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August 16, 2016 Tuesday 12:22:49 PM IST
Budgeting Exercise in Family Fosters Fortune

I was invited by a very popular Kochi motor vehicle show room people for inaugurating their car sales festival on Chingom 1(Malayalm calendar), considered highly auspicious by Keralites.

A grand programme was meticulously arranged. 123 cars were being  sold on that day. All new cars of the same make in 6-8 lakh range, with minor variations depending on the taste of the customers and cost of accessories fitted. A large car key specially made for photographic effect was to be handed over to the owners by me. The proud families  generally comprised,   apart from the head, the wife and two children with one or two of their old parents. I was excused after about 15 sales and the event went on perhaps till evening.

I am a writer and for me everybody is a character in my world. I was watching the crowd for the reactions. The moment a customer’s name is announced over the mike till the end of his part in the photo event, I found an invariably common and identifiable reaction in them and their accompanying family members. Bewilderment mixed in happiness and pride.

I was sure all of them were first time car buyers. They were now entering a new society of car owners, immediately jumping ahead in the social stepping stones, and now their life style will have to change and they will try relentlessly to adapt to the newly acquired status. They have jumped into the pond. They have to swim for survival, whether they knew swimming or not. Onlookers are watching them.

Actually there was no need for a car for them. But the convenience, status, pride, visible proof of success in life, happiness they get from the envy of the carless neighbours and colleagues made them purchase the car. They had never budgeted for a car with their simple income graph. But the very liberal and attractive financing schemes lured them. Discarding simple arithmetic, they have jumped in and now they cannot return.

In India, as in most of the developing nations, family budgeting has changed and is now much more complex than what it was when the income was predictable. The earlier income and life style were based on the kulathozhil (hereditary jobs) system where your caste/ religion/tribe had clearly specified the jobs and areas of activities you are allowed to take up.

Even the type of roof your house should have or the types of cloth you wear were strictly customized. The wages were predictable and ambitions limited.

The status was not measured from the wealth and the highest caste tag. The learned and the intellectuals, the Brahmins in the Hindu religion and the priests among Christians and Muslims considered receiving charity in kind or cash from persons of lower social orders including the rulers, traders and workers as their right. In fact it was their only income.

The change came after Independence.

The change was almost sudden. It was similar to what happened in state budgeting.

In the state budget, provisions were to be made for the main functions of the state. In those days, Government’s main duties were tax collection and law and order. The top representative of the Government was Collector. The title was simple and apt. He, the Government, was the tax collector and magistrate combined. The expenditure was predictable and tax collection could be easily connected to the requirements.

But after Independence, the scenariounderwentadrasticchange. Two new targets, development and social justice, became equally and even more important activities of the Government. Development required enormous economic investment and heavy inputs. Increasing tax for financing these activities was politically suicidal in democracy where the rich and the poor have equal strength in voting power. So loans became the main revenue source and interest on loans became a main expenditure.

Mobiles, television and fast food are part of the lives of even our illiterate masses. The market economy and the thrust by the incredible and sweeping scientific and technological inventions have brought the world to a stage where the time old prejudices of race, language and colour have almost been wiped out. The entire existing equations in philosophy, sociology, politics, economics and every other social science have become meaningless and have to be re-cast. The world is incomparably richer than ever before and there is an unprecedented prosperity around us.

Naturally, the family budgeting also had to go topsy-turvy. The kulathozhil system ended. Anybody could aspire and excel in any sphere of activity. The education, health, industry, service and religious fields are open to all, achievements are accessible to everybody. Naturally, the capital investments in their selected sector for training the children are now an essential part of family budget.

There is no limit to the dreams of parents and children and dreams to come true require heavy financial inputs. But there is very little corresponding improvement in the income. In addition, the consumerism and higher living standards have made even the daily expenditure climb up in an unpredictable manner. Hence loan is now the only source and just like in state budget, interest on the loans becomes an important item of expenditure in family budget also.

The old system of banking was giving more importance to deposits from customers giving them a clearly predictable income as interest and banks preferred to give loans only to financially reliable industries or ventures. But the changes brought about by the dream-like technological inventions during the last few decades almost wiped out these concepts in economic thinking.

The new generation banks with their eager marketing strategy brought insurance and internet in their fold and directly targeted almost all the households irrespective of the size or economy.

The existing system of family budgeting will naturally have an inevitable end very soon. But I am not worried. Young people in India today are growing up in a rapidly globalizing environment, and are accustomed to diverse, multi-religious, multi-caste coexistence. They find themselves as part of a great cultural heritage, and value it not just for its ancient glory, but also because they see it as their traditional ethic of work and ability to outsmart other.