The Hindu Business Line : Financial independence and a dose of self defence

Story so far: Post-Budget analyses may seem endless but there is a lot one can learn from experts, both about micro and macro issues. While it is heartening to know that we in India save almost equal to what we invest, in China they save and invest at double our rate. I wonder how it would be if we were able to match the numbers of the Dragon Land.

Episode 119

Responding to the savings discussion, Pankaj Sharma writes from Delhi, "Swati, do you know the net national saving rate of the US?" No, I don't, though I'd like to know. "The combined savings of individuals, businesses and the government after adjusting for depreciation fell into negative territory at minus 1.2 per cent of national income in late 2005," he adds, citing Newsweek.

"Their saving can't cover even `the replacement of worn-out plants and equipment,' forget investment out of own funds." In comparison, we are far better off, says Sharma.

In absolute terms, however, the US seems to match China's savings. "Last year China saved about half of its gross domestic product, or some $1.1 trillion," informs Stephen Roach of Morgan Stanley in a story posted on http://money.cnn.com. "At the same time, the US saved only 13 per cent of its national income, or $1.6 trillion." Though the US economy is six times the size of China's, it can't manage to save even twice as much money, adds Roach.

Meanwhile, Raghuram Rajan has pointed out that it would be disastrous if the US were to begin saving more! How? Because "many countries have become hooked on US consumption and import demand," as Mike Dolan writes on http://today.reuters.com.

Rina Talwar has mailed a link to the latest survey by ACNielsen on `Consumer Confidence'. It shows that for 50 per cent of Indians, saving money is a priority, like most other countries in Asia. "More than 40 million in India already have the same purchasing power as Americans," writes Shehla Raza Hasan on www.atimes.com, reporting about the survey. One learns that China's currency is artificially low in value.

"Economists estimate that one Chinese yuan can buy as much in China as $4.60 can buy in the US, so $60 billion worth of investments there has the same impact as $276 billion in the US."

A post-graduate driver

At a micro level I began saving a little by using public transport instead of using my bike. It has been difficult to find supporters for the idea. For instance, when I suggested to Gupta that the office should pay conveyance allowance to eco-friendly commuters he thought I was mad.

Instead of carrying on with the argument, I told myself that I should prove with numbers why it made sense to weave sustainable thoughts into office rules. Wouldn't it be progressive if a company were to build incentives that encouraged the use of public transport?

Own bike, however, comes handy when public transport is very erratic, and comes by too crowded to board. One day, I lost my patience waiting for a bus that didn't come and stopped an auto-rickshaw. "Gemini," I said, getting in, and it was only after I sat that I noticed that a lady was in the driver seat.

During the short trip, I came to know that her name was Urmila and that she had finished post-graduation in economics.

When I suggested that she was too overqualified to be a driver, she said, "What's wrong in driving? I make more money than what I earned in the private companies that I worked in. Salary was not enough to make both ends meet, and now I'm my own boss!"

Urmila had her eyes on the road, and driving smoothly, without frightening either the passers-by or me.

She had the mandatory uniform on, and the vehicle was equipped with a first-aid kit. Plus, the interior of the auto was tastefully decorated to make the ride pleasant. "I do school trips. I make about Rs 3,000 a month. If I start working as a full-time driver, I can surely earn more," said Urmila.

I asked her, "Have you undergone any special training?" She nodded, "Yes, akka. After my father taught me driving, I attended a six-month training provided by the Institute of Road Transport." I interjected, "To know traffic rules?" Urmila replied, "More than that, we also learnt a bit of mechanical engineering, first aid, public relations and yoga! Which means, I can change a flat tyre without anybody else's help."

Just then a motorcycle with two college boys sped by the side of the rickshaw. They were ogling and teasing Urmila, as if it were a strange thing for a lady to drive an auto-rickshaw. But she didn't seem to pay attention. After the bike left the scene, I asked her, "Aren't you afraid?" She shook her head and said, "One more training I underwent was in martial arts. I have a black belt."

Is it becoming increasingly necessary for women, not only to be financially independent but also be armed with self-defence skills, I thought? Send in your thoughts by Friday.

Swati_CA@hotmail.com

For archived episodes of this column click on: htpp://www.thehindubusinessline.com/nic/swati/index.htm)