Disposable Income

The ongoing global financial crisis has affected the growth of Indian economy as well. However, a recent study shows increased footfalls in malls and big format stores, this is evident enough to show that the gloomy economic scenario is fast diminishing. When the owner of India's largest chain of retail stores agreed that sale for big ticket products such as television, air conditioners has improved since the beginning of 2010 as compared to the previous two quarters. So what really is this disposable income? It has been defined as the amount of money balance with an individual after paying taxes; this money could be utilized for investments as well as for expenditure on purchase of various daily and luxury products. With more than 50% of population below the age group of 40 years, there are many individuals with a high disposable income who are ready to spend on luxury brands, travel to exotic holiday destinations and luxury realty. Yes it is true that many young professionals are now spending extensively not only for buying a luxurious residential place but are also investing in second homes that are away from the bustling city life. These are weekend / vacation homes. Says Jay, an analyst with a finance company "as small children we used to travel with our parents during vacations and it was fun. Our parents never had hectic work schedules and stringent deadlines to meet so a vacation once in a year was good enough for us. But with our current lifestyle wherein we work for more than 65 hours a week, it is necessary to de-stress and detoxify ourselves frequently and that is why it made sense in investing in a property at a serene location on the outskirts of Mumbai city. And when I don't use it I put it up for rent for overnight stay to other weekend travelers. " This is not unusual for people living in cities like Pune, Bangalore , Hyderabad, Lucknow etc where realty rates are moving northwards. The most favorite place for investing in realty for individuals with high disposable income is Goa. The place is not only popular among the Indians but is also a hot favorite among international tourists and owning a villa by the sea could prove to be a brilliant investment. Some of the factors that are encouraging investments in vacation homes are affordable realty prices, a promising scene for price appreciation, low maintenance cost, easy accessibility by road and air transportation, and beginning of immediate and high return on investments. Apart from realty, there has been a sizeable growth in luxury products such as apparels, cars and international tourism package. The growing number of fashion weeks and an increase in the number of retail outlets of premium designer labels is yet another evidence of high spends on branded luxury apparels. Indian people have always been voracious consumers of movies made in English, Hindi as well as other vernacular languages. Irrespective of the downturn of economy some of the English movies such as Avataar and hindi movies like 3idiots have garnered highest revenues in the first two weeks of launch. An average Indian spends approximately Rs 500-800 per head for watching movies in urban cities. Similarly, an average Indian spends Rs 150-200 for watching in the smaller theatres. This is in complete contrast to a vast majority of people in 70s and 80s for whom a decent lifestyle meant spending money on basic necessities such as roti, kapada aur makaan(bread, clothes and house).Disposable Income The ongoing global financi...