The year 2020 has been unprecedented for the global economy with several highs and lows.
While in 2008, financial fragility upset the global financial order, this year saw a series of lockdowns. The shutdown and disruption of normal life started in March around the world as a health measure to combat the ongoing COVID-19 pandemic. The International Monetary Fund [IMF] describes the initial phase of the lockdown as a period worse than the global financial crisis.
India is no different, and is estimated to shrink from 7% to 11% this financial year.
These turbulent times also proved to be fertile ground for misinformation. Here are the top 10 stories on finance, companies, economics and policy, which we at BOOM examined and fact checked through the year.
1. Tatas to never hire from JNU?
During the anti-CAA protests, viral messages claimed that Ratan Tata had made a statement where he had decided not to hire from Jawaharlal Nehru University.
Tata Trusts rubbished this claim in a statement to BOOM.
2. Bank of Baroda's banking license revoked?
In February, an alarmist message on WhatsApp urged readers to withdraw money from the Bank of Baroda.
The message misinterpreted a LiveLaw link, that covered a case where the Calcutta High Court asked the RBI to consider canceling its banking license or restrict its banking activity after the bank did not clear a payment of a bank guarantee invoked by the Indian Oil Corporation. The court made a suggestion, and it was not an order or ruling.
The bank maintained that it withheld payment according to the terms of the guarantee.
3. Bank accounts to be shut without NRC
A panic-mongering message was viral on WhatsApp that stated that the government has shut down bank accounts of persons in Uttar Pradesh, Bihar and Manipur not having an NRC [National Registry of Citizens].
Further, it urged people from Maharashtra, Andhra Pradesh and Karnataka to withdraw their money from their bank accounts.
We found these claims to be untrue.
4. Dr. YV Reddy's comments on the economy
A viral message distorted India's economic and political history, attributing all of it to former Governor of the Reserve Bank of India YV Reddy's book 'Advice and Dissent'.
The end result was a misinterpreted and false 700-word long tirade against the Gandhi family and previous Congress-led governments. The message also mentions that India has never borrowed from the World Bank under the Narendra Modi-led government.
BOOM read the book and factchecked these claims one by one.
5. Unjustified comparisons of India's GDP growth with that of USA, Canada and Japan
In the first quarter (April to June) of the ongoing financial year, India's economy contracted 23.9%. These figures are calculated year-on-year, thus, these estimates were relative to how it performed in the same corresponding quarter last year.
This figure was compared to the contractions witnessed by the United States (32.9%), Canada (38.7%) and Japan's (28.7%) to show that some economies had performed worse than India in the same period.
This claim is unjustified since:
- India reports its figure year-on-year unlike these economies reporting it quarter-on-quarter
- The figures of US, Canada and Japan are annualised - which are quarterly figures compounded to show how much the economy would grow (contract) if the same growth (contraction) rate applied for the full year. India does not annualise its numbers.
We explain the process below.
6. RBI grants license to Bank of China?
When rhetoric against China was at a high this year, a digital initiative published a story that the RBI had granted a banking license to the Bank of China to operate in India. It was further shared on social media to build into the ongoing anti-China narrative.
The news was old, with the Bank of China was granted a license in 2018, and was listed as a foreign bank in 2019.
7. RBI denies reports of writing off Rs. 68,000 crores worth of bad loans
A Right To Information query filed by activist Saket Gokhale was misrepresented by the media.
While the RBI had told Gokhale that banks had written off loans worth ₹68,000 crores, media outlets like CNBC-TV18, Moneylife and Moneycontrol reported this as the RBI writing off this debt.
BOOM also outlines that the RBI does not write off debt, banks do, which the RTI mentions too. Further, such write-offs do not strip banks of their right to pursue recovery of these loans, and are only a banking exercise.
8. 'Raam' is the world's most expensive currency?
A bearer bond, 'Raam', was being peddled as the world's most expensive currency by several users of social media.
It was an interest-bearing bond, which was available for purchase in the United States and the Netherlands for $10 and €10 respectively. It is neither legal tender in any country, nor is it recognised as a currency.
9. Did FY21 start in July?
Claims that the financial year, which normally ends on March 31, was being extended to June - a period of three months.
These claims were going viral late March, a little less than a week after a nationwide lockdown had been imposed to combat the first wave of the COVID-19 pandemic.
The Ministry of Finance and the government clarified that this was not the case.
10. Only 2,200 taxpayers with income above Rs. 1 crore?
In February, several users of social media misquoted Prime Minister Narendra Modi, quoting him saying that only 2,200 people filed returns above Rs. 1 crores.
However, they misquoted him where they left out a nuance, where he was specifically referring to professionals such as engineers, doctors, lawyers, accountants, scientists and the film fraternity.