continues, but the underlying economics have shifted dramatically. Just as Bandra property prices soar because of celebrity proximity rather than intrinsic value, policy anchors sometimes persist because of institutional inertia rather than market relevance.

The RBI also made a tactical move when it paused the repo rate. N. Srinivasa Rao points out that the economy is still digesting 100 basis points of cuts since February and that October remains “live” for further action if data justifies it. But others see the stance as limiting flexibility. Kalyan Ram argues that moving from “accommodative” to “neutral” earlier this year has boxed the RBI in: closing the door on cuts precisely when growth risks are building.

Dhananjay Sinha notes rural demand is under pressure from stagnant real incomes, private investment plans are shrinking, and urban consumption remains sluggish. K. Srinivasa Rao adds that despite abundant liquidity, credit growth has halved from last year’s pace, down to 9% in May 2025—a three-year low. Liquidity, in other words, is pooling in the system without finding enough borrowers.

Srinath Sridharan puts it bluntly: When rate cuts don’t spark lending, it’s like Bachchan waving to fans who’ve forgotten his films. Bank credit to industry is growing at just 5.5%, suggesting a deeper transmission gap. Policy intent isn’t turning into real economy activity.

BasisPoint’s Groupthink warns that the RBI’s focus on core inflation and a projected headline of 5% a year out narrows its space to cut further. That’s the unglamorous part: hard constraints under the applause. And as G. Mahalingam recalls, the real shifts (like post-2008 derivatives rules or post-2001 market reforms) happen away from cameras, under pressure.

And then comes the spectacle in Gurumurthy’s satirical take. On “Decision Day,” central bankers speak in tongues, markets pretend to listen, and anchors scramble to sound like they understood any of it. Economists dance around contradictions, pundits divine meaning from how often the Governor blinks, and LinkedIn fills with posts about “bold, cautious, balanced” steps that could mean anything or nothing. The point isn’t to clarify policy. It is to fill airtime, to appear insightful before the next ad break.

Enter Donald Trump: the uninvited front-row heckler.

His 50% tariffs on Indian exports are as much political theatre as an economic measure. Aurko Mahapatra notes they come alongside US irritation over India’s discounted Russian oil imports. The immediate hit could be large in specific sectors. Ajay Srivastava estimates US imports of Indian textiles, shrimp, jewellery, and metals could fall by around 30%. Babuji K sees the rupee facing fresh volatility as the RBI tries to protect macro stability without stifling growth.

But Vivek Kumar offers a counterpoint: tariffs on other countries could create $29 billion in potential export opportunities for India, offsetting much of the damage. On a net basis, the loss might be closer to $2 billion annually—manageable, but not costless.

Kalyan Ram argues the episode should be treated as a wake-up call: Not crisis, but catalyst. Like the 1991 balance-of-payments crunch that dismantled the Licence Raj, external pressure could force politically difficult reforms in land, labour, and process changes that don’t get balcony waves but shape long-term competitiveness.

Sanjeev Sanyal takes a similar line in a conversation with BasisPoint Insight’s Krishnadevan V. He dismisses the ‘dead economy’ narrative, pointing to 6.5% growth, and argues that India’s next transformation lies in “process reforms” that strip away inefficiencies layer by layer. You can also watch the interview here. 

Like the weekly gathering outside Jalsa, there’s the surface performance: the waving, the statements, the ritual reassurance. There’s the underlying economics: property values, crowd management, security costs. And there’s the deeper human needs being served: connection, aspiration, the Mumbai dream made tangible.

The difference, however, is in the posturing. Bachchan offers his fans a shared moment without overselling the impact. Policymakers, though, often mistake the crowd's enthusiasm for actual transformation.

Maybe that's the lesson: acknowledge the theatre, deliver on what's promised, and remember that the real work happens away from the platform. It happens in the everyday decisions that don't make headlines but shape lives. The fans will keep coming regardless. The question is whether the performance serves them, or just the performance.

The applause comes from visible gestures. But the durability? That comes from the foundation work no one photographs.

Until next week, when the markets wave back.
Yours in economic theatre,

Phynix

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