PEOPLE NEED TO CONSERVE RESOURCES ON HAND

The 2009 is going to be a difficult year, despite optimism from Government of India. All indication points out to a tough time. Of course, it is true that tough time does not last forever but tough people do survive always. This is the time for survival. Almost all the developed countries are reeling under crisis. America is going through a most challenging time. The President Obama has convinced his congress for approval of stimulus package yet the very foundation of capitalism is under pressure. We would not be surprised if within ten years the condition of capitalism takes the route of Russian Socialism. Unemployment situation of America is mounting up. The growth of GDP has turned negative. Lots of educated persons have become jobless. The president is publicly criticizing corporate Houses for payments of fat Bonus to senior employees when large numbers of people are in distress. The condition of Europe is even worse. The expert opinion predicted that some European nations may experience the condition of poverty after long years. With such a condition of developed countries, export from India is going to be badly affected. Unemployment and job loss would be inevitable in our country. What is to be done now?

In India, of course, the conditions are not so depressing. Yet the global economic turmoil will affect Indian citizens too. There would be no bank failures, a few industries might close down. Unemployment will rise; export sector would no longer be a money spinner. Indian industry shall have to depend on the internal market. Since domestic market is large it would support those Industries which produce commodities of mass consumption. Investment would provide low return for another few years. The economic growth would fall below 7%. At this moment most pressing need for middle class would be to conserve money. How to do that?


It would be foolish to take out invested money for that would mean definite loss of wealth. A day would come when market would jump on its feet and people who have patience would reap the benefit. This is the time to conserve money by minimizing avoidable expenses. This is the time for middle class to be prepared for difficult time for another three years by becoming frugal in their habits. Don’t buy expensive Cars, unless it is most essential, don’t take luxurious trip for sightseeing. Check the habit of eating out and throwing lavish wedding parties to show off. Do everything with moderation. You would need money to keep your body , soul and emotion together. Do we have to stop investing?

Yes, for the time being keep away from bulk investing in equity. Those who have continuous flow of money like that of Doctors, advocate, creative people and self employed need to conserve money in FD of good bank and also in Arbitrage fund. For taking IT (80 C) benefits invest in PPF, Bank Fixed deposit and senior citizen scheme. An investment in good ELSS fund could be made through SIP only by younger investors. No lump sum investment should be invested in equity. If you must invest then do it through SIP. Buy Nifty & Gold ETF. You would need money for food, children’s education, health; payments of property tax or rent and to buy cloth etc. (avoid buying unnecessary expensive garments and shoes). During the period of depressing economic condition the best vocation remain connected with Health & food industry. Most of the time food & health product defy down turn. Perhaps all of us remember that Lee Iacocca’s father advised his son to join butchers trade when he lost his job as that was depression neutral area.
The effect of depression would penetrate our country suddenly. This is the time to forewarn middle class to conserve resources. Some time they behave like an Ostrich. In fact Indian middle class are exceptionally brilliant but most of the time they remain engrossed in day dreaming. Once they are awake they generate tremendous ability to protect themselves from any onslaught. Many people asked when the situation would improve ? It is difficult to predict. However, according to a proverb tough time doesn’t last forever, but tough people do. Let us hope 2012 would be the year of bright sunshine.

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