The funnel effect:
Regarding the tendency of single children, you have raised a very important issue of demographics, one which I have thought a lot about. This is commented upon a lot in China. In India also this will be seen, but is not recognized
Our own parents had only 1 or 2 children. The current generation of parents are having a lot of single children, which you can see among your own circle. This means that many children are going to grow up with the financial might of both their parents behind them - and since many of them also are single children, the financial might of 4 grandparents are also behind them. Adding their own abilities, the productivity and wealth of 7 people are going to be consumed by a single person - because both parents and grandparents are from a previous generation of thrifty and hard working people who accumulated (in real estate and gold) instead of consuming.
If two such single children get married and have another single child - the financial might of 15 people will be channeled into just one person. The buying power of such a person will be quite enormous. He or she will be a millionaire at birth and only get richer because wealth begets wealth.
On the other hand, the number of people in the upper middle class segment will remain the same or even reduce - because the rate of attrition (because of smaller families) will be more than the rate of creation of jobs that pay really well.
This will also mean that more and more real estate will get concentrated in fewer hands with massive holding power. The rich will get richer while the poor will get poorer as far as affordability of real estate is concerned.
A lot of the real estate boom in China was because of parents buying apartments for their children. A lot of the real estate boom currently going on in India is also because of the same reason. Most of the empty flats in Dwarka and areas of Gurgaon - and those lying empty elsewhere in Delhi - are held by just such people. In many instances, the child on attaining majority or even before - is going abroad because he/she can afford it. The empty houses therefore just sit there.
Just think about your own circle and you will realise just how many people fit into this kind of situation. I call it the funnel effect - because the wealth of 2-3 generations is funneled into just 1 individual.
Regarding the tendency of single children, you have raised a very important issue of demographics, one which I have thought a lot about. This is commented upon a lot in China. In India also this will be seen, but is not recognized
Our own parents had only 1 or 2 children. The current generation of parents are having a lot of single children, which you can see among your own circle. This means that many children are going to grow up with the financial might of both their parents behind them - and since many of them also are single children, the financial might of 4 grandparents are also behind them. Adding their own abilities, the productivity and wealth of 7 people are going to be consumed by a single person - because both parents and grandparents are from a previous generation of thrifty and hard working people who accumulated (in real estate and gold) instead of consuming.
If two such single children get married and have another single child - the financial might of 15 people will be channeled into just one person. The buying power of such a person will be quite enormous. He or she will be a millionaire at birth and only get richer because wealth begets wealth.
On the other hand, the number of people in the upper middle class segment will remain the same or even reduce - because the rate of attrition (because of smaller families) will be more than the rate of creation of jobs that pay really well.
This will also mean that more and more real estate will get concentrated in fewer hands with massive holding power. The rich will get richer while the poor will get poorer as far as affordability of real estate is concerned.
A lot of the real estate boom in China was because of parents buying apartments for their children. A lot of the real estate boom currently going on in India is also because of the same reason. Most of the empty flats in Dwarka and areas of Gurgaon - and those lying empty elsewhere in Delhi - are held by just such people. In many instances, the child on attaining majority or even before - is going abroad because he/she can afford it. The empty houses therefore just sit there.
Just think about your own circle and you will realise just how many people fit into this kind of situation. I call it the funnel effect - because the wealth of 2-3 generations is funneled into just 1 individual.
1 comment:
Chandigarh is one amongst the planned cities in India.
The planned development in Chandigarh invariably has been a model for alternative cities of North India. Like every other city.
Link: Builders in Chandigarh
http://www.proptiger.com/builders-in-chandigarh.php
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