destination india

Tuesday, January 31, 2006

save in grace

Saving is an art that very few have mastered. It was an attribute inbuilt in the growing up periods of the girls and a legacy they carried into their married lives. They learnt it from their mothers and grandmothers – keeping aside a handful of rice in a separate container every day or carefully hiding the leftover coins in an earthen pot under the cot or behind those large jars of pickles. These handfuls of rice and the loose coins were assets they could latch on to in case of extreme emergencies. These were the traditions in villages when banks had not invaded the interior heartlands.

Later, as people moved out of villages and settled in cities, they came to know of banks. They also learnt that locking up money is not a wise move; money has to move for it to multiply. Opening a savings bank account was the first step in this direction. People were encouraged to deposit those small coins and notes in the bank rather than keep them hidden from prying eyes – the incentive was an automatic addition to the kitty in the form of the annual interest. There were accounts for school children also and it was a novel method of propagating the message of ‘save for a rainy day’. Along with the regular savings bank there were recurring deposits and fixed deposits. All these were voluntary schemes. However, the provident scheme was a forced saving thrust upon all salaried persons. The intention was to ensure that at the end of his service period or in case of untimely death, there were adequate funds to fall back upon. A modified version of the provident scheme was the public provident scheme where both the salaried and the non-salaried could deposit money. The returns were attractive when the saving in income tax is also taken into account.

However, over a period of time, the concept of saving has changed. In the age of plastic money, when swiping the credit card to record transactions is more fashionable, hardly any one saves for the rainy day. They become members of groups and these groups take care of sudden needs of finance – the repayments are spread over a period of time. Whether it is hospitalization or holiday travel, the tendency now is to have it, then pay. Not like when the philosophy was – first have the money, then spend it.

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