Election fever grips Bollywood and India’s financial sector

Bollywood’s right-wing underbelly is on show this election, with a long list of films queueing up for release before April-May. Bollywood’s default political mode, especially during the 60s and 70s, was socialism, with screenplays focused on the repressive feudal hierarchy or big capital exploiting the dispossessed. The advent of 1991 economic reforms shifted the dominant leitmotif; the craggy arc of Indian cinema history now decisively bends towards the right, highlighting the imagined persecution of the religious majority.

The movies released so far have a skewed narrative and take liberties with historical facts, in tune with contemporary political grammar. A review (rb.gy/lrjnay) of the movie Article 370 in the Indian Express noted: “Mixing facts with fiction, and some convenient untruths, dipping into the right-wing narrative of Jawaharlal Nehru’s ‘blunders’ in Kashmir and Maharaja Hari Singh’s ‘inclination’ towards India, Article 370 presents the government of the day’s scrapping of the special status of Jammu and Kashmir as a masterclass in State craft. The bending of Constitutional obligations along the way is just a necessary evil."

It is indeed interesting that the ruling political party finds feature films, in addition to social media platforms and traditional media properties, an effective vehicle for propagating its message. Apart from Article 370, some of the other movies up for release include, among others, one on Hindutva ideologue Veer Savarkar and a movie on the Naxalite movement in central India. Even some books with narratives that play to the ruling party’s core election narrative are being released. For example, historian Vikram Sampath’s book Waiting For Shiva—on the controversial and disputed Gyanvapi mosque in Varanasi—was released recently, timed just before the elections, even as the courts are hearing arguments about the structure’s status.

Even the financial sector is chiming in with electoral messages. The country’s largest commercial bank, State Bank of India (SBI), expressed helplessness in complying with the Supreme Court’s 15 February order on electoral bonds. The court had directed SBI to provide details by 6 March of all parties purchasing electoral bonds and all political parties encashing them. SBI waited till 4 March—two days before the deadline—to plead with the court that it be given time till 30 June, which is well past the elections and new government formation, to tabulate the details.

It might be instructive in this context to view Section 19 of the State Bank of India Act. The relevant section gives the government, the largest shareholder with a 57.49% shareholding, the right to appoint a chairman and four managing directors as well as a majority of non-executive directors to the bank’s board. It has been insinuated that this power has the capability of yielding political dividends. Counsel Kapil Sibal had argued during the electoral bonds hearing that while the ordinary voter is clueless about political donations, the Centre is “privy to this information" through SBI, implicitly pointing towards the government’s influence over SBI management. It is also difficult not to discern the political implications of the bank’s prayer that it be granted time till 30 June.

The tightening noose of regulatory action by financial sector regulators—the Reserve Bank of India (RBI) and Securities and Exchange Board of India (Sebi)—over the past few weeks also points to a growing sense of unease over irrational exuberance in Indian capital markets and among financial institutions, something that could spell ‘political risk’ for the election campaign. The first actor to feel the pinch was Paytm Payments Bank, an organization which has faced regulatory action every year since 2018 (barring 2020 during the pandemic) and survived to tell the tale… till the guillotine came down this 15 February. The bank’s management has been playing fast and loose with RBI’s know-your-customer norms, evading the regulatory slipknot each time while seeming to thumb its nose at authorities by ignoring the need to address regulatory breaches. This brinkmanship reached its sell-by date this election season.

RBI also initiated rapid-fire regulatory actions against some non-banks displaying risky lending behaviour: IIFL Finance was asked to stop its gold loans business, JM Financial Products was ordered to “cease and desist" all forms of financing against shares and debentures. Sebi followed up by barring group entity JM Finance from underwriting any debt issues.

It can be argued that Paytm’s infractions were common knowledge for a while and yet it was afforded a long rope. A somewhat similar argument has been made about non-banks, because RBI has been warning against runaway growth in unsecured retail lending and associated risks for almost a year. All you need is to join the dots to understand what has precipitated action now.