Consumption Economy

• Evolution: Vanity and prosperity have been part of human existence since ancient times, as seen in bead jewelry from 1,50,000 years ago.
• Status of India: Today, 90% of Indians lack discretionary spending power, living on basic necessities. India seems to be reverting to 1970s socialism, where ostentatious living was discouraged under Indira Gandhi.
• Income Disparity: Out of India’s 143.80 crore population, only 13.14 crore belong to the “consuming class,” enjoying a standard of living beyond basic dal-roti survival.
• Economic Boom of the 1990s-2000s: Liberalization under Narasimha Rao & Manmohan Singh created a booming middle class. 
  • Global brands, malls, dining, travel, and luxury goods flourished—a stark contrast to the pre-1990s era. Rising incomes fueled economic growth, creating millions of millionaires.
• Declining Prosperity: Despite record-high disposable incomes (₹29.7 trillion in Dec 2023), inflation has eroded purchasing power. ₹100 in 1950 equals ₹10,226 today, reflecting a massive loss in real value. 
• • Policy failures and flawed economic strategies have stifled consumer spending and prosperity.
• Comparison: India’s household consumption expenditure is lower compared to the United States but higher than China’s. 
  • As of 2023, household consumption accounted for approximately 60.34% of India’s GDP, a slight decrease from 60.94% in 2022.
  • In contrast, the United States’ household consumption expenditure was about 68.18% of its GDP in the fourth quarter of 2024.
• Ground Reality: Leaders manipulate economic data to project a false sense of progress. While blaming the Gandhi family for past failures is outdated, current governance must address the pressing economic crisis.

Way Forward

• Consumer Confidence: Hindutva may have united the nation, but excessive penny-pinching weakens morale. Life is not just about survival—small luxuries matter. Economic policies should empower people, not restrict spending.
• Retail Therapy: Consumer spending fuels the economy and uplifts national spirit. Over-regulation and high taxes discourage spending and economic activity. When the going gets tough, people need financial flexibility, not austerity.
• Balancing Fiscal Responsibility and Growth: Good governance must ensure financial discipline without stifling prosperity. 
• Job Creation: The focus should be on job creation, affordability, and purchasing power. 
• Growth: Economic policies must aim for growth, not just cost-cutting measures.

Conclusion

India must strike a balance between cultural nationalism and economic progress to ensure its people thrive, not just survive.

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