Admit It, The Water's Around You

Mehrunissa Mehboob Mullawale
Housemaid, Mumbai

ECONOMY: REPORT CARD
Admit It, The Water’s Around You

It has been an amazing rollercoaster ride for Indian consumers. Over the past five years, they have shopped up a storm thanks to unprecedented growth, lived with zooming inflation, and battened down the hatches when things cooled down. The last five years have definitely enhanced choice and mobility for a young workforce—but, as if to compensate, the past six months have also laid bare a dire vulnerability.

Worryingly, there’s the sobering statistic that a higher number of Indians now lives below the poverty line. So, are you better off today than in 2004? Well, as our listing and voices reveal, prices of many things we take for granted are up, while annual salary increases are a third of those five years ago. It is, for many, the morning after.


	2004-05	2008-09

Your spending: In The Kitchen

1 kg sugar	14.5	21
1 kg onion	13	21
300 ml Coca Cola	6	10
Groundnut oil (1 kg)	87	109
500 ml bottle of milk	10	12
A loaf of bread	9	13
LPG cylinder in Delhi	251-297.95	295-307#

All figures in Rs #On Jan 28, rates were cut by Rs 25

Mehrunissa Mehboob Mullawale, Housemaid, Mumbai: “I don’t think this government has done anything great to improve our lives.” “But they are better than the previous one in some ways. Like the roads are better, but only slightly so. With prices rising steeply, we wish it would try to make our basic needs affordable. What I do like about the government is that it made sure the new houses under the slum rehabilitation scheme are larger (300 sq ft), allowing a family of four to live in some comfort. It also came to our aid with a relief of Rs 5,000 when we suffered losses in the 2005 floods.”

Your spending: Healthcare

Cost of bypass surgery (Rs lakh)	1.4	2.4
Crocin 500 mg (one leaf of 10 tabs)	7.5	11
Baby food (500 gms)	150	170
Health cover premium#	1,300	1,200

# Rs 1 lakh policy for a 35 year old. All figures in Rs

Your spending: Travel

Petrol (per litre)	37.84	40.62#
Diesel (per litre)	26.28	30.86#
Delhi-Mumbai airfare	6,400	4-6,000
Mumbai Railway pass 1st class**	480	520
Mumbai Railway pass 2nd class**	120	140

* Average fare for airlines ** Cost of monthly pass from CST to Thane. All figures in Rs # Current prices in Delhi, down from a peak of around Rs 50 for petrol and Rs 35 for diesel, post two rate-cuts since Dec ’08

Tapomoy Bandyopadhyay, GM, Ambuja Realty, Calcutta “In 2006, the interest on home loans was 8.25 per cent. At 11.5 per cent, it is quite high now. We have little choice but to increase our emis or extend our loan tenure. If I do not extend the tenure, my emi will be Rs 7,000 more than what I had to pay when I had taken it.”

Your spending: Entertainment

Movie ticket (PVR)	90-250	150-750
21-inch colour TV	12,500	7.500
Blank CD	15	7
Blank DVD	50	15

All figures in Rs

Abhijit Shilotri, CEO, Yatra Exhibits, Bangalore “Excess disposable income during the boom was useful for smaller entrepreneurs like us. Business was really good till these last few months. Now, customers are adopting a wait-and-watch policy. I have bought property, roamed around the world, made my two children’s future secure through investments. Of late, I have cut down on unwanted expenses and am just trying to be safe. The new government has to come up with a shot of vitamins to restore confidence in the investor and the aam admi. It should look into a new stimulus package for all of us. I really hope for fewer taxes and less red-tapism.”

Your spending: Lifestyle

Pair of jeans (Levi's)	1,400	2,000-2,500
Bottle of whisky (750 ml, Bagpiper Gold)	180	210
Wills Navy Cut cigarette*	2.5	3.5
Cup of tea at a restaurant	6	10
Entry-level car (Rs lakh)**	2.3	2.23
Servicing a Maruti 800	1,200-1,500	2,000

* Per stick ** Ex-showroom Delhi prices for Maruti Alto. All figures in Rs

Kinkini Chakravarty, Executive, EEPC, Mumbai “Since the economy has slowed down, we will have to tighten our belts and get used to living ‘unleveraged’ lives, irrespective of which government wins power. The lifestyle of people in power didn’t change. Corruption in government was rampant, although it was led by a man of integrity.”

Your spending: Keeping In Touch

Entry-level mobile phone	3,000	1,100
ISD call to the US (per minute)	2.4	1.2
STD call*	2.25	1
Local call**	1.99	1
Personal computer	30,000	19,000

* Per minute from Delhi to Calcutta ** Mobile to mobile per minute. All figures in Rs

Shahid Ahmad, Hairdresser, Delhi: “I do not expect any dole from the government.” “I just want enough to survive and support my family. The inflation also takes away whatever more I earn compared to 2004. On a day when I earn and save a bit I eat a meal of chicken, if not I survive on dry bread.”

Your Resume: Careers

Average fees for IIT*	1.08	2
Average fees for IIM*	3	11.5
Average salary at IIM-A placements*	7.1	17.85
Average starting salary in IT sector*	2.6	3
Central Govt salaries (min basic pay at entry level)	2,550	7,000
Average salary increases (% year-on-year)	9.7-13.4	3-9**
No. of BPO jobs created (lakh)	1.5	7
Number of employers listed on Naukri.com	14,000	32,500

* Rs Lakh ** Estimated. All figures in Rs

Your Investments: Earnings

Savings deposit rate	3.5	3.5
5-year FD deposit rate (for less than Rs 15 lakh)	4-6.75	7.25-9
Rate of return on PPF	8	8
Rate of return on EPF	9.5	8.5

All figures in %; Source: IndiaPost, EPFO and bank websites

Surinder Singh, Farmer, Jalandhar:
“The UPA government’s policies towards farmers have helped us better our lifestyle.”

“Higher minimum support price for paddy and wheat has resulted in more money in our pockets and the lot of farmers today is very good. We have acquired all basic urban comforts, like air-conditioners, colour televisions and refrigerators in the last few years. Since I have no other family liabilities except towards my own children, my farm income is sufficient to provide us a fairly good livelihood. Though everything is becoming expensive, if we continue to get a good price for our produce, farmers will have few grouses.”

Your Housing: Buying A Flat

2 BHK house in Powai, Mumbai

15.2

76

3 BHK house in Gurgaon

25.5-48

45-60

2 BHK house in Velachery, Chennai

9.4

23.5

2 BHK house in Whitefield, Bangalore

13.5

31.35

All figures in Rs lakh

Your Investments: Stocks

Sensex value

4,759.62

9,903.46

Market cap of Nifty 50 (Rs cr)

6.33 lakh

18.79 lakh

Demat accounts at NSDL

5.4 lakh

9.6 lakh

Listed companies on BSE

5,296

4,925

Number of registered FIIs

552

1,609

Daily average share turnover at BSE (Rs cr)

2,186.16

3,354.57

No. of cities connected by BSE

423

360

% of household investment in stockmarket (%)

2.4

10,54

Data for 2004-05 as on May 31, ’04 and for 2008-09 as on Jan 31, ’09. Source: NSE, BSE, CMIE, National Securities Depository Ltd (NSDL)

Dr Narendran Ramakrishnan, ENT Specialist, Chennai

“In the last five years, my savings moved from fixed deposits to mutual funds. But I have been badly hit by the markets. Expenses on essentials, from food to fuel, has gone up. Is it necessary for the Sixth Pay Commission to be implemented now? We can use this money for other things. We read the UPA’s alliance partners kept the government from going ahead with reforms. Ironically, it’s because of this that our economy is still stable. I don’t believe in a totally open market. We don’t have the fiscal or political maturity for it.”

Your Borrowings: Interest Rates

Bank Rate

6

Repo rate

4.75

5.5

Average rate of a personal loan

14-17

18-25

Average rate of a car loan

10-10.5

13-14