- During the recent Mann Ki Baat monthly radio program, Prime Minister Narendra Modi touched upon a topic that is not only one of the significant occurrences in the lives of people but also the one contributing handsomely to the GDP growth. To enter wedlock locally rather than reach out for destination weddings. Especially, local consumption acts as a great stepping stone for Indian economic activity in the overall scheme of things. We are aware of the usual paraphernalia associated with the Indian wedding. As experience suggests, none of the families, irrespective of their fiscal conditions will spare any efforts to ensure the wedding is organized in the grandest possible manner.
- In fact, most families would not mind shelling out their life savings to ensure the wedding passes off grandly. Since the Indian wedding is considered no less than a memorable milestone in ordinary people’s lives, the occasion assumes greater importance leading to the loosening of purse strings to cater to several expenses associated with the same. This hugely contributes to the nation’s GDP. Further, consumption, economists’ term for spending, always evokes mixed reactions. It’s essential but questions of where and how much can trigger strong reactions, nonetheless.
- As mentioned above, PM Modi in his latest radio chat frowned on super-rich Indians shifting their big, fat weddings abroad. Were all these big shaadis held in India, the local economy would have benefitted, he said, dovetailing his critique with his government’s Vocal for Local economic philosophy. Is the PM on the button here? Remember, back in 2007, then PM Manmohan Singh, in a CII speech, had told corporate India to avoid vulgar displays of wealth, televised images of which were being beamed into India’s villages. Interestingly, included in Singh’s list of such displays was the level of ostentatious expenditure on weddings.
- Singh, like Modi, had linked weddings and consumption to his government’s goals, which included the mantra of inclusive growth. Of course, consumption has been the focal point of economic research as well. Notable is its obvious importance as an economic activity, and second because of the many layers attached to it. Thus, the statement conspicuous consumption doesn’t have to be always over the top. India’s evolutionary path is different, though. Welcomingly, consumption patterns have changed dramatically over the last three decades after economic liberalization. Good growth didn’t just open many more avenues for economic mobility but also changed social attitudes.
- Looking back, what Singh said in 2007 was reminiscent of the old Indian socialist notion of frugality. What Modi said now is an upgrade -conspicuous consumption by itself is not a problem, shifting the spend abroad is. Agreed, consumption is the mainstay of the Indian economy, contributing around 60% of GDP. India’s geopolitical heft comes from the scale of the domestic market. No one wants to be locked out of a market where millions will soon be added to the burgeoning middle class. Modi need not fret as the bulk of rising consumption will happen here, including that for weddings. Conversely, the very wealthy will inevitably spend some of their riches overseas. This will not alter the equation very much.