These jholawallahs must be crazy. Petitioning the government every now and then against raising petroleum prices despite international crude oil prices going through the roof. Ugh! when will the gods drive sense into these commies, I wonder. Come to think of it, for the best part of my working life, I was bussing it to office. Petrol prices were dirt cheap then at less than twenty bucks to a litre, but I could ill afford the luxury of driving to work. Why, I could ill afford a two-wheeler, leave alone a car. Then, the prices began to spiral. But even before it breached the Rs 30 mark in mid-2002 after the administered prices regime was dismantled, I was already driving a 4WD to office and back, averaging a good 100 km a day.
And now that it’s gone up further, crossing Rs 40 to a litre, I am actually doing it twice over. Between us, a working couple at home, we drive two cars to office, doing a minimum 200 km a day out of a common family kitty. There are others too. Suburban DINK families driving into the city. On their own. For comfort and for space. And for work-hour convenience. Somehow, petrol prices don’t seem to matter. And the carpool never works.
Why, come to think of it, between June 2002, and now, when petrol prices in Delhi went up from Rs 29.94 to Rs 40.49, car sales across the country went up from 509,088 to 819,918. In fact, back in 1997, when I first bought a car, only 388,015 cars sold all over the country. Obviously, many families, like mine, are driving two or more cars to work and leisure. In fact, why just cars, two-wheeler sales too have gone up by huge numbers. Which is why you no longer have the rookie bussing it to office because his wages are no longer pitifully low. There are so many more people driving cars and bikes and scooters and they no longer need a bus. And carpools still don’t work.
Have you ever asked yourself why this is so, even as you ruminate over rising petrol prices? Or have you asked why has electricity consumption gone up; why are many more people using LPG stoves to cook, why are so many more people flying in and out of cities? Why petrol consumption in the country has gone up by 1.7 million tonnes in the past five years; why the sale of petroleum products has gone up from 100 million tonnes to 112 million tonnes?
I am no economist to explain this funda. But I can bank on common sense. One simple reason why we are making do with more two- wheelers and cars despite rising oil prices is that we are earning so much more and so much more willing to spend. Because that’s exactly what makes life that much easier for us. Now come to look at it this way, India’s average per capita income grew from Rs 17,823 in June of 2002 to Rs 20,989 around the summer of last year. And most of us, car users, ended up taking much more money home than every other Tom, Dick and Harry, to spend on what our previous generation considered unwanted luxuries of life. But with rising incomes, that attitude has changed. And with changing attitudes, we are capable of earning that much more. So, despite prices going up that much higher, our ability to spend has begun to rise as well.
There’s a simple pointer to this: while our per capita earnings grew a good 18% between the summer of 2002 and 2004, prices, measured by the whole sale price index rose 11.43% in this period, sparing us so much more cash. Never mind the rising petrol prices, that while having gone up 19.27% over the past two summer, still accounted for a modest 7% of the rising prices.
So, what’s making this happen? Why didn’t our fathers live in such interesting times? I can sense one reason for that. Our fathers grew up in a marketplace that was driven by agricultural and manufacturing incomes. And in that society of yesterday, the labour of human body determined how much one could earn. We live in a knowledge society now. And knowledge incomes are driving the way we live. So, our productivity is no longer a hostage to our muscles; instead, it’s driven by the power of our individual and collective minds. And when you get your minds to work, there’s hardly a limit to returns. Because you are investing your knowledge capital that can only grow over time.
Now knowledge equity has this one thing about it, it’s not trapped in the cyclical vagaries of time. Which is why, you are more secure about your future. And you are willing to spend that much more, knowing fully well that you can beat rising prices or petrol or whatever, by the power of your mind. So, you don’t mortgage your today in the fear of tomorrow. Go, take a long drive out on the highway or wherever. And raise a toast to liberalisation, to the knowledge era. It doesn’t really matter if the prices go up again. Go, drive!
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