Beyond the pretty picture

The Indian art market grew at a phenomenal 35 per cent yearly; prices increased threefold in less than five years. It was beingnbsp;touted as the fourth most buoyant art market in the world

For those who8217;ve been contemplating starting an art collection there8217;s never been a better time to buy. Modern Indian art, which for the last five years has been viewed almost as one would a blue-chip stock, has taken a huge hit lately. The prices of works by all Indian artists, even the Progressive Artists Group that include India8217;s most famous names 8212; Souza, Gaitonde and MF Husain 8212; have fallen by over 30 per cent in the last three months.

Considering the turbulent economic climate, the recent Emami Chisel Auction of works by contemporary Indian artists held in Kolkata on the 8th of November didn8217;t do all that badly. Two canvases by M F Husain sold for over Rs 50 lakh each, and one by Satish Gujral went under the hammer for Rs 3,68,000. 52 per cent of the works on display sold. But this figure is dismal when compared to Emami8217;s auction held in early February this year featuring the Progressives and Moderns, where an astonishing 91 per cent of the works sold. More significantly, many of the canvases bought then were by new, younger, emerging artists.

Market sentiment may have changed drastically in ten months, butnbsp;a correction in Indian art prices was in any case on the cards. Recession or not, most works by even new, unproven artists were absurdly overpriced. Serious art aficionados in India number in the few hundreds. Unfortunately, given the prices, buying Indian art over the past decade was less about succumbing to a passion, and more about parking your money in a get-rich-quick scheme 8212; with the added advantage of having it decorate your living space, if temporarily. Over two hundred art galleries have mushroomed in Delhi in the last three years, including a mall dedicated to Indian art. In the past few years, any sophisticated asset planner would have started including investments in art in their clients8217; portfolios. Stories abound of people selling their art for such fantastic sums that they could suddenly afford homes in South Delhi. Other speculators got groups together to invest in one particular artist for six-month periods, before selling out at double the price.

The Indian art market has been growing at a phenomenal 35 per cent per annum; simultaneously prices skyrocketed, going up by a factor of three in less than five years. Till a year ago, it was beingnbsp;touted as the fourth most buoyant art market in the world. Everything sold. Now, uncertainty brings with it caution and discernment about purchases: thus, there8217;s likely to be a much-needed shakeout. Still, worldwide, quality art has survived economic downturns.

It8217;s the half-dozen international art funds that set up in India in 2007 withnbsp;millions of dollarsnbsp;to bet on promising new artists, who are the worst hit. The basics of economics apply to art as well: when supply outstrips demand completely, prices fall. The junior artists who don8217;t have a strong provenance to support them will have the toughest time surviving with art collectors8217; wealth diminishing.

The global context is important. The economic slowdown has hit art markets all over the world. At the Christie8217;s auction in New York last week, more than 40 per cent of the works on display went unsold. A survey conducted in September 2008 suggests that confidence in Indian art fell 23 per cent from the last reading, in May. This could be because the Bombay Stock Exchange has lost more than half its value in the last six months.

Most galleries in India offer buy-back policies for their art. The art season traditionally kicks off every October. So far three top galleries in Delhi have recorded a 50 per cent dip in sales from individuals, and are selling more to institutions and auction houses. In the current scenario the market for middle-level art has virtually disappeared. nbsp;

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It8217;s the ideal time to reassess the value of Indian art. The market needs serious collectors and art historians, people that question the validity and importance of art works, and can set benchmarks for pricing. Optimistically, the last decade has been a glorious one for Indian artists, whonbsp;have made a mark internationally, attracting the worlds8217; most important collectors and fetching huge sums in prestigious auctions. The shake-out in Indian art will lay thenbsp;foundation for a second cycle, which will hopefully, be more mature. For new buyers, the slowdown drives home the point that not all works by great artists are great. And nobody is recession-proof.

leher.kalaexpressindia.com