The Otherside of the 'Devaluation of Money'

Last weekend I had been to a shopping mall with my family in Bengaluru. Being the long weekend there was a solid crowd to create the atmosphere. Now-a-days Malls are the meeting addas of young generation boys and girls and can even be attributed to fashion streets. To add to it, there was a big discount sale as well was going on on all the products, which is being continuously announced over a microphone on all the 4 floors. The mall comprises all types of goods. You ask for anything it is available in one or the other corner of the building. Be it an electronic good, home appliance, grocery, toys, cloths, ceramics, modern kitchens, etc... etc. In fact, malls are called the modern world entities to showcase the growth of economy.

People were buying things as if they have to starve without them. It reminded me the 'Do or Die' slogan. To add to it there were few offers like, buy 1 get 1 free or buy 2 get 1 free. The arrangements were so neat and clean and above that the goods are manufactured to look so eye catchy that anyone who looks at them, (though there is no need) feel like owning one, two, :) I don't understand how can everyone need same thing, same time? Do they really need them? Or is it just hype created with strategic marketing?

We came home after peeping some time with a promise to get one vacuum cleaner next time. Even long after coming home I was still thinking about the crowd. And I was analysing the human behaviour. Here is my analysis. Please let me know your opinion about it. I mean, do you agree with me or you have a different opinion.

I believe that all of us have heard the term 'Devaluation'. Yes, of course every one of us knows about it. When it comes to economics then in the last few years 'Inflation' and 'Devaluation' are the two words we (mostly urban and middle class) have used. If Inflation is out of control then it damages the economy and sucks the middle class budget. Where as Devaluation is the term used in international currency exchange. When Indian Rupee or any currency for that matter loses its purchasing power (in comparison with the other currency) in the international market is called 'Devaluation of Currency’. In last 20 years, the devaluation of Indian Rupee is more than 120%. In 1990-91 $1 was equal to Rs. 18, where as it is close to Rs. 50 at the end of the year 2010. In other terms, say we had to pay Rs. 18 to purchase 1 kg of sona masuri rice, now for the same we have to pay Rs. 35-40. Fine, this is just for our understanding. But the point I wanted to bring out is another kind of devaluation of Rupee, i.e. 'Mental Devaluation of Money'. I am not getting proper jargon to name it. Let me know if you get something.

You would be thinking that ‘what is this MENTAL DEVALUATION OF MONEY'? Let me explain you. See for e.g., we know that preparation cost for a cup of coffee/tea is maximum Rs. 5 and we are paying Rs. 5 to consume it. It is all well and good till here. Say, to the same cup of coffee/tea some one charge Rs. 8 in a posh hotel is still not bad. Now, someone charges Rs. 20 for the same and people are cribbing but still going and having it. Not once, but every day. What do you call this stupidity? It is called 'Mental Devaluation of Money' that means the person who is paying for it Rs. 20, does not have any value for money. He doesn't care. It is a prestige or status symbol for him to buy costly things.

If it is just to accumulate precious things and also it is agreeable if the price tag matches the cost of manufacturing. But no, there is no tally between manufacturing cost and the price tag. Then is it correct to buy such things, that too again and again?

There are people who never even look at low priced quality products. Even their kids will go for high-fi merchandise, though they do not know the value of the product. This kind of attitude and extravaganza runes the kid’s character and builds carelessness and unaccountability. At the end of it money looses its significance in such people’s life. It is devaluation of both money and morality.

Don’t ever think this is the story of upper class. No, no, don’t be in such a wrong notion. Now it is the saga of all middle class and upper middle class families as well. It is the positive-turned-negative impact of globalization. Now-a-days every one wants to live king size life, though they cannot afford it. There are financial institutions, credit cards, easy loans which provide the sources to try an extra mile in their spending. And this is what is due to influence of western spending culture. I feel you do agree with this. We are in such a world where even if we do not have money today, we have many sources where we can get money, spend and pay it later with interest. It implants human nature like, whatever I like, need it, now and I know how to get it.

I’m not against spending; I’m only concerned about the money which we are spending on unnecessary stuff, which is nothing but waste of money.

I am not telling that people stopped saving. No, still lot of people save lot of money. India is still a savings economy. But, look at the urban and semi-urban youngsters of 20-35 age group, many of them spend lavishly. Where unaccounted spending is one thing, unwanted spending is the other thing and spending more than the worth of the commodity/service is the third thing.

This has become a culture and others are taking advantage of it. Let me tell you there are three types of open/day loots now happening around us. First one is in the name of Health, second one is Food and the third one is Education. Let us discuss them in short. And it is the culture of urban and semi urban I am discussing here.

If some one gets fever, generally he consults a doctor. As usual the Doctor prescribes lot of tests (still many a time cannot diagnose the decease) and medicines and advises rest. Say, which will add lot of expenditures to the pocket. Above that if you have health insurance means that’s it; you will be considered well to do and loot will be double or triple. I am not telling that you should not get better treatment. Better treatment is different where as expensive treatment is different. We are talking here about the expensive treatment. I am just pointing out the level at which the emotional blackmailing happens on the sensitive issue like Health.

So, it is the same case with Education. There is no account for fees and donations in private schools. Even for pre nursery it is around Rs. 50,000 p.a. There is no controlling body on school management. The managements charge vehemently as they want, in the name of building, books, uniforms, shoes, amenities, etc, etc, People rather than objecting it or boycott such schools; they started considering it as social status to send their kids to such schools. The one, who wants to boycott them, not left with much of choice.

When it comes to food, there also it is same, like, unreasonable rates of groceries, food items and vegetables. People still willingly ready to pay for it in the name of hygiene, cleanliness and status. Once in a while, it is fine, but how good it is daily, weekly? We make too much noise when the price of vegetables increase but it hardly bothers us when we are generously spending on parties.

Adding to the list, there is one more thing, and that is ‘Standard of Living’. Do you know how much today’s generation spends on this? It spends around 20%-30% on this. In fact, it is one of the major spending aspect / area, where it could be cloth, house, antique, sofa, etc, anything you take for that matter. People want the best and ready to pay the amount printed on the price tag irrespective of its manufacturing cost. O No one is ready to do self introspection thinking that why it is so? Is it worth spending so much money on it? Then the other person in his circle or community follows him or gets mentally prepared for even more expensive one. It even patronizes corruption. The one who is rich will pay more money for simple thing and it becomes a practice for the receiver and sets an expectation for him to anticipate the same treatment from everyone, which ultimately leads to corruption. We have to think a twice before paying more for the service or to get something from someone. It will pinch you as well as everybody down the line.

In specific, the inflation caused by ‘Mental Devaluation of Money’ is more dangerous than ‘Actual Devaluation of Money’. On one hand it pushes the middle class’s purchasing power down and further down and on the other hand it collapse the poor class. It is the individual who has to judge and decide what best suits his pocket stop going by just brands and hypes. But unless we apply break on this mad race and subconscious spending there is no end for consequences of inflation on normal life.




-- K. Kalyan