I take the term consumerism to mean an economy located in a society in which individual consumption grows at a much higher rate than in years past, and dominates overall expenditure in the economy. This will affect the nature of jobs, as more consumption means production of more consumer goods – from handlooms, soaps, mobile phones to refrigerators.
One can say that this has been happening in India for some years now. Large-scale employment changes occur, as people find more jobs in manufacturing, and move from small-time self-employment to work in the service sector, work in restaurants and transportation, and secure employment in more organized industry.
India as a developing country has certainly transformed with steady growth in fixed employment and rising incomes. This has attracted international companies that are increasingly making consumer goods in the country, and of course, has increased local investment in such industries significantly. Note that when I’m talking about consumer goods and consumerism, I’m limiting myself to durable and non-durables, but not heavy investment items like residential homes. There is no doubt that there has been a considerable increase in the production and consumption of consumer goods.
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There are many who criticize consumerism as being self-centred and selfish, and that with rising incomes one must spend too much on other items of household expenditure such as education and health. However, the criticism is invalid as Indian households have increased spending in both cases; They spend more on children’s education and their health as well as on items of personal consumption.
But let us try to look at future trends in consumerism in the sense discussed above. Let us assume that despite some setbacks at times, the Indian economy is likely to grow significantly in the near future, resulting in greater expansion in employment and income. Rural households will increasingly urbanise, and even smaller villages will see more ostentatious personal spending. Income will increase and many low-income families will have higher incomes.
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It is not clear or logical to assume that as income increases, such rural households will waste their extra earnings. They will surely try to secure their future, and savings will show improvement. But, at the same time, they will feel confident about affording consumer goods that they previously only admired and envied. Clearly, an increase in consumerism in these lower-income classes would lead to an increase in government revenue in the form of the Goods and Services Tax and other duties levied on consumer goods. The result is that we will see a huge increase in the government’s annual budget and spending on infrastructure, leading to additional jobs and income growth.
However, what are the factors that can constrain this increase in consumption, which is also defined as high consumerism? Firstly, of course, the social attitude is reflected in the increased taxation of such goods. This would go along with many moral and negative criticisms of consumption. Many experts are likely to argue that as families earn more income, they should spend more on items of public value, such as helping the poor, sick and disabled, and on charity and religious ceremonies. Donations for
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In my view such a preaching, ethical approach will not be successful. Most people who have a high income will focus on improving their lifestyle through personal consumption. Obviously, there will be variations based on the socio-economic strata of the families. But in India, where they are many poor and low-income families, we should expect them to spend more on comfort than they would otherwise.
The increase in consumption will also change the strategies, tactics and methods manufacturers use to sell, market and distribute their products. I expect more retailers to use digitization and receive orders online without interacting with their customers personally and physically.
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We should expect more purchases and deliveries to be done directly to the homes of the buyers. The result will be a reduction in road traffic; Most of the jams are caused by office goers and those going to markets and malls. Advertising and ‘consumer culture’ will change even more, as it has shifted from print media and TV to social media and an online presence.
Employment opportunities will increase in the newly developed areas and regions, and will further lead to better income for rural individuals who migrate to towns and cities. We can expect an increasing decrease in cash purchases, as more people turn to digital and virtual payments. There is a possibility that with higher levels of consumerism and digitization there may be a reduction in the number of retail outlets, which will certainly have many consequences for the real estate sector, as well as governance issues such as planning of roads and parking.
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Despite these logical and visible changes, can we really expect India to become a strong ‘consumerist society’? The question is assuming that most of the people in the country are not fixed to consume more goods. that is not the case. Everyone wants to have a better lifestyle than what they have. Individuals and families can do this only if they have the means to acquire goods (money) that can give them more comfort in their lives. So to ask whether India will become a consumerist society in future and even this is an unjust assumption. Consumption of commodities has always been an important objective for most households, either in real terms or for aspirational people. People who had money bought goods, and those who didn’t have the will to do so. This trend will increase as income increases. So, consumerism has a good future, and we can expect it to continue to grow.
Economic policies by current and future governments will play a major role, and policy makers should focus not only on enabling more manufacturing of consumer goods, but also on ensuring adequate infrastructure such as housing, drainage, roads and transport Will happen.
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While expenditure on such goods would increase income and employment, it would limit the resources available for investment in the production of consumer goods. The problem for governments will be to ensure that there are sufficient financial resources within the economy to cover infrastructure and additional spending on infrastructure. More than this the delivery system needs to be improved.
Therefore, the limits to the growth of consumption are the availability of resources to manufacture the goods of consumption—the resources should be freed up only when we ensure that there is enough to be spent on education, health, transport, housing, law and order. available, and other elements of a stable economy. Also important is our ability to improve the quality of governance, which is the cornerstone of a stable economy.
We can expect a significant increase in consumption (increased consumerism) in the coming years. As I said earlier, this would translate into higher employment across industries, and would include large, medium and small scale firms. The demand for many items made today in cottage industries will continue to increase. However, most of the market will be controlled and served by organized manufacturers.
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Finally, we are a growing consumerist society, and we should not be apologetic about these trends. However, with climate change and environmental survival becoming a concern, the challenge will be to improve lifestyles without harming the environment.
(It appeared in the print edition as “Craving Is Good for Us”)
(views are personal.)
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SL Rao, who headed the NCAER for years, is considered a pioneer in measuring and measuring the size of the middle class since the 1980s.
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