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People gear up for more belt-tightening Wednesday, February 28, 2001

AHMEDABAD: Repeatedly hit by harsh budgets, eroding their buying power and escalating cost of living, the average Indian has conditioned himself to curb spending and make the most of whatever is available. He has denied himself the many little comforts, which are taken for granted in the more developed and robust western economy.

And the tightening of the purse strings is not something which is restricted to a certain segment of the society. It runs through the very fibre of our economic fabric. The haves and have-nots are equally bearing the brunt of the slow-down in the economic growth rate. A cross-section of people talk on their condition and how they are faring today. Praveena Sharma reports:

Tushar S Trivedi, director, Adval Consultants

He has been fighting recession since past five years, when he set up his consultancy firm in Ahmedabad (1996), but to no avail. In the first two years, his annual income was barely Rs two lakh, which covered his basic requirements, and stretching himself beyond this would mean tampering with his budget. He paid an income tax of Rs 5,000 in the first two years. The subsequent year 1998-99 and 1999-2000 were not good years financially speaking, so he did not file any income tax returns in those years. But just when things were looking up for him this year, he has been hit by the quake. "I had invested Rs 10 lakh in the flat I had just bought. It has collapsed and now I will have to start all over again," says Trivedi. He had been planning to buy a mobile since a very long time. He has, now, post-postponed that. "Our economy has taken a severe beating over the last four years and, since we have been so engrossed in trying to eke out a living that we don't have time to think of anything else".

Restaurateur Herman Scott of Cafe Natarani

Watching him run his business, you would think he doesn't have a worry in the world. But when he talks about his finances, you realise that he too has not been able to keep out of the economic web of disaster that the government has woven over the past few years. In spite of three sources of income - his wife, Dinese Scott, works with Eveready and son is with Pizza Hut - he has to juggle money to plan a decent holiday. His wife gets home an income of Rs 9,000 after various deductions such as provident fund, contribution to the co-operative society and others.

As a huge portion of their income is ploughed back into the restaurant, so the Scotts are left with very little savings, except for some forced investments in insurance, tax-saving bonds and fixed deposits. "Even though all of us fend for ourselves, the rising cost of living does not permit us even one decent holiday in a year," says Herman Scott.

Seema Majumdar, dancer and singer

Being an artist, economic realities are distant from her. But the way costs have shot up in the past few years, they have touched the periphery of even people with minimum requirements. Seema's requirements are few as she is single and lives with her parents. But despite this, even before the month begins, she dreads the money crunch that awaits her at the end of the month. "I have a shortfall every month. I would like to buy silk but I settle down for simple, cotton clothes. Going out for a movie or eating out has also become very expensive. Spending Rs 100 on cinema tickets pinches me," says Seema. However, whatever drudgery that financial crunch brings into Seema's life is compensated for with a vibrant social life that she has at the Academy. "I cannot go out on a holiday, so I keep in touch with people who visit the Academy from across the world through the Internet, which costs me just Rs 30 per hour," she says.

Tejabhai Haribhai, chowkidar from Patan.

It is the sorts of Tejabhai, who are the worst-hit. They live their lives on debts, which mount to huge proportions over the years, and providing education to their children is also a luxury for them. Tejabhai earns a monthly income of Rs 1,200 while his monthly expenses are close to Rs 5,000. The grains that come from his village offer some relief in terms of lowering his expenses on food bills.

Out of his six children (four daughters and two sons), he is able to educate only three of them as he cannot bear the cost of education for others. "My children are studying in Rajkot and at the beginning of every month I have to send Rs 2,500 for their educational expenses. Things have worsened over the past few years due to the drought. We are not even able to get grains from our village," says Tejabhai.

But despite mounting debts, he wants to educate his children so that they are able to emerge out of poverty that he is in today.

Anant Naik, Dena Bank official

Naik has gone in for the Voluntary Retirement Scheme (VRS) and plans to take it easy in the coming years. But considering the way things stand today, this would be a far-fetched dream for Naik. Even on a monthly salary of Rs 17,000, of which he takes home Rs 10,000, his wife has to chip in by taking extra-curricular and tuition classes. It is this extra income which permits them such indulgence as going for a movie and eating out every week.

And Naik resents such shoe-string budget existence as being a banker, he knows exactly whom to blame for the pathetic plight of an average Indian. "The government has to cut down its expenditure. VVIP's security and defence costs are draining the country's resources. Over and above this, the government has also been increasing its liability by going in for huge debts and we bear the brunt of all this," says Naik.

He reminisces how easy it was, 25 years back, to subsist on an income of Rs 300-odd and also save more than Rs 50. He complains that with rising inflation, value of rupee has been depreciating. "The government has to do something to improve the purchasing power of the rupee," says Naik.

Mehrubhai Bharwad, partner in a petrol pump and gas agency

Bharwad shells out an annual Income-Tax ranging between Rs 15,000 to Rs 18,000, but nonetheless, he wishes the people would have better purchasing power so as dormant market demand the would actually result in economic transactions.

He has set up his business and expects his children to join him, but he is not very sure whether the market of the future would prove to be sufficient for all of them. He says, today, the desire for products is there, but there are no takers.

He measures the rate of inflation by the price rise that has occurred in petrol over the last 20 years. "One litre petrol cost just Rs 1.66 in the 70's, it costs Rs 31 per litre today. The burden is back-breaking for us and I also know of many who have to borrow at exorbitant rates at the end of every month," says Bharwad.

 

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