How a Sinking Economy is Crushing the Aspirations of the Indian Middle-Class

Money Matters

How a Sinking Economy is Crushing the Aspirations of the Indian Middle-Class

Illustration: Arati Gujar

Though my father was always passionate about automobiles, he only ever bought his first brand-new car at the ripe old age of 45. In our middle-class Calcutta neighbourhood, our new Maruti Suzuki DS was conspicuous in its metallic green shine. It replaced the second-hand Ambassador that had been the family vehicle for years. At the time, nobody could have been happier than my father. This was the late ’90s, and my dad could have been the mascot of a resurgent middle-class that had discovered aspiration, and was proud of it.

In the ’70s and ’80s, right up to liberalisation, “middle-class” was a label that most of us wore with a certain sense of pride. A middle-class person was someone who valued every little thing that came his way: His salary, his modest home, his annual family vacations to a hill station or a sea-side town. Train travel was planned meticulously in advance, and unless you were travelling abroad (which was very, very rare), air travel was a privilege. The middle-class family cherished its single TV that brought them all together every evening and on Sunday mornings. The family was careful about how every rupee was spent and saved. Surf’s Lalita-ji, who represented the parsimonious, practical, value-conscious homemaker, was the perfect embodiment of those times. Every family had multiple LIC policies, for the child’s education and wedding. And for the death of the family patriarch.

In 1981, aspiration became a car called Maruti Suzuki. Suddenly the middle-class was upwardly mobile — a movement that picked up momentum post-liberalisation in 1991 and accelerated with the first mobile phone being launched in India in 1995. Families started holidaying abroad. IT jobs that paid in dollars and gave free coffee vouchers, replaced IIT and medical degrees as life goals — who wanted to slog it out for years when you could zip right into the heart of Silicon Valley and enjoy the good life? Solid dependability had been happily swapped for newfound spending power. Luxury brands, retail chains, multiplexes, swanky sedans, penthouses in condos in satellite townships, Thanksgiving holidays, modular kitchens with chic cook tops, and more travel; we were loving it!

However, what goes up must come down, and today the very markers of middle-class affluence are now indicators of how bad things really are. Everything that we had taken for granted is either at a premium or at risk of being denied to us.

The ballooning middle-class aspiration that had been driving the economy for a long time has gone bust.

In September this year, Maruti Suzuki stopped production at its Manesar and Gurugram plants for two days, to cope with dipping sales. Other companies aren’t doing that well either. Rising fuel costs coupled with worsening traffic situations in affluent metros such as Bangalore and Mumbai may be the other fear factors.

Air travel has become expensive, prohibitively so during peak season. Foreign trips are a major challenge with the rupee sliding down against the dollar and air fares soaring. Besides, Jet Airways going off air this year and November reports of Indigo struggling with faulty crafts has added tremendous stress to the existing fleets, pushing up ticket prices considerably.

People have been putting off spending on dream homes. It’s been a bad year for the realty sector, and middle-class professionals who had been saving up to invest in a property have now abandoned the idea, choosing to invest in government schemes instead. It is easier to live on affordable rent in a comfortable, functional neighbourhood than to sink your hard earned money in a project outside city limits that would be stuck for years. According to the government, there are 1,600 stalled housing projects and 4,58,000 unsold units across the country.

Education loans are steep, and servicing those loans is a daunting task. Families are mortgaging their assets, selling off their property, and moving to smaller towns or shared family homes, to service loans that could send their children to American and Australian universities. Or even afford a decent education in the country. The sliding rupee has escalated the costs of ongoing sessions by at least 10 per cent for those studying in the US. Those who are yet to sign up, are in a fix.

It’s been a bad year for the realty sector, and middle-class professionals who had been saving up to invest in a property have now abandoned the idea.

The party in the IT sector seems to be over as well. Topping a season of downsizing and job cuts, in December when Cognizant cut 13,000 jobs worldwide, it hit you. We recalled those days when a government or public sector job was considered the most stable ones in the country. Then again, the thousands of BSNL employees who did not get paid for months and opted for VRS, may want to tell you otherwise. Mobile tariffs have been hiked because companies are struggling to stay afloat in the face of cumulative back taxes that all of them have been asked to pay. But because we cannot do without mobile phones, we have no choice but to go along with it.

The ballooning middle-class aspiration that had been driving the economy for a long time has gone bust. As much as we may hate to admit it, most of us have already started making tweaks and sweeping changes in our lifestyle, to “adjust”.

We adjusted to demonetisation and we adjusted to GST. We adjusted to depleting savings with fixed deposit rates sliding and loans getting costlier. We adjusted to soaring prices of LPGs and gold. We adjusted to match-boxes pretending to be studio apartments. We adjusted to not ordering from our favourite restaurants, and then adjusted to the zing being taken out of our favourite foods after the onion price rise.

And so, every day we add to the list of things we learn to make do without. It is our middle-class conditioning after all. The same mentality that drove my father to put off buying a car until well into middle-age now pushes us to shop at bargain stores and rediscover the marvels of our own country, putting off an upgrade to the latest iPhone until next Christmas, and opting for costume jewellery to wear at a family wedding. We are learning to lasso in our runaway aspirations. After all, this ability to adjust, is what defines us, the middle-class in India.

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