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Once upon a time the rising population of India was one of the prime headaches of Indian government. The government India in the early 1970s, Indira Gandhi, Prime Minister of India, had implemented a forced sterilization programme to control the rising population. After 4 decades the same rising population of India is being termed as an asset for the Indian economy. Capitalist are strong enough to convert problems into economic gains. This is called changing life styles.

From banks to consumer goods all are awaiting for the golden phase of the Indian economy when the average age of the young population will come down to 29 from the current 35.This revised age indicates that Indian population is all set to rewrite the history of the world. Credit card the biggest invention in the financial market where cash was converted into a plastic magnet tape based card.

In the United States credit card debt alone grew from less than $10 billion in 1968 to over $800 billion in 2005. Total consumer debt reached $2.1 trillion in 2005. Among lower income households 55 percent were in debt in 2004. Personal bankruptcies increased from less than 4 per 1,000 households in the 1950s to 52 per 1,000 in the late 1990s. More than 1.6 million filed for bankruptcy in the 12 months prior to June 2005, approximately twice the number who filed 10 years earlier. In 2005 the personal savings rate dropped below zero (meaning that people spent more than they earned). History speaks best for the upcoming future if it’s being well read. Currently India the domestic saving rate had touched a high of 36.9% in FY08 but since then has steadily fallen. It fell to 33.8% in FY10 and raised a tad in FY11 to 34% but again fell to 30.8 of GDP in FY12. House hold savings fell from 23.5% to 22.3%, public savings fell from 2.6% to 1.3% and corporate savings dropped from 7.9% to 7.2%. Our ancestors uses to say that savings is a double income.

Following the steps if the west would turn out to be a nightmare for the distant Indian economy since like US economic policies we don’t have social benefits being provided to the citizens. Those, who work in a shopping mall dreams very hard to become one of the biggest customers of that mall. Competition takes birth which ruins the society and increases corporate fraud practices. Drop is savings rate and increase in consumption demand leads to bubble of credit based debts. Well banks are happy and consumer goods smiling with the consumption growth. This is called changing lifestyle.

Urban or rural India both are under the ambit of low savings. Dreams needs no hardworking, it only needs a debt to complete. Rising population increases consumption but a sudden drop in the economy will create situation like 2009 when people used to commit suicide due to catastrophic levels of debt. Human mind cannot remember everything but certain things should remain engraved. Brand marketing has shifted its minds from products to young youth of India.

Products are not branded but the youth of India is branded. Their consumption dreams are marketed to lure the short term economic growth of India. In equality in livings has been taken as the prime tool of exploitation. Earlier economist during the 18th and 19th century used to be concerned about inequality in earning and disproportionate distribution of resources.

Well capitalist has solved both the problems in one shot. Supply debt to reduce inequality and increase debt to reduce gaps in between distribution of resources. I find inequality in income which is the foundation of an economy. Debt can reduce gaps but that needs to be paid back later. I find we are late to recognize this since our savings are dropping and our young generation is running at the back new foreign brands and changing lifestyles. We are in the competition of Debt.


Master in Economics/MBA in International Business/ICAI(Final)/Pursuing Master in Journalisim

Published by

Indraneel Sen Gupta
(Vice President-Business Development,Research & Product IFAN Finserv Private Ltd.(SPA Group Company) )
Category Others   Report

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