Perhaps, Mr Minister, there is something about our psyche that makes us paranoid about prosperity. Our genes, grown in deprivation, refuse to accept affluence. Our mindsets, nurtured in moderation, refuse to indulge in the kind of ostentatious consumption, the kind of junk-and-replace purchase pattern, that drives the great economies of the world. And how keenly I have felt this. Our gentility, unable to cast off the shackles of the intellect-powered, commerce-inimical culture bestowed upon us by our traditions, goes into a mode of denial when it comes to being branded as good at making money. We delight in the cerebral-cultural global triumph of a Vishwanathan Anand, an Arundhati Roy, a Satyajit Ray -- but we shrink from acknowledging that the richest man in the UK, businessman Lakshmi Niwas Mittal, has sprung from our land. We can call it a national failing, sir, but we can neither wish it away, nor discount its impact in causing the national depression that we're reeling under.

We have even managed to forget, thanks to this relentlessly downward movement, that, if you take the long-term view -- when the clouds gather, sir, may we not be forgiven for seeking the silver lining? -- our economy is not in the depths that many of us think it is. Oh, I know that everyone points at the annual rate of economic growth of 5.50 per cent as proof of a machine that is grinding perceptibly to a halt. Did we not, they ask, drive up the speedometer to well over 7 per cent for two successive years, 1994-95 and 1995-96? Old men are cursed with long memories, sir. To me, 5.50 per cent spells steady growth from the average of 4.30 per cent that we could boast of between 1982 and 1988. But instant economics, seeking instant comparisons, sees us heading downwards. Actually, sir, much as you might hate to hear this, Manmohanomics, and its successor, Chidambaramonomics, both worked. But what good has it done us? We still feel despondent. We still feel demoralised. We still feel defeated.

Once sparked off, this feeling spreads -- and is spreading -- like the proverbial wildfire, wreaking havoc on a scale quite disproportionate to the original causes that started it. S. Ambirajan, a former professor of economics at the Indian Institute of Technology, Chennai, believes that this plunge in sentiment, once experienced by a few consumers, spreads very quickly. ''There's an information cascade which takes place. Anxiety spreads rapidly.'' What is worse, sir, precisely because its origins are not based on tangible factors, plummeting consumer sentiment gathers momentum with every passing moment. My understanding of why it is so comes from sociologist Ashis Nandy, who points out that ''a lot of consumption is determined not by real needs, but by created needs. And created needs are fragile. They shatter with the onset of fear, panic -- even doubt.''

Consumers consume, and business does business as a result, because people like you and I -- well, perhaps we are atypical -- feel good. About themselves, about their future, about the country. Marketing consultant Rama Bijapurkar explains the cause-and-effect relationship so simply that I cannot do better than to quote her. ''Consumer confidence comes from a belief that tomorrow will be as good, or better, which makes it safe to spend today.'' When they don't feel that way, they fall back into the squirrelling mode, hoarding away precious resources in preparation of the winter that they know is coming. That there has been a sharp, and sustained, drop in the growth rates of purchases -- not of the bread-and-butter genre of products, which are essential, but of the fridge-and-washing machine variety -- requires little evidence. The classic indicator, which I have come to count as a leading-edge indicator of consumer enthusiasm, is waning. According to the Association of Indian Automobile Manufacturers, car sales increased last year, but only marginally, from 411,305 in 1996-97 to 416,408 in 1997-98.

Worse, and this is why I am panicking, Mr Minister, consumers are not displaying behaviour that suggests they expect a better tomorrow. In other words, they aren't borrowing. Not for a house, not for a car, not for a vacuum-cleaner. Instead, they're saving, as your statistics cell has already briefed you. To jog your memory, Indians raised their savings from 25.30 per cent of the Gross Domestic Product in 1996-97 to 26.10 per cent in 1997-98, lifting bank deposits by 16.80 per cent in the process. Market research findings mirror those figures: ORG-MARG has estimated that physical savings now amount to 8 per cent of the Gross Domestic Product, while it was only 6 per cent four years ago. Indians preferred to buy 45 per cent more of one of the least-appreciating assets in the world today -- gold -- rather than lavish it on the products and services that corporate India creates and markets.

It is not a figment of my, or anyone else's, imagination. My peers are aware of it. My competitors are worried about it. My bankers are troubled by it. My channels are terrified by it. Many learned voices of consumer behaviour support the idea wholeheartedly. One of them, Asit Mehra, who is the director of strategic planning at the ad agency Ammirati Puris Lintas, is studying it closely. ''There is no disputing that consumer sentiment is at a big low at present,'' he says. ''It persisted all through 1997, when it hit sectors like real estate and consumer durables. But in the first quarter of 1998, it has become worse. A private study by Lintas indicates that even packaged goods and daily-use products have started to be hit.''

The seamless switch between the personae of consumer and employee is playing a leading role in this sentimental drama. My friends Amal Ghate, Pobitro Banerjee, L. Jayakrishnan, and Ranjan Behl are consumers on weekends, but they are hard-working managers of corporate India by day. When they analyse their spreadsheets and watch their sales graphs slowing, Mr Minister, it inspires in them none of the confidence that can drive them to behave as they did three or four years ago. The flow is often reversed too. As consumers, their uncertainty impacts their behaviour as managers, forcing them to take business decisions such as holding back on new investments, going slower on a new launch, or shelving that office redecoration.

The impact of such decisions is incalculably large -- and long-term. When tisco said it was deferring its Rs 2,250-crore plant in Gopalpur in Orissa, a hundred other CEOs summoned their strategists to reconsider their own future investments. Pradeep Pant, the CEO of Indian Shaving Products, believes that while ''sentiment gets shaken by any form of uncertainty, particularly political uncertainty, it is, in fact, companies who strike the panic-button with massive price-cuts and extensive promotional campaigns, forcing the consumer to wonder whether there's worse to come.''

What, you may ask, does dented sentiment translate into for the economy? Simple, Mr Minister, but no less disturbing for its simplicity. It makes consumers postpone their buying decision. That is why inventories are climbing across industries, depriving the exchequer of the excise and sales tax that your predecessor had bargained for when he butchered tax rates last year. A few statistics to prove the point? My pleasure. In consumer durables, inventories have jumped by 13.29 per cent. In saleable steel, by anywhere between 45 and 60 per cent. Even in fast-moving consumer goods, by 5 per cent.

The decision to postpone a purchase is particularly vital today. Pardon me for lapsing into a resume of familiar recent events, but the first post-liberalisation surge in consumer products -- which was at the vanguard of the boom in every other sector -- was powered by the enormous number of people who were joining the ranks of the consuming classes. Today, however, that initial appetite has been satiated. And the market, I am told by my strategists, must now be driven by the upgraders: those who are moving up the consumption ladder. The bad news, for both you and me, is that this upgradation feeds off sentiment. In times of uncertainty, it is an option exercised much more rarely. Lend your ears, sir, to S.K. Palekar, the vice-president for marketing, Mirc Electronics, who says that, ''sentiment is important in marketing a discretionary product like a consumer durable. Replacing, or upgrading, your TV set is an eminently postponable decision.''

Naturally, what happens to consumer products cascades backwards, and forward, to affect the supplier industries as well as the distribution and retailing businesses. Udayan Bose, the chairman of Lazard Credit Capital India, is his normal succinct self when he says that ''sentiment affects industries across the spectrum, from white goods, through the automobile sector to construction, housing, cement, and steel, with a multiplier-effect working along the way.''

You must be asking yourself, Mr Minister, whether this argument camouflages a charter of demands of the kinds my peers have already presented before you during your pre-Budget 98 consultations with them. It does not. There are, of course -- are you surprised? -- suggestions. They rest on the assumption that the government, in general -- and you, in particular -- can do a great many things to boost the sentiment of the customer and, by extension, of business.

My appeal to you and to your colleagues, Mr Minister, is to re-affirm your confidence in the future of the economy, instead of resorting to the easy path of shaking your head gravely over the legacy you have received. Do not fall into that trap, I pray. You have the perfect weapon to deploy, Mr Minister, one that needs no underground test in the deserts of Rajasthan. It is Budget 98. Grant me an old man's frenzy, sir, as a poet from another era said, and entertain my ideas. Loosen your purse-strings -- inflation is no worry, sir -- and spend handsomely, doing what the consumer is not. Set off, Mr Minister, the biggest, most ambitious privatisation programmes known in the history of this country (not that that is a difficult task!), to revive the interest of my corner-room peers like no burst of adrenaline can. Accompany it with widespread disinvestment in the public sector, which will bring investors rushing back to the primary markets for a piece of some of the country's finest corporations. Identify the sectors that, according to your economists, lead industrial revival, and invest in their future by lowering excise duties in those areas. Raise, if you must, Customs duties to fulfil your pledge to protect Indian business -- you won't find me complaining! -- but do warn my compatriots that this shelter is for them to raise their standards to global levels, not to sink back into the pre-liberalisation mediocrity that all of us wallowed in so comfortably. And, I beg of you, do not, under any circumstances, kill the consumer's spirit by raising direct taxes. Encourage her to spend, sir, not to save. Without that, we will die.

If the CFO of India Inc. is willing to bet on tomorrow, so will consumers, and so will business. That is my promise to you, on behalf of all of us. Will you keep yours?

I remain,

Yours Sincerely,
Every CEO

--R. Sukumar. additional reporting by Adite Chatterjee, Chhaya, Rajeev Dubey, Swati Kamal, Nanda Majumdar, Rakhi Mazumdar, Ranju Sarkar, & R. Sridharan

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