How the other India lives and spends

A close friend's better half (BH) was distressed the other day. Their driver had asked for a loan of Rs100,000 and he already owed them over Rs40,000, a part of what he had borrowed exactly a year back for his daughter's wedding. He had spent Rs2 lacs on his daughter's wedding - a considerable sum, in general and surely for Lakshman - the driver - who earned about Rs7,000 per month.

"He takes us for granted and your friend never tells him anything. This time also he has agreed to give him Rs85,000," complained the BH.

"What does he need the money for now," I asked.

"For the bidaai ceremony," replied BH.

Seeing my open mouth, BH elaborated, "Lakshman's daughter is going to her husband's home for the first time after her wedding. There is a ceremony associated with this and therefore Lakshman is going to spend the said amount primarily on gifts etc."

It set me thinking. Exactly eleven years ago, I had spent all of Rs75,000 on my wedding and honeymoon. My wife's father would have spent a slightly larger sum and as some readers would know, the bong wedding has two parts to it - the wedding day at the bride's house and a bou bhaat (bride's feast) on the third day of the wedding at the groom's place. Typically expenses at each of the locations is borne by the respective families. I am giving this preamble so that readers do not presume that my in-laws were spending on my behalf. I could not afford to spend more because that is what my savings amounted to after four years of hard work and numerous weekend binges with my college mates.Obviously I was loathe to borrow and did not want my retired parents to burn a hole in their pocket.

Why does Lakshman want to spend way beyond his means? It has to do with what the biraadri (community) will think and say if he does not spend. If he does not spend then he will lose face in the community and this is the prime motivation to spend and get into debt, which he can hope to clear over a few years in the very least. I, of course, did not care two hoots about what the biraadri (community) said. I could afford to do that with my parents living in urban Calcutta (now Kolkata) and residing in Mumbai.

Is my friend encouraging his profligate spending by advancing him the money at no interest? No. If they don't give Lakshman the money, he will borrow it from a money lender at usurious rates of interest - ranging between 100-120% pa, a burden he is unlikely to recover from in a long long time. It is much more sensible and humane to give him the loan rather than have him get into the clutches of loan sharks.

But how does Lakshman even think of asking such a large loan from his employer? Would some Lakshman have done the same ten years back (that is as long as I have had a driver)? IMHO the increasing economic disparity and the increasing conspicuous consumption by middle and higher income group people, means that people like Lakshman have far better sense of their employer's spends and spending ability. He knows that his boss has bought this half a million dollar apartment (Rs2.5 crores) in suburban Mumbai, owns two cars (and changes his car every second year) and shops in glitzy malls every weekend, and surely then he can give him a loan of a lakh of rupees (couple of thousand dollars).

Looked at in this context Lakshman's demand is not as outrageous as BH would think it is. It is unfortunate that Lakshman will spend the money on what many would look as wasteful expenditure and not on acquiring an asset or educating his children or anything that promises a better tomorrow for him, his wife or his children. As he looks into the future, there is very little ray of hope. For him, life still remains a struggle to make ends meet even as wage growth in India is the highest in the region according to various surveys. I can only hope and pray that Lakshman's daughter is happy in her marriage.

PS: What would I have done in my friend's place and why? I am sure I would have behaved in much the same manner (and in the past I have). Apart from being compassionate (like my friend and his BH), there is another factor probably working subconsciously. Everytime I see a crime committed by a first time criminal, somewhere I know that people like us (PLUs) are potential targets. This hit home in Kolkata last weekend where Ravinder Kumar Luthra was brutally murdered by their domestic help of ten years. A six year old kid was kidnapped and brutally killed in a distant suburb of Mumbai and the murderer was well known to the family. Somewhere down there even I am scared. Irrespective of the walls that we build around ourselves to protect us and to keep out people like them (PLTs), we have to be mindful that at one level we remain vulnerable. And for a few thousand rupees I would rather have relatively happy people working for me rather than worry everytime my son or daughter is driven alone by the driver. Is this a form of insurance? May be and again may be not, but certainly it buys some peace of mind.