Yes! I call them the ‘Sandwiched Generation’! They take decisions to please their parents and manage finances to provide for their children.
No private holidays and romantic dinners for them…it costs more than the monthly school fees for the child or conversely more than the monthly dose of insulin for parents.
Welcome to the world of middle class Indian wage earners who earn just about enough to attract the highest possible tax bracket and qualify as the so called “well to do people?” in their careers.
But they are the ones who make no choices when it comes to deciding how to spend their money as the decisions are already taken –for their parents or children. The monthly spend ’s budget is decided by the Pharmacist, prescribing medicines for parents or the schools, charging fees for children. The choice of restaurant is by children and choice of movie is by parents and children put together.
No-no this is not a grief muck of our sandwiched stalwarts, it’s about calculating what they contribute to the national economy, measured with a hypothetical calculation of their contribution to GDP. The middle class wage earner spends about 20 of his 100 earned on parents, their food, medicine etc. and another 20 on children for their education, upbringing etc…The 20 on parents generally funds the senior age-group medicine companies, diagnostic centres and our dreaded messiahs the doctors. The 20 on children generally funds the ever growing fortunes of private schools, tutorials, children’s magazines and movies. The multiplier effect of this Indian domestic consumption matrix makes our economy so complex and fulfilling that the Lehman Brothers of the world don’t cause much discomfort in real terms. This is our strength and we should do everything to keep it the way it is and we do! We teach our children right from their childhood that taking care of parents is what they study for, it’s not about contributing to mankind by creating solutions or jobs; it’s about buying those medicines that our parents need….
When it comes to children, we Indians are anyway ahead of everybody else…when the world speaks about nutrition and holistic developments, our middle class goes much beyond that and plans for what to pass on to the children in terms of houses, cars and yeah, of course…THE CASH!
Well, these are just the value systems that we have. Can the government policies, in terms of Fiscal Policy, play a role in fuelling this domestic SANDWICH ECONOMY even further by reducing the pressure on the middle class to some extent, by including some tax savings for this generation? You will say, it’s nothing new we already have children’s education allowance. Of course we do! – Rs.100 per child per month. That’s a little less than the NREGA daily wage rate. The middle class child spends Rs. 100 on his daily dose of crayons and note books…come on! The Finance Minister wake up!
Make it Rs.1000 per child per month straight away. That’s what you spend realistically on a child’s education per month at least most of us do…
We are a country with practically no social security in place for senior citizens…by allowing massive tax sops to middle class bread winners, in return of them taking care of their parents, aren’t we inducing our own social security system at the same time increasing the aggregate demand in the economy… It’s not about copying the best social security system of a developed country in our country and then getting crushed under the financial burden to fund it… let’s find our own very internal self-sustaining system to fund it Well it is India! And our tax babus will argue that given the tax saving nature of us Indians we may invent and identify parents in order to save tax…Let that be!... At least there will be a reverse search of PARENTS TO ADOPT! At least to save taxes! We anyway have a habit of paying 12% interest rate to housing finance companies to save 10% tax…we just don’t want to pay them! Tax I mean. We may find some parents somewhere; take care of them in some way and save some tax. This will increase the domestic spend on elders, fuelling the overall demand on senior citizen products like medicines and low calorie food which will bring additional tax revenues anyway. In the process we will have our very own SELF SUFFICIENT SOCIAL SECURITY SYSTEM in place…the SANWICHED GENERATION!!! I hope someone in the finance ministry or the one being voted soon is listening… To good times! RR