Today, we have an affluent economy, with only a small fraction of our economies' output devoted to basic needs. Environmentalists say that we are reaching the limits of growth due to ecological constraints. Here in our cities, we have not only reached the limits of human needs but overshot them many times over. What we currently have in our metros is largely overconsumption or unnecessarily luxurious consumption which has many adverse consequences on us, on our economies and on our planet.
Economic growth is no longer improving our well-being. The extra time and energy that we must spend on healthcare, children's education, commuting and just keeping pace of changes are on the rise. The quality of our surroundings -- our neighbourhood, roads, civic infrastructure etc. are deteriorating even as more and more goods flood the supermarkets.
We have reached a point of counterproductive growth; additional growth now brings diminishing benefits while causing increased social and environmental costs.
As we urban Indians have become more prosperous, we have moved from consuming necessities to consuming conveniences to consuming luxuries. We are now driving to work one-per-car and spending many hours per week in bumper-to-bumper traffic.
This has severe environmental consequences. India's phenomenal economic growth of 9.5% per annum comes at the cost of farmers being deprived of electricity, of countless creatures of all shapes and sizes being deprived of their natural habitats and their food, of countless rivers and groundwater resources being both overexploited and polluted. Due to the continuous expansion of factories for manufacturing everything from cement to SUVs to cream-biscuits expand to meet the burgeoning demand, we overdraw on planetary resources and disrupt the fine web of life by cutting its strands.
But how can we stop? How to stop so many billion people from doing all the things they do in daily life?
In my mind, I keep searching for key points that are causing our present situation. I keep trying to identify places where the cancerous tumour, so to speak, can be clearly isolated from human flesh. Because these are the places where we can start cutting away surgically, methodically, without hurting too many people.
1) Consumer credit -- loans extended by banks for purchase of new vehicles and consumer appliances -- is one of the major arteries of this cancerous tumour. Easy loans affect our purchasing decisions. How?
Two calls from an aggressive marketer of car loans is all I need to make me feel that I NEED to step up from my family car to an SUV. I start believing that it is high time I bought a bigger car. "You can afford it, Sir," says the loan agent, sleazily massaging my ego into a full-blown erection.
I think about my employee who drives the same brand of car that I drive, thanks to the same loan agent's persuasion. Then I think about my neighbour's shining new Scorpio and think about how insignificant my own vehicle (read phallic symbol) looks standing next to it.
Some advice from my friendly chartered accountant reinforces this feeling: New SUV = more tax-deductible depreciation. Also, interest on loan installments is tax-deductible.
I reason: if I trade in my present vehicle, it brings down the price of the new one a lakh or so. Then I only need to afford the reduced EMIs (Equated Monthly Instalments) on the load. Can't I afford an EMI of Rs 12,000? Of course I can; what kind of man am I if I can't afford to pay a small installment like that?!
Besides, business is looking up; that new client who I have been pursuing for six months is almost in the bag. So what if he hasn't actually signed on the dotted line? His word is as good as gold.
That decides it: I just WANT a brand-new fuel-guzzler, and I want it NOW! Never mind the price, I can afford the EMI. Of course I can... Case closed!
2) Credit cards: Visa Power -- you've got it! If you have a credit card or two, you know what it means to be a really wealthy person, because you are able to securely carry large amounts equivalent to many months' earnings in your wallet.
And when you do that, you are potentially able to do all those wonderful, beautiful, generous things that you see in TV commercials -- things that can make your wife's heart go flutter-flutter, and that will make her give you that million-dollar smile. How about buying her that diamond solitaire? Or taking her out to dinner at the Taj Princess? Or booking the Presidential suite for your wedding anniversary? Or, better still, surprising her with a couple of air-tickets to Paris... Wow, that would be such a PRICELESS moment... just like they show in Visa commercials!
Credit-card bills? What's that? Oh, just a minor detail, that's all. Stuff that happens in the background, inconspicuously, as part of routine life. Life goes on, bills get paid... they always do. So let's not waste time talking about bills. Those airline tickets are one phone-call or one mouse-click away.
The point that I'm making here is: Consumer credit and credit-cards are the hot air causing the great big Economic Growth balloon to go up... and up... and up at the current rate of 9.5% per annum. Thanks to this banking 'reform', all of us are learning to increasingly live in perpetual debt, just like the Americans whom we all adore so much that they can do no wrong, not even in Iraq and Afghanistan.
Thanks to easy consumer credit, we are all borrowing from the future. We aren't only borrowing economically, we are borrowing ecologically. As the previous article points out, "Globally, we are demanding 1.3 planets to support our lifestyles this year, and yet we only have one planet earth. Each year, we as a global community place demands on cropland, pasture, forests and fisheries that goes beyond their capacity to generate resources and absorb wastes. We are using more far more than the planet can regenerate in a year."
Conclusion: At an individual level, we should stop buying things with credit, and stop using our credit cards. It is worth cutting up our credit cards. Let us stop borrowing for the future.
And as a community of concerned citizens, let us lobby for a clampdown on consumer credit. Let us write to the government, to Reserve Bank and to individual banks and bankers.
Let each person in the banking industry be targetted with this message: Cap and roll back. Let us ask for a freeze of consumer credit at current levels this year, and a 50% reduction in the amounts of credit given each year. This would give the economy about three years to adjust to the changing scenario. (Three years is 36 months -- far more time than the economy and its stakeholders get for adjustment when the stock-markets crash or a bank collapse which happens within a few weeks time.)
Do you think there is truth in this argument? If so, please help by spreading the word.
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Satyam Eva Jayate: Let the Truth Prevail.
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