I take the word consumerism to mean an economy located in a society in which personal consumption grows at a much higher rate than in the earlier years, and dominates overall expenditures 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 could say that this has been happening in India for some years. There are massive employment changes, as people find more jobs in the manufacturing sectors, and move from small-time self-employment to work in the services sector, in restaurants and transportation and more find secure employment in the organised industry.
India, as a developing country, has certainly changed with steady growth in assured employment and growing incomes. It has attracted international companies who are increasingly making consumer goods in the country, and of course, aiding the considerable growth in local investments in such industries. Note that when I am talking about consumer goods and consumerism, I am confining myself to durable and nondurable goods, but not heavy investment items like residential houses. There is no doubt that there is considerable growth of production and consumption of consumer goods.
There are many who criticise consumerism as being self-centred and selfish, and that with increasing incomes one should spend a lot more on other items of household expenditure, like education and health. However, the criticism is invalid because Indian households have increased spends on both counts; they spend more on children’s education and their health, as well as on items of personal consumption.
But let us try and look at the future trends in consumerism in the sense we have discussed above. Let us assume that despite some setbacks at times, the Indian economy in the near future is likely to witness considerable growth, which will result in higher expansion in employment and incomes. Rural households will increasingly become urbanised, and even small villages will see more ostentatious personal expenditures. Incomes will rise and many low-income households will have higher incomes.
It is not apparent or logical to assume that as incomes rise, such rural households will squander their additional earnings. They will definitely look to secure their future, and savings will see improvement. But, at the same time, they will feel confident about affording consumer goods that they earlier had only admired and envied. Clearly, an increase in consumerism across these low-income sections will galvanise government revenues in the form of goods and services tax, and other duties imposed on consumer goods. The corollary is that we will see huge increases in the government’s annual budgets and expenditures on infrastructure, which will lead to additional employment and incomes.
However, what are the factors that can impede this rise in consumption, which is also defined as higher consumerism? First, of course, is social attitudes reflected in increased taxation of such goods. This will go along with a number of moralistic and negative criticism of consumption. Many experts are likely to contend that as households earn more incomes, they should spend higher amounts on heads related to public value, such as helping the poor, sick and disabled, and donations to charities and religious celebrations.
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In my view, such a preachy, moral attitude will not succeed. Most people who have higher incomes will focus on improving their lifestyles through personal consumption. Obviously, there will be variations based on households’ socio-economic levels. But in India, where they are many poor and low-income families, we must expect them to spend more on comforts than they otherwise would have done.
Increase in consumption will also change the strategies, tactics, and methods used by the manufacturers to sell, market, and distribute their products. I expect more retailers to use digitisation and receive orders online from their customers without having to personally and physically interact with them.
We must expect more purchases and deliveries to be made directly to buyers’ homes. The result will be a reduction in road traffic; most jams are caused by office-goers and those who visit markets and malls. Advertising and ‘consumer culture’ will change even more, as it shifts from print media and TV to social media and online presence.
There will be an increase in employment opportunities in the newly-developed segments and sectors, and further lead to better incomes for rural individuals who migrate to towns and cities. We can expect a growing reduction in cash purchases, as more people resort to digital and virtual payments. There is a possibility that higher levels of consumerism and digitisation may be accompanied by a reduction in the number of retail outlets, which of course will have several consequences for the real estate sector, as well as governance issues like planning of roads and parking.
Despite these logical and visible changes, can we truly expect India to become a strong ‘consumerist society’? The question seems to assume that most people in the country are not fixated on consuming more goods. That is not the case. Everybody wants to have better lifestyles than what they have. Individuals and families can do it only if they have the means (money) to acquire goods that will afford them greater comfort in their lives. It is therefore an unjust assumption to make and to even ask if India will become a consumerist society in the future. Consumption of goods has always been an important objective for most households, either in real terms or aspirational ones. People who had the money purchased goods, and those who didn’t desired to do so. This tendency will only enhance as incomes rise. Hence, the future of consumerism is good, and we can expect it to keep increasing.
Economic policies by the existing and future governments will play a major role, and policymakers have to pay attention not merely to enabling more manufacture of consumer goods, but to ensure adequate infrastructure such as housing, drainage, roads and transportation.
While expenditures on such items will increase incomes and employment, it will limit the resources available for investment in the production of consumer goods. The problem for governments will be to ensure that there are adequate financial resources within the economy for additional spending on basic amenities and infrastructure. More than this, the delivery systems have to be improved.
So, the limitations on the growth of consumption are the availability of resources for the manufacture of consumptions goods—resources to be freed only after we are sure that there is enough available to spend on education, health, transportation, housing, law and order, and other elements of a stable economy. Also crucial is our ability to improve the quality of governance, which is the basis for a stable economy.
We can expect a significant growth to consumption (increased consumerism) in the coming years. This will, as I said before, translate into higher employment across industries, and include large, medium and small-scale firms. Many items made today in the cottage industries will continue to have growing demand. However, most of the market will be controlled and served by the organised manufacturers.
In conclusion, we are a growing consumerist society, and we should not be apologetic about these trends. However, with climate change and the environment becoming an existential concern, the challenge will be to improve lifestyles without damaging the environment.
(This appeared in the print edition as "Craving Is Good For Us")
(Views are personal.)
S.L. Rao who headed NCAER for years, is considered a pioneer of quantifying and measuring the size of the middle class since the 1980s