Why you should invest in NPS

This post is to promote the National Pension System (NPS) as an investment option. I first heard about it in January 2016 and liked the investment proposal immediately. Since then, I have discussed it with many people and witnessed quite a bit of resistance, a few of which I have been able to convert. To me, any salaried person who is in the 30% tax bracket, NPS is an attractive investment proposition.

What is NPS

NPS is a voluntary, defined contribution retirement savings scheme which is administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA), created by an Act of Parliament. Under NPS, individual savings are pooled in a pension fund which are invested by PFRDA regulated professional fund managers (PFM) as per the approved investment guidelines into diversified portfolios comprising of government bonds, bills, corporate debentures and shares.

While there are many nuances to NPS (which can be accessed at http://www.pfrda.org.in), here I am presenting the broad structure of the scheme, focusing on giving my investment rationale. This analysis is most relevant for self-subscribed investor who falls in the 30% income tax slab. Again each investor may have his/her investment strategies, but I think NPS offers benefits of diversification, safety, and healthy return potential.

Schematic of NPS

Market Uncertainty

The returns on NPS are riskier compared to schemes like PPF and EPF which largely invest in fixed income government debt. Government debt apart, NPS also invests in equity instruments and non-government debt which makes it riskier. But at the same time, this gives it higher return potential, something which would appeal to the risk appetite of younger investors. An investor can choose the asset allocation (say higher equity) depending on the risk appetite, subject to asset allocation caps which are in place to control the level of risk. Nevertheless, there is no certainty of the return that NPS will generate for an investor, beyond the reasonable return estimate for different asset classes.

Tax Regime

NPS falls under the Exempt Exempt Tax (EET) tax structure.

• E - contribution to NPS to the extent of Rs. 50,000 p.a. is allowed to be deducted from tax under section 80 CCD (1B). This deduction is over and above the maximum tax deduction of Rs 1.5 lakh allowed under Section 80 CCE.
• E - annual returns on the investments are not taxed.
• T - the lump sum withdrawn on exit from NPS is taxable. This is in contrast to the EEE tax structure applicable to other long term investment instruments like PPF and EPF where the maturity amount is not taxed. In a relief given in 2016 Budget, withdrawals from NPS on maturity would be tax free upto 40% of the total corpus accumulated. The maturity corpus that is converted to annuity is also not taxed. For instance, assuming 40% of the corpus is converted into annuity, then effectively only 20% of the total corpus is subjected to tax. However, the annual payouts of the annuity would be taxed.   

An investor has to exit the NPS at the age of 60 (apart from a small technicality). At the time of exit, the subscriber has to perforce use a percentage (min 40%) of the accumulated corpus to purchase a life annuity from a PFRDA empanelled life insurance company. The remaining part is withdrawn as lump-sum (this withdrawal can be deferred for upto the age of 70).

The amount that is withdrawn in lump-sum and the future annuity payouts will be taxed as the tax structure prevailing at that time. Tax concession is offered upto 40% of the total corpus value, which would be set off (as per my understanding) against the withdrawal amount (assuming the same is higher than 40%).

Investment Rationale

Taxation at the time of withdrawal is what puts off most investors from subscribing to NPS. However, I contend that despite this, NPS is an attractive investment option, primarily on account of the upfront tax saving of 30%. My investment arguments are as follows:

1. The entire lump-sum is not taxed at the time of withdrawal but only the extent of 60%. Further, the time of withdrawal would be few years away for most investors - for instance, for an investor aged 35 today, the withdrawal would be in the year 2042. Till that time, the tax slabs would have moved significantly upwards from today’s levels. So while today 30% tax is levied on income above Rs. 10 lakh, this limits might become Rs. 30 lakh by the year 2042. Hence to calculate tax payable on the withdrawal amount at maturity based on today’s tax slabs would be fallacious.

2. Again since the taxability would fall quite a few years away, one cannot be sure of the tax laws prevailing at that time. Given the government’s focus on getting more people under pension coverage, NPS withdrawals becoming fully tax-free is not in the realm of impossibility. Indeed, the 40% tax exemptions allowed in 2016 points to accommodating stance by the government.

3. Even assuming the prevailing tax structure, I have calculated IRR (Internal Rate of Return) of 10.9% for myself on NPS. This is post-tax return which anybody would appreciate is a handsome return over a 25 year horizon. To put it in perspective, on a like to like basis, putting the funds into equity over the same time horizon gives a return which is higher by 130 bps.    

Some critical assumptions are:

• I have assumed NPS to give 12% annual return for the next 10 years and then declining by 2% every 10 years. In the longer term, India would not give the returns it is giving now
• Tax slabs (which are now at 10% for <2 lakh, 20% for 2 lakh - 5 lakh & 30% for 5 lakh - 10 lakh) are expected to increase by 1.5 times every 10 years.
• Annuity payouts after 60 years would be tax-free as they would be less than the minimum tax slab at that time.  
• At the period of vesting at the age of 60, 40% is assumed to go towards annuity plan, and remaining 60% would be withdrawn out of which 20% would be taxed.
• The amount that is withdrawn is not invested elsewhere and not giving any return.

Annual Cashflows

Some of my key takeaways from my IRR modeling are:  

1. Even if I were to stress some of the assumptions related to tax and annual return, the IRR remains above 10% which is very good return over the longer term.
2. The shorter the tenure remaining for the NPS scheme, the higher is the return. For instance for a person who is entering today at 40 years of the age, the IRR is 12.2%. This is because I have assumed lower return on investments in later years.
3. Higher percentage conversion into annuity at the time of vesting lowers the IRR. This is because the return assumptions on annuity is lower than the IRR. Thus it makes more sense for an individual to withdraw the maximum amount at the time of vesting.
4. The NPS scheme allows the investor to remain invested, except the amount required to be converted into annuity, in the NPS scheme till the age of 70. But this option reduces the IRR, again because the return is projected to be lower than the IRR calculation.

Lifts & Loos

Caution: the so called fairer-sex may find parts of the post objectionable. So read at your discretion

Everybody has, or at least searches for, some place where they find peace and happiness. It can be home, a mountain side, a sea shore, lover’s lap, kid’s cuddle, in front of laptop, on factory floor, in artist’s studio, or a place of worship. But one place that is a universal abode of relief is - the loo. Almost everyone would have gone through that agony of a long drive, when you have just had that refreshing lemonade you had packed for the road but the next restroom is some kilometers ahead. Of course, in India we enjoy the luxury of relieving ourselves wherever we fancy, and frankly there is something liberating about peeing in the open - with a mountain in your sight, the sound of cars whizzing past behind your back, to see the leaves revolt against unwanted watering, and to get the fresh air ‘in’. You get a lesson in geography when you make a gorge into hard soil with your ‘stream’, and with that rare insight, you wonder if all the gorges in the world were made when He peed. Leave aside the religious sermons, that is when you feel being ‘one with Him’. Just imagine our obsession that we have so many terms – the slightly rude ‘urinals’, the simple ‘loo’, the polite ‘restroom’, or ‘washroom’ or the very choicy ‘powder room’ (even the word toilet is avoided in more polite circles). It took me some time to realise that restrooms are not the place for one to lie down and relax after a long walk or journey.

To the loos, let me add another similar place, and that is a lift or an elevator. Now what is the similarity you ask. I have this social observation – people get similarly and strangely awkward at both these places. And here I am referring only to the men’s urinal we find in public places or in offices which has rows of white receptacles to accept your offering. There is always a strange silence at both these places, apart from the whirring of the fan, or of gushing down of water. Why is that so? I think in loos it is that innate, strange embarrassment at doing in public something that we are more comfortable doing in private. While in the elevator it is the tension of being confined in a closed space.

While one has to spend only a few seconds in the lift, but I always sense that a heavy elephant has also entered. So you find that one is looking up at the fan, one is looking down at his feet, most people are looking at the display screen. That screen becomes the object of such intense attention and gaze that one wonders if it blinks purely out of pressure. The air gets very heavy and it feels that everyone is holding his/her breath. I am sure I hear an exhalation as soon as one gets off. Entry of new members brings more tension (especially in India where the habit of greeting strangers is not prevalent unlike the western world where greeting everybody on entering an elevator is common). First of all, one is not sure that the button for my floor is pressed, as the view may be blocked. So I have to ask somebody or twist myself to get a view. If the button is pressed, a relief. If it is not, then should I try and stretch myself to press or ask the one nearest to it. Many a times when someone is approaching the lift, there is a confusion whether that person wants to enter the lift or he is going somewhere else. Should I stop the lift or not? I look rude if that person wanted to enter and I did not stop and I look foolish if I stop and he did not want to enter. The dilemma does not even if I know that the person wants to enter. He may be some distance away and how do i estimate his speed? Will he rush when he sees that somebody is holding the door for him? Or if he walks in his own merry way, than I am better off going my way, he can take the next one. Is that rude? But it is practical no! The tension mounts when you are the one nearest to the keypad in a crowded lift and have to take this decision. Since everyone in the lift is affected, should it not be a democratic decision (can we have a quick vote to decide) or is it my autocratic decision. If I decide to hold 10 people for one, I may irritate many who are in a hurry. Indeed many people do get furious when the lift is stopped by someone for someone else, their body language saying ‘do your good deed of the day somewhere else or on someone else’s time’. It is not unlike how people in a crowded bus react to onboarding passengers.

At times, tension comes from the other side. In most lift designs, on most floors, the lift panels would have separate buttons for whether you want to go up or go down. If you press the down button, the lift which is on an upward journey is not made to stop and vice versa. Most people, at least in India, do not understand this concept and always press both the buttons. While no bother for him, but for people inside it can be a nuisance because the lift stops at that floor even when the person there has no use for it. The problem escalates when the person outside continues to press the button in question, thus preventing the lift car from continuing its journey and holding up an entire army. So the army shouts back. Getting off a lift can be another issue, not unlike getting off a bus or a train. So if I am standing blocking the door, how do I know if someone behind me wants to get off at a floor? Do I look back at each stop? And how does one give way? Does he get out of the lift? Many times I have felt that it is better if the person blocking the door (especially if he is of sizeable proportion) get off the lift and re-enter once people have off-boarded. But most times, people find it too much of an exercise, or some people have a mortal fear of getting off the lift before their actual stop, lest the doors would close immediately, leaving them on an unknown world where beasts wander. Having a beautiful woman in the lift increases the already high tension (captured  most interestingly by the series of ads by Royal Stag tag lined ‘Men will be men) – given the limited space it is tricky to stare at her without appearing to do so. If the female in question happens to be wearing a short skirt, my usual lift habit of looking down becomes treacherous. Often the thick perfume smell or sweat stench encapsulates the palpable tension. So you see how much tension and decision-making this apparently small matter involves.

  

If lifts can have so much anxiety, loos are way ahead. While men are trained to pee in a standing position, public peeing and that too in such proximity can be unnerving. So all kinds of interesting situations emerge. The assault to privacy can be extreme in a urinal. I find the three urinal combination especially interesting (no, seriously). One feels too exposed when surrounded from both sides. And I feel that no self respecting man would intentionally chose the middle one when the corner ones are free. My concerns are compounded if there are insufficient boundaries between receptacles – I have seen partitions whose length and transparency can be more inappropriate than a girl’s skirt. The most embarrassing specimen that I have seen would be the portable urinals, in half-marathons. Whoever designed them either had a bad day at work or an amazing sense of humour. They are usually made of some plastic compound with people facing each other in sets of two or three. There is absolutely nothing hidden, and one has to make effort to avoid catching the sight of the opposite number’s digit.

And people have all sorts of habits of peeing. While the usual practise is to unzip and start, but I have seen people properly lower their pants, which is not a pleasant experience. Another disturbing habit is the post-facto jiggling which many people do. While I agree it has practical validity, but it can become exaggeratedly distressing (ok I stop). Starting with a full bladder and thus letting go with energy and vigour, can also be a noisy assault. And what to say when the urinal is choked so one ends up seeing the ‘well’ fill up. Aargghhh. Also why do people have the habit of spitting while urinating? I never understand. Positioning of hands ‘in the act’ is also an interesting study. So there are those who use both hands to hold either ‘the precious’ or their pants, some keep both hands at sides or even at back! as if in an act of defiance or superiority, and some keep one hand on the partitioning wall (for support I presume).

Awkwardness overflows in a loo. Usually people find it a very personal experience to pee and thus want their privacy. So most tend to remain silent. But are there any protocols of behaviour in a loo? It should be taught. Does one acknowledge a fellow ‘reliever’ in the adjoining spot with a nod, with a ‘hello’, or a handshake (ok that is going too far)? Or the decent thing is to remain silent and let the person have some peace. In my office, I have seen many people (and myself) talk wherein one of the them is doing his business while the other is washing hands. At times I feel like saying to the guy washing hands ‘while you have done your bit let me do mine, don’t you know how much concentration it requires?’ Conversation across the boundary is not too uncommon either. But tension accompanies a senior who enters and joins the ranks. Talking about joining ranks, many public toilets can get overcrowded at specific times, for example, as soon as a flight/bus arrives, and have a waiting queue. When the person you are waiting for takes much longer to finish than those in adjoining queues, you feel like saying ‘this is not the place to contemplate’. I hope you appreciate the peculiarities and immensities a loo can bring.

Before I close, a small anecdote. Long back I was appearing for one of those competitive exams which are held in a randomly selected school. So I was in the Convent of Jesus & Mary school in Delhi. I went to the restroom before the exam began. I kept looking for the standing receptacles but could not find, instead there were only the closed cabins with proper lavatory. I appreciated the infrastructure. What a school, it does not care about practicality and wastage of space, but more about giving comfort to students. It was much later that I realised that it was a girls-only school.   

10 years

On June 1, 2016, I completed 10 years of corporate working. I had joined after completing MBA from Management Development Institute. For me, it was a big achievement, because there were times, especially in the initial phase, when I doubted if I would survive in the corporate world. I agree that the question is not yet settled and my corporate stint is still a work-in-progress. Early morning, at my desk, when the thought of completing 10 years stuck me belatedly on June 2, I wrote two mails to two sets - one to the batch of 5 management joinees (all freshly minted at business schools) who joined with me at Deutsche Bank, Mumbai in June 2006; and second to my close friends who have had similar career paths as me and who has been my sounding board for most ideas - career and otherwise before 2006 and since.   

Mail to the Deutsche Bank Gang of 2006

Hi All

Don't know about you all, but for me yesterday was just another day in office. And the same seems to be the case today - a usual day.

Just that there is commonality about today for all of us. It just struck me a while back that i completed 10 years of corporate life yesterday.

And, then the fact struck that the same can be said for the entire DB group of 2006.  

I do not recall the details of June 1, 2006 except of entering a meeting room in the morning, and seeing Mr. Vishal Parmar sitting impeccably with a high-and-mighty serious expression on his face. Wrong first impression, i agree.

The number of 'Eight' DB management trainees has always been in my head. I keep counting the campuses everyone joined from, how many stayed beyond the first year, who all went to London, who all went for the Euro-trip, how many joined the ops department etc etc.  

I spent just 10 months of these 10 years in DB but they were the most fun days. Possibly because i was not doing anything. Of course, the stint at ICRA has been most satisfying professionally. Anyways, feels like completing a full circle, don't know what that means.

10 years back, I had no answer to the question - what I want to do in life? Surprisingly, nothing has changed on that front today. Going more by eliminations then selections. Not sure if that is a bad thing.

Leaving the reminiscences and ruminations aside, raising a toast (of virgin mojito to Vishal & Surya) to the class of 2006.

We set sail together.  

Mail to close friends and partners in most crimes

Hi All

Yesterday was just another day in office. And the same seems to be the case today - a usual day. But it just struck me a while back that I completed 10 years of corporate life yesterday. Neat packets of 10 months - DB, 7 months - JP Morgan and 103 months - ICRA.

Why i am sharing this with you? Because you all have been pillars of this stint of 10 years. The stint in Bombay was memorable because of Pank and Sid. And I would call Ss almost everyday for opening in ICICI Bank. I had no idea about the person i was calling, I was selfishly pestering for a job. How the tables turned. I always find it very strange that i was so desperate for ICICI then and in a short period, Ss joined ICRA.

Pank has always been a sounding board but most vigorously during the stay in Bombay. We used to talk almost daily. Mostly because of my desperation for a job change. During this period, Pank had access to my gmail id and i would call him any time during the day to send my cv to consultants. And he would always oblige. And immediately after putting my papers at DB, i was having second thoughts. I remember the call i made to him from the DB 6th floor foyer.  

To that extent, the stint at ICRA has been more peaceful. And most satisfying professionally. The initial years used to be more fun, because they were more energetic, frantic. I and Pank would meet on average once in two months, mostly in Blues. He has made me wait hours at Oxford book shop. This guy had kept many of the bills of that period and proclaimed to me one day that the tab must have run upwards to 1 lakh. Gross exaggeration i say.

Last two years in office have been about thinking of Sj. How i cherish those 10 mins we talk around lunch time, and how I want to reach home early. And the last 3 months have been about the G.  

I think a lot and I am in a particularly pensive mood today. I don’t know what to make of these 10 years. I acknowledge that one need not attach a meaning to everything, but if I do not look back now, for once, then when will I?

The way I see this world, there are two kinds of working people – (a) those who work for money and, (b) the rest. The category (b) can be broken down further into – (i) people who do something because they are exceptionally good at it which makes them stand apart, (ii) those who do something because they enjoy it and (iii) those who do something which contributes to the society/world. I would bracket all of us in the category (a). Yes, I agree there are occasions when we enjoy what we are doing, when we get satisfaction from cracking a deal, or understanding an industry etc. But the question to ask here would be that would we still do this work if we get the same money without doing it? And seriously, I would not delusion myself into thinking that I am good at what I do. More relevant is that what is there to excel in rating companies? Also, I don’t think it contributes to the society/world in any significant way. I say that as an analyst I used to make paper black and now as a team lead I make them red. I think category (a) would make up for 95% of the workforce in this world.

Another problem of our working culture is the need to explicitly separate the working time from personal time. The so-called ‘work-life’ balance. I have been guilty of attaching too much importance to my work and devoting lesser to the family. I tend to think of them as safety net – most useful in a desperate situation. In such a scenario, the time we scratch for ourselves, be it that weekend break or that once-a-year long leave, becomes that much important. To me it sounds desperate.

I agree that all this is a very critical view of things. I agree that there is a respect in labour, in doing whatever you are doing with integrity and responsibility. But at the same time, there is no harm in moving on. Doing something which I can be absolutely good at or which I can do just for the sheer joy of it or which I do to give something to the society. There is an old quote which I absolutely love and have long held on to – “If you’re not a communist at the age of 20, you haven’t got a heart. If you’re still a communist at the age of 30, you haven’t got a brain.” But this quote is contextual, written during the 19th century, period just after the industrial revolution and of social movements across the world. In today’s times, I would like to flip it – capitalist at 20 and anti-capitalist at 30. I agree that both stages can also co-exist but then one does justice to neither.

For now, I am happy I have survived this decade and not done too badly. But I would be very disappointed if am writing a similar mail after completing another decade, from my office desk. 10 years back, I had no answer to the question - what I want to do in life? Surprisingly, nothing has changed on that front today. I am still going more by eliminations then by selections. It is not necessarily a bad thing. But high time it changes.

Movies

I love movies. I have loved them from very early age in the 90’s when the entire family would sit in front of the single Sony box on Saturday and Sunday evening and relish a Hindi classic. When I was watching Guide for the first time, an elder cousin for whom too it was a first viewing, exclaimed ‘Now I understand, this movie is so famous because of its excellent songs’. I disagree with the opinion but just shows how movies have created vivid memories. Both my parents were movie buffs. My father can always recall which movie he had seen in which cinema hall in his heydays, and he had seen most of the blockbusters. My mom was not so prolific but recalled movies she had seen with papa. Nikaah with its sharp rendition of “Dil ke armaan aansoon main beh gaye” by Salma Aga used to be her favourite.

Before joining college, seeing a movie in cinema hall was infrequent, but a must on celebrations like birthdays and marriage anniversary. I remember one birthday when I forced my parents to take me to Aaj ka Arjun (a cringe-inducing thought). Hum Aapke Hain Kaun was a big rage and I got to see it twice - second time to accompany my maternal grandparents because they needed company. They later complained to my mom that I did not let them see it peacefully and kept chirping about what would happen next. DDLJ and KKHH too were big rage and seen with enthusiasm and fanfare (today, I cringe at KKHH). I remember getting properly scared while watching the opening sequence of Jurassic Park in a ramshackle hall in Kanpur, while my parents had not yet joined me. And this was when I had already seen the movie - in the school audio-visual room.

My movie experience and horizon expanded manifold during my post graduation. Staying in a hostel with access to broadband and people who had come with loaded hard disks from their graduation time gave a treasure chest. And I played gleefully. I had a like-minded, initiating friend and it was an unsaid pact to watch a movie daily. Almost. The record was 4 movies in sequence. I had seen very few English movie till then - only in cinema halls during graduation. Usually, it was a problem of time and company. But both the problems got solved during post graduation and I had the most memorable time. At the end of the course, I diligently burnt CDs of some of the favourite movies - something which has become much simpler since then with inexpensive storage space - in laptops, mobiles and hard disks.

Over the years, I have kept up my affair with movies - both Hindi and English. While staying in Mumbai, I used to buy movie DVDs from outside local railway stations for Rs. 100. But watching movie on TV has been a frustrating experience. One gets movies of only certain vintage and type - usually from last 10-20 years, mostly raw action, mostly famous masala titles. It is very hard to get different genres and different eras. So I keep fishing around, borrowing hard disks. This was what allowed me to watch a lot of Hitchcock. I remember watching ‘Rear Window’ at a British Council movie-appreciation session. With Hindi movies, it is even more difficult to get classics on hard disks and one has to rely largely on Youtube (where also it can be difficult) or DD National on Sunday morning (recently watched Shabana Azmi, Naseeruddin Shah and Farooque Sheikh classic Bazaar there). I give most of the latest Hindi movies a miss (apart from a rare good movie) and watch the latest English movies at cinema halls.

Just like any movie buff, I have my favourites. I want to watch more of certain kind of movies such as English noir films, English classics of 50-70s, Hindi classics of 50-60s and parallel Hindi cinema of 70-80s. And I have not seen many films of this period, the key constraint being time and access. I also enjoy reading about movies - books or news articles. I religiously watch Oscars during its repeat telecast late into the night (stopped seeing the Bollywood Filmfare Awards long back). I fondly read movie reviews (by reviewers whose views I relate to, definitely not Times of India reviews). Rajeev Masand was a favourite before his show stopped coming at a sane time on the TV. Long back, there was a site whose articles I liked - filmimpressions.com. Now, I like reading articles in Mint - by Jai Arjun Singh and Uday Bhatia. I read Roger Ebert review for every English movie - before or after seeing the movie. Infact, I have compiled his list of ‘Great Movies’ as a kind of bucket list.   

Movie appreciation is difficult to define. Over the years I have loved movies for so many different reasons. Hindi - I love Anupama and Sujata for their script and acting, Awara for its treatment and scale, Teesri Manzil for the sheer energy of Shammi Kapoor dance, Guide for the strong story, direction and beautiful climax, Sangam for bold presentation, Woh Kaun Thi, Jewel Thief and Johnny Mera Naam for being the best Hindi thrillers, Mili for its unusual ending, Chupke Chupke and Golmaal for their delicious hilarity, Chashme Baddoor for its freshness and freedom, Mausam for such sharp story and acting, Prem Rog for its last 30 minutes, Jaane bhi Do Yaaron and Katha for the dark satire, Khamosh for being a taut thriller, Chandni and Lamhe for beautiful story and fresh presentation, Dil Chahta Hai for acting and style, and in recent years, Lootera, Kai Po Che, Detective Byomkesh Bakshey. Paan Singh Tomar, Masaan and Haider for breaking the mould.

The list is longer for English movies - I love Good Will Hunting for its deep script, Casablanca for its sharp dialogues, Chicago for its energy and fun, Lincoln for Daniel Day Lewis’s acting, Dead Poets Society for everything, Shawshank Redemption for the dialogues and the eureka climax, Apollo 13 for the uplift it gives, A Few Good Men for dialogues, The Prestige for its sharp script, No Country for Old Men for Xavier Bardem, Erin Brokovich for the script, Love Actually, Notting Hill and Pretty Woman for the hopeless romance and style, Max Max-Fury Road for the mind-blowing energy, OldBoy and Seven for shocking script, Schiendler’s List for the script and direction, Road to Perdition for the background score, The Silence of the Lambs and Alien for the captivating direction, Hitchcock movies for introducing and benchmarking the mystery genre. Some movies I watch for the actor or director such as Steven Spielberg, Anthony Hopkins, Michael Caine, Russell Crowe, Cate Blanchett.    

While it is not easy to summarise a movie in just a phrase, least of all some of the masterpieces that I have mentioned. But the problem emanates from my own weakness as a viewer. Reading literature on movies (and watching Oscars),  has made me realise my huge deficiency as a movie-watcher. For starters, I have no understanding of the craft of movie-making. As an absolute layman, like most viewers, I do not understand camera angles, the clear demarcation of roles of the storywriter and the scriptwriter and the dialogue-writer, how has script enhanced an average story, how one movie is better edited than another, or even how one movie is better directed than other, how is one acting performance a masterclass, what is powerful music? Yes, I know when I like a movie, but I am not be able to pin down the reasons down to its intricacies, at least to the extent possible. And that is a big drawback. I have also realised that many times I do not understand the subtle messages, the unsaid aspects, the interpretational aspects, the emotional currents of the movie. How and what the actors are emoting or conveying without actually saying. A long meaningful glance, or a long silence. When I read the review by the critics, I realise so many new points about the movie, which I had not observed or not realised. So many movies I have liked without being able to establish the reason. Leaving aside my own frame of mind at the time of watching the movie, which influences how one receives it, I am sure that the master directors, writers, dialogue-writers are able to influence the viewer in a powerful manner. And a lay viewer like me is not wiser about it.

Some part of this failure emanates from my own imperceptibility, and poor observation. A large part of the failure comes from being fed on Bollywood movies of a certain vintage during the formative years. Over the years, as my understanding has improved, I have realised, entirely subjectively, that Bollywood has offered very few movies which can be called as ‘good movie’. Of course, they can offer beautiful music and choreography, elaborate set pieces, but they are not good movies in the true sense. What is a ‘good movie’? The beauty lies in the eye of the beholder. Most Indians enjoy Bollywood movies, in fact some of the movies which I would call ‘bad’ movies are loved. But that happens when one restricts the definition of a movie to just an entertainer. Most Indians would say that for them movies are primarily a means of relaxation, an escape from daily stress, a way to unwind. So a common refrain is leave-your-brains-aside when watching Bollywood movies. Who wants the stress of understanding nuances of movie making or understand subtle messages, or a movie where things are left unsaid and have to be deciphered?

Thus we end up with very linear movies - broadly in the two genres of romance and action. The repository of drama, science fiction, biographical, historical, noir, mystery, thrillers is largely bare. Most Indian movies over the years would fall under the broad story line of ‘First half - boy meets girl and woos girl through elaborate songs. Second half - ditto with some obstacle, like unapproving parents, which arises and is resolved in last 15 mins’. Or ‘First half - the protagonist has been wronged himself or witnesses someone else being wronged and decides to right it. Second half - ditto with an elaborate fight sequence in the climax’. There is no universal yardstick of what can be entertaining and there is nothing wrong with seeing movies for fun and without much thought, my only point is that we should not call it ‘good cinema’.

Again I am no expert, but for me the definition of a ‘good’ movie is a ‘good story told well’. There should be a story that the movie wants to tell. That for me is true entertainment, that is when I feel content. It is not necessary for me to relate to every aspect or character of the movie. An example can be the movie Dor - a simple yet solid story and presented with minimum characters and frills. Also, I am not saying that an action or song-and-dance cannot be a ‘good’ movie, it is mainly about having a story-line. Also, many good movies require the viewer to play a part. The movie requires the viewer to see where he fits into the plot, to invest emotionally into it, to introspect. Only when has the viewer done it, taken this important step, is the movie watching experience complete. And it is not easy. I am not saying that the experience is not fruitful without this subconscious evaluation, but a good movie and its makers deserve this investment by the viewer.

This is not to say that there are no ‘good’ Hindi movies. But they are very few and the number has been steadily declining since 1950s. In fact, as per me there is a noticeable decade-wise trend of quality of Hindi movies which reached its nadir in 1980s and 1990s. Nowadays proponents of Bollywood proclaim that the situation has improved and there is a lot of experimentation and different movies being made. But as per me this is only partially true. My cynical view is that the decades of 1980s and 1990s were so abysmal that now any slice-of-life movie, or movie which does not follow the templates given above, is considered good or ‘progressive’ cinema. So any growth from zero base is considered good, even though we are way behind anything approaching ‘good cinema’ when compared to a wider benchmark. It is more a case of self-congratulation and ignorance of not just the world cinema but better specimens of Indian cinema.  

There are two ways in which movies can be appreciated - in terms of its revenue collection and in terms of awards it collects. These can be mapped, by some stretch of imagination, into two class of viewers - masses and the critics. At least in India, the gap between these two is very wide and so antagonistic that overlaps are rare. And over the years, the view of critics has been so drowned that even the domestic awards are largely based on the commercial success of the film. Thus, appreciation of movie as an art form has seriously suffered in India. In Hollywood, while ‘good’ cinema may not do well commercially, it definitely gets noticed in the Oscars. Despite the times, where the voice of market (or majority) has grown stronger, Oscars have maintained strict standards and upheld the responsibility of acknowledging and promoting art. In fact, the Academy is at times criticised for lauding boring movies. This is not to say that Hollywood does not throw-up bad movies. They do (some of which do very well commercially), but then they have impressive percentage to good, even exceptional films. And Hollywood offers a eye-poppingly wide range - comedy, musical, historical, period films, drama, biographical, action, thriller, mystery, horror, rom-com, sci-fi, animation, action-comedy, westerners, war movies etc etc. And movies across this range are released every year.   

So what it means for an average Indian viewer. A person like me gets confused without any anchor - i don’t like what I see in Bollywood and I am not equipped to fully appreciate the better stuff elsewhere. Over the years, I have only realised that I don’t understand movies well. And it is frustrating. It is like Robin Williams says in Good Will Hunting “...Michelangelo? You know a lot about him I bet. Life's work, criticisms, political aspirations. But you couldn't tell me what it smells like in the Sistine Chapel. You've never stood there and looked up at that beautiful ceiling…”.