India still scared of FDI in retail.

[prasad1]

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Vietnam outgrows fear of FDI


ASHIS CHAKRABARTI IN HANOI
While Indian communists see only gloom and doom in FDI in retail, socialist Vietnam is all set for a boom in foreign retail beginning this year.


“Supermarket stampede” was how the country’s state-controlled national English newspaper, Vietnam News, described the expected retail rush in its edition of January 7.


French, German, Japanese and South Korean retailers plan to open new supermarkets or expand their existing ones from this year, taking advantage of the government’s decision to liberalise the retail sector further.


The first foreign retailers entered the country’s market about a decade ago. One of the first to come was K-Mart, finally ringing the curtain down on the American War (the Vietnam War to the rest of the world) in popular perception.


Metro, the German retailer, may have been lucky to open the only foreign retail store in Calcutta a few years ago, thanks to Buddhadeb Bhattacharjee’s reform initiative. But here in socialist Vietnam, the company plans to open 16 new supermarkets to make it 35 nationwide, according to the Sai Gon Dau Tic, an investment newspaper based in Ho Chi Minh City. South Korea’s Lotte Mart plans to open 60 supermarkets in the country by 2020.

 

[Iyyarooraan]

The pioneer was East India Company. Rather than fearing FDI itself, India fears the enticing trap the countrymen will get into on their own.

 

[prasad1]

A history of East India company talking over a divided weak country can not be equated with the 'gardner I contract with'.

It has been said that the British Empire was picked up in a "fit of absence of mind." Nowhere was this more true than in the case of India which gradually came under British rule.
The other factor pushing the British East Indies Company toward conquest had to do with the Mughal Empire. This dynasty had ruled most of India peacefully and tolerantly for a century since the 1500's. However, during the reign of Aurangzeb (1658-1707) all that changed as he started persecuting Hindus. Not only did this trigger centuries of religious strife that still continues, it also began the decline of the Mughal Empire, which suffered from weak and corrupt government from this time on. The resulting turmoil forced the British East Indies Company to defend its trading posts against local princes, brigands, and a new European intruder, France.


When the British came to India the Hindus were an oppressed lot. In addition they were compelled to pay the jizya tax. The fact is that the Hindus were second class citizens in their own land and the Muslim rulers who came from Central Asia ruled with an iron hand. Muslim rule was marked by mass conversions to Islam and destruction of Hindu temples.


The British Raj placed the Hindus on an equal footing with the Muslims and they were no longer second class citizens. The Hindus could now profess their religion and worship their Gods. The Jizyia tax was abolished. The Hindus also developed far more than the Muslims in the fields of education and commerce.


India is a dominent force in the world, and can allow and learn from others.

 

[sangom]

A history of East India company talking over a divided weak country can not be equated with the 'gardner I contract with'.

It has been said that the British Empire was picked up in a "fit of absence of mind." Nowhere was this more true than in the case of India which gradually came under British rule.
The other factor pushing the British East Indies Company toward conquest had to do with the Mughal Empire. This dynasty had ruled most of India peacefully and tolerantly for a century since the 1500's. However, during the reign of Aurangzeb (1658-1707) all that changed as he started persecuting Hindus. Not only did this trigger centuries of religious strife that still continues, it also began the decline of the Mughal Empire, which suffered from weak and corrupt government from this time on. The resulting turmoil forced the British East Indies Company to defend its trading posts against local princes, brigands, and a new European intruder, France.


When the British came to India the Hindus were an oppressed lot. In addition they were compelled to pay the jizya tax. The fact is that the Hindus were second class citizens in their own land and the Muslim rulers who came from Central Asia ruled with an iron hand. Muslim rule was marked by mass conversions to Islam and destruction of Hindu temples.


The British Raj placed the Hindus on an equal footing with the Muslims and they were no longer second class citizens. The Hindus could now profess their religion and worship their Gods. The Jizyia tax was abolished. The Hindus also developed far more than the Muslims in the fields of education and commerce.


India is a dominent force in the world, and can allow and learn from others.

Dear Shri Prasad,

I am not knowledgeable enough to comment on the points in your above post but it is better, I feel, to let the forum know about our actual experience during the last about one year.

In Thiruvananthapuram (we came in Oct. 1994) we had more than half a dozen people selling vegetables either as headload vendors or in ThElAs. The availability was good except some of the items like broccolii and all that, which we don't use anyhow. The prices were always about 25% more than what ruled just across the TN border and much costlier compared to the uzhavar chanthai in TNLY.

During the last one year or so the number of vendors coming to our doorsteps has reduced to a mere two, one of whom is a young woman who comes only occasionally. The lone old woman who subsists by this trade also now decides to stop it because people, she says, ask why such high prices and she ends up with the vegetables rotting and consequent huge daily loan (12% per day interest!).

The vegetable shop about a km away also has raised its prices very much and many items are not available on any particular day. The shopkeeper, a young man from TN, says the supermarkets drain the wholesale markets in a cartel sort of manner. For example green (unripe) bananas, a common item for us here, completely disappeared for about two weeks and then we could get it only in the supermarkets. But the price had gone up from roughly Rs. 20/= to Rs. 60/= and even Rs. 80/= per kg in the supermarkets! And we get only stale items because the fresh items are kept only in some posh outlets which are far away from our place.

My cousin from Delhi and my brother from Chennai also tell that prices have gone up because of the cartels but availability in the supermarkets even if far away, is OK for them; they spend on autorikshaw/car, while for me, it too matters.

Hence, whatever the arguments in favour of FDI in retail trade, I think it is like saying the demon is beautiful.

I only hope others have some better experience.

 

[Iyyarooraan]

There is a lurking fear that seeds are sown to weaken this country. People are alert and will resist without regard to current political thinking.

 

[sankara_sharmah]

Dear Shri Prasad,

I am not knowledgeable enough to comment on the points in your above post but it is better, I feel, to let the forum know about our actual experience during the last about one year.

In Thiruvananthapuram (we came in Oct. 1994) we had more than half a dozen people selling vegetables either as headload vendors or in ThElAs. The availability was good except some of the items like broccolii and all that, which we don't use anyhow. The prices were always about 25% more than what ruled just across the TN border and much costlier compared to the uzhavar chanthai in TNLY.

During the last one year or so the number of vendors coming to our doorsteps has reduced to a mere two, one of whom is a young woman who comes only occasionally. The lone old woman who subsists by this trade also now decides to stop it because people, she says, ask why such high prices and she ends up with the vegetables rotting and consequent huge daily loan (12% per day interest!).

The vegetable shop about a km away also has raised its prices very much and many items are not available on any particular day. The shopkeeper, a young man from TN, says the supermarkets drain the wholesale markets in a cartel sort of manner. For example green (unripe) bananas, a common item for us here, completely disappeared for about two weeks and then we could get it only in the supermarkets. But the price had gone up from roughly Rs. 20/= to Rs. 60/= and even Rs. 80/= per kg in the supermarkets! And we get only stale items because the fresh items are kept only in some posh outlets which are far away from our place.

My cousin from Delhi and my brother from Chennai also tell that prices have gone up because of the cartels but availability in the supermarkets even if far away, is OK for them; they spend on autorikshaw/car, while for me, it too matters.

Hence, whatever the arguments in favour of FDI in retail trade, I think it is like saying the demon is beautiful.

I only hope others have some better experience.

Sangom,

What you have stated has nothing to do with FDI in retail trade. It is the bigger retailer swallowing the smaller ones. This would not change even if we do not have FDI in retail trade.

Long back I remember that the Kerala Government had shops selling Vegetables. I remember there was one in Vazhuthacaud.

 

[prasad1]

Sangom,

What you have stated has nothing to do with FDI in retail trade. It is the bigger retailer swallowing the smaller ones. This would not change even if we do not have FDI in retail trade.

Long back I remember that the Kerala Government had shops selling Vegetables. I remember there was one in Vazhuthacaud.

Yes it is like trying to stop a raging river by plugging the hole in the dam with bubble gum. Or to protect the local supermarkets monopoly.
In the process loosing the efficiency of the market and hurting both the consumer and producer at the same time.

 

[prasad1]

In principle, governments should not prevent anybody, Indian or foreign, from setting up any business unless there are very good reasons to do so. Hence, unless it can be shown that FDI in retail will do more harm than good for the economy, it should be allowed.


A major argument given by opponents of FDI in retail is that there will be major job losses. Frankly, the jury is out on whether this is the case or not, with different studies claiming different findings. Big retail chains are actually going to hire a lot of people. So, in the short run, there will be a spurt in jobs. Eventually, there's likely to be a redistribution of jobs with some drying up (like that of middlemen) and some new ones sprouting up.


Fears of small shopkeepers getting displaced are vastly exaggerated. When domestic majors were allowed to invest in retail, both supermarket chains and neighbourhood pop-and-mom stores coexisted. It's not going to be any different when FDI in retail is allowed. Who, after all, will give home delivery? The local kirana. Why would anyone shun them?


If anything, the entry of retail big boys is likely to hot up competition, giving consumers a better deal, both in prices and choices. Mega retail chains need to keep price points low and attractive - that's the USP of their business. This is done by smart procurement and inventory management: Good practices from which Indian retail can also learn.


The argument that farmers will suffer once global retail has developed a virtual monopoly is also weak. To begin with, it's very unlikely that global retail will ever become monopolies. Stores like Wal-Mart or Tesco are by definition few, on the outskirts of cities (to keep real estate costs low), and can't intrude into the territory of local kiranas. So, how will they gobble up the local guy? Secondly, it can't be anyone's case that farmers are getting a good deal right now. The fact is that farmers barely subsist while middlemen take the cream. Let's not get dreamy about this unequal relationship.

Times_Of_India

 

[sangom]

I agree that middlemen are there, have been there for a long, long time and that the middlemen deprive both the producers and ultimate consumers, in everything from vegetables to even drugs like Ganja. But the FDI in retail trade is coming or rather raring to come into India exactly because it eyes the profits made by such middlemen and not because these FDIs like Walmart etc., are avataaras who are coming for "paritrāṇāya sādhūnām vināśāyaca duṣkṛtām". Just like typical overseas merchants they want to grab this lucrative margins for themselves and, in course of time, strect that margin progressively.

Since you had been in the north of India, you may be knowing that almost all cold storage capacity in the Bimaru states is in the hands of political establishments. Hence this FDI drama is a barter between the political lobby and the FDI giants, imo, despite all the charade we are seeing in the open.

 

[kamal11]

thanks for sharing

 

[vgane]

I recently read a sane opinion in Mint on FDI in Retail from Joseph Glogitz a global economist & Nobel prize winner...He has also voiced a serious concern on transferring subsidy money directly to the male member of the family:

Updated: Tue, Jan 08 2013. 12 00 AM IST

Bangalore: Economist Joseph Stiglitz on Monday said India’s decision to ease overseas investment rules in retail may not necessarily benefit farmers in the country.
“There is concern in this area that some MNCs (multinational companies) might use their monopsony power, their ability to access cheap goods from China, and use that monopsony power to give them a competitive advantage. That’s not a good basis for growth,” the Nobel laureate said.
Monopsony is a market similar to a monopoly except that a large buyer, and not seller, controls a large proportion of the market and drives the prices down. It is sometimes referred to as the buyer’s monopoly.
Stiglitz, a former chief economist at the World Bank, was not convinced with the view that bringing in foreign firms will make supply chains more efficient and benefit local farmers. “It’s an interesting hypothesis. I haven’t seen any evidence in other countries where that’s been true. I think there is evidence to the contrary in some countries,” said Stiglitz, who was awarded the Nobel Memorial Prize in Economic Sciences in 2001.
Stiglitz, a professor at the Columbia University, was speaking at a media interaction organized by the Azim Premji Foundation in Bangalore.
He said there would be two consequences of foreign direct investment in retail. “One, it drives down prices received by Indian suppliers to compete with foreign firms, thereby increasing inequality,” he said, adding that the second is that there will be a shifting of production from inside the country to outside.
Stiglitz said he saw no shortage of entrepreneurship in India. “Do you really think that Indian entrepreneurs are not capable of bringing in what foreign retail firms are?” he asked.
Indian policymakers need to figure out the real impediments to the development of organized retail, Stiglitz said. “It’s not shortage of capital. India has been exporting capital.”
The Nobel Prize winner, however, agreed some forms of foreign funding are important, as they provide access to technology and markets.
On the outlook for the global economy in 2013, Stiglitz said the forecast for growth in the US economy was not significant enough to make a dent in the unemployment rate. On Europe, he said that while the anxiety of a European crisis has dampened, there was a significant chance that it could flare up again.
A global slowdown would affect India in the short run, he said, but added: “The good thing about India is that it is less dependent on exports, it is less open in that sense.” India needs to focus more on its internal problems such as lack of infrastructure, inequality, education and agriculture, he said.
Stiglitz also said that the savings rate in India had come down in recent years, and increasing the savings rate needs to be an important subject of discussion. He also said the tax system in the country is not working. “The largest investments that come from Mauritius, which is just Indian money going around for reasons of tax evasion,” he said.
On the proposed direct cash transfers of subsidies to beneficiaries, Stiglitz said there were several arguments for and against it. He said there were lots of leakages in handing out benefits in kind and there is a view that individuals were better at spending money than governments.
However, Stiglitz said a large portion of the money was meant for children, and that there was evidence that often giving money to fathers meant that money does not reach the children. “There is evidence that giving money to mothers leads to better outcomes.”
The Brazilian system of conditional cash transfers to incentivize immunization and education was a more thoughtful programme, Stiglitz said.

 

[Brahmanyan]

The pioneer was East India Company. Rather than fearing FDI itself, India fears the enticing trap the countrymen will get into on their own.

Dear Sri "Iyyarooran",
This is what Gandhiji said in 1908 in his famous book "Hind Swaraj" which is a collection of his articles published serially in the columns of the "Indian Opinion" edited by Gandhiji. I give below the excerpts of relevant portions.

Why was India Lost?
"The English have not taken India., we have given it to them. They are not in India because of their strength, but because we keep them. Let us now see whether these propositions can be sustained. They came to our country originally for purposes of trade. Recall the Company Bahadur. Who made it Bahadur? They had not the slightest intention at the time of establishing a kingdom. Who assisted the Company's officers'? Who was tempted at the sight of their silver? Who bought their goods? History testifies that we did all this. In order to become rich all at once we welcomed the Company's officers with open arms. We assisted them. If I am in the habit of drinking bhang and a seller thereof sells it to me, am I to blame him or myself'? By blaming the seller shall I be able to avoid the habit? And, if a particular retailer is driven away will not another take his place? A true servant of India will have to go to the root of the matter. If an excess of food has caused me indigestion. I shall certainly not avoid it by blaming water. He is a true physician who probes the cause of disease, and if you pose as a physician for the disease of India, you will have to find out its true cause."

God forbid, history should not repeat itself. Now the present Government under the illustrious Economist wants to open up FDI to bring large amounts of money to the Country in the form of Foreign Exchange. No one will be investing large amounts out of "love and affection" to our Country. If some one invests Ten Rupees they would try to reap Twenty Rupees to take home. That is business. Eventually we will lose our grip on our economy to the diktats of the investor. Already prices of essential commodities are soaring on daily basis and the rice stands at Rs.52/ kg (in Bangalore) and pulses have gone up beyond reach of common man. This is the effect of cornering the essentials by selfish middlemen.
I wish this subject is taken up seriously for discussion by the learned members.
Regards,
Brahmanyan,
Bangalore.

 

[sangom]

There is nothing to be afraid of when we are destined to doom!! The saddest part is Italy may not benefit directly

 

[kunjuppu]

Why india is scared. Because we do not know and are frightened of the unknowns.

That there are enough indian ‘devils’ who will gang up with the foreign ‘devil’ and drive out the little shops. And completely change the way the urban middle class shops for their groceries and dry goods.

That there will be shortages of vegetables and pulses, in the villages and small tier towns, as these huge wholesalers will suck up the entire produce, to feed their gargantuan warehouses and retail outlets. The little woman who borrows at the daily rate of 12% will lose her ‘independence’ and become an employee of the MNC, thus losing her dignity, and also her dependency on the money lender (not sure if this is not a good thing though).

I am looking at one alwarpet family. Previously they used to shop at jawahar store in the corner of bheemanapettai st and sir cp road. Now they go to nilgiris just a block away. There are at any time 10 people in the nilgiris to serve the goods, though many of these, are indifferent, if not polite. I would not call the service great, but satisfactory, as there is only a paid manager, and not the owner as previously with an eye on customer loyalty. As these are corporate owned shops, I don’t know how much profit responsibility the manager has.

However I have to agree, that the goods are attractively packed, you can pick your own vegetables to your content, and can trust the quality and weightage of the merchandise, something which was always a doubt with the small shopkeeper.

Whatever the price differential may be, the upper middle class has no issues with it, and appears to throng reliance or nilgiris. Jawahar store, I am not sure, if it is still there.

I don’t know, if we can ever stop these changes. For ever. Look at how cell phones have changed the way india lives. And communicates.

And now IKEA is coming with 50 or more shops. There are 3 IKEA shops in Toronto, and the parking lots are always full. If that is any indication, the indian consumer is in for a choice of world wide cutting edge innovation, at a very nominal price, to furnish his household and kitchen. I don’t think any indian manufacturer can match up to IKEA. Infact there is no one else in the world who can do that.

if this post, and my own stands, appear contradictory. it is precisely that. because this is not a easy topic with a singular right answer. atleast i think so.

 

[kunjuppu]

There is nothing to be afraid of when we are destined to doom!! The saddest part is Italy may not benefit directly

not to worry, india, as a managed entity, is better than italy. i think.

the only side effect, may be a large italian immigration to our overcrowded bharat. those seeking fair skinned spouses should rejoice

 

[sankara_sharmah]

The maximum FDI in the world is in one country. The biggest debtor of the world. Where every citizen has debt of $45000. Where they are forced to accept even Communism because China almost owns the country.

Welcome to the United States of America.

 

[sankara_sharmah]

Who said India is scared? Your politicians?

Belonging to a party which left the independence movement for Communism during Quit India movement? Who still do not declare China as aggressor in 1962. Who say Capitalism and FDI is good for China and Not India.

And the parties who trace their origin to parties who declared August 15, 1947 as Black Day. People who fought tooth and nail against Independence movement. Amusing to see these people talking about East India Company.
The common man is not bothered and not afraid. Why should he be? He is not affected and will not be affected.

In Pune, I had gone to a branch of Reliance Fresh Buy( I think that is what it is called) where they sell fresh vegetables. There were at least 10 vegetable vendors, both in carts and on the street selling vegetables and doing good business.

In Bangalore I saw the same scene repeated.

Of course Kolkata is dominated by them. Poor Spencers super market has very little sales in their Vegetable section.

Wallmart may sell a lot of cheap Chinese goods which most Indians do not require.

Chines goods are already dominating the Toys market. And Fantastic images of Gods/Goddesses. They have driven the Indian goods out. They are Excellent and cheap. The Hindus are happy.

 

[sankara_sharmah]

Dear Sri "Iyyarooran",
This is what Gandhiji said in 1908 in his famous book "Hind Swaraj" which is a collection of his articles published serially in the columns of the "Indian Opinion" edited by Gandhiji. I give below the excerpts of relevant portions.
Why was India Lost?
"The English have not taken India., we have given it to them. They are not in India because of their strength, but because we keep them. Let us now see whether these propositions can be sustained. They came to our country originally for purposes of trade. Recall the Company Bahadur. Who made it Bahadur? They had not the slightest intention at the time of establishing a kingdom. Who assisted the Company's officers'? Who was tempted at the sight of their silver? Who bought their goods? History testifies that we did all this. In order to become rich all at once we welcomed the Company's officers with open arms. We assisted them. If I am in the habit of drinking bhang and a seller thereof sells it to me, am I to blame him or myself'? By blaming the seller shall I be able to avoid the habit? And, if a particular retailer is driven away will not another take his place? A true servant of India will have to go to the root of the matter. If an excess of food has caused me indigestion. I shall certainly not avoid it by blaming water. He is a true physician who probes the cause of disease, and if you pose as a physician for the disease of India, you will have to find out its true cause."
God forbid, history should not repeat itself. Now the present Government under the illustrious Economist wants to open up FDI to bring large amounts of money to the Country in the form of Foreign Exchange. No one will be investing large amounts out of "love and affection" to our Country. If some one invests Ten Rupees they would try to reap Twenty Rupees to take home. That is business. Eventually we will lose our grip on our economy to the diktats of the investor. Already prices of essential commodities are soaring on daily basis and the rice stands at Rs.52/ kg (in Bangalore) and pulses have gone up beyond reach of common man. This is the effect of cornering the essentials by selfish middlemen.
I wish this subject is taken up seriously for discussion by the learned members.
Regards,
Brahmanyan,
Bangalore.

Sri.Brahmanyan,

That was Gandhiji the consummate politician talking. In a country where very very few have even seen any English goods, he launched the Burn English Goods movement.

 

[Jaykay767]

first off, lets get the basic philosophy correct.

Communism, Socialism, any form of Govt are all a curse to common people. They bring with them corruption, incompetence, inefficiency, waste, unwanted junk regulations & block progress of the people. !! why ? - Power corrupts people & absolute power corrupts absolutely.

so the only solution is - Zero Govt - complete privatization - Just privatize everything including governance of states, cities, towns, etc.. Keep the Govt only to oversee Military, foreign affairs. Privatize social security, healthcare etc... Let the private sector put in the necessary regulations. Just get the "junk incompetent govts" out of everything....

so if you want a prosperous country, your only solution is Zero Govt !! PS: Pl dont immediately bombard with basic questions like how will one handle criminals etc.. when I say Zero Govt - it means a very minimalist govt with some basic laws in place.

while this may appear radical concept, history has many many prosperous kingdoms because they were all fully capitalist, run by a King with very minimal regulations - because they did not know "what was regulations" LOL !! Only thing these Kings did was to collect taxes, enjoyed their life, fought wars & protected their people.

Despite the utter failure of communism, socialism & our own brand of subsidies leadinng to bankrupt state, you wil find many fanatical followers for the Govt. One can only wonder what do they get in return for the junk govts !!!

 

[sankara_sharmah]

first off, lets get the basic philosophy correct.

Communism, Socialism, any form of Govt are all a curse to common people. They bring with them corruption, incompetence, inefficiency, waste, unwanted junk regulations & block progress of the people. !! why ? - Power corrupts people & absolute power corrupts absolutely.

so the only solution is - Zero Govt - complete privatization - Just privatize everything including governance of states, cities, towns, etc.. Keep the Govt only to oversee Military, foreign affairs. Privatize social security, healthcare etc... Let the private sector put in the necessary regulations. Just get the "junk incompetent govts" out of everything....

so if you want a prosperous country, your only solution is Zero Govt !! PS: Pl dont immediately bombard with basic questions like how will one handle criminals etc.. when I say Zero Govt - it means a very minimalist govt with some basic laws in place.

while this may appear radical concept, history has many many prosperous kingdoms because they were all fully capitalist, run by a King with very minimal regulations - because they did not know "what was regulations" LOL !! Only thing these Kings did was to collect taxes, enjoyed their life, fought wars & protected their people.

Despite the utter failure of communism, socialism & our own brand of subsidies leadinng to bankrupt state, you wil find many fanatical followers for the Govt. One can only wonder what do they get in return for the junk govts !!!

Hi J.K,

Just a bit of interesting information I picked up recently.

You know those Red states which are solid G.O.P.

Way back after World War II the Government of U.S invested trillions of dollars in building military bases all around the country. The building continued during the entire course of the Cold War. Most of the places where they built these bases had not infrastructure, because these were the states affected very badly by the loss of railroads and some industries.

So the U.S. Government built the bases and the roads.

Most of them are in the RED states.

So the states which cry for no Government intervention are the places which benefitted and continue to benefit because of the enormous money spend on defense by the U.S. Government. Check out the facts.

 

[Jaykay767]

Hi J.K,

Just a bit of interesting information I picked up recently.

You know those Red states which are solid G.O.P.

Way back after World War II the Government of U.S invested trillions of dollars in building military bases all around the country. The building continued during the entire course of the Cold War. Most of the places where they built these bases had not infrastructure, because these were the states affected very badly by the loss of railroads and some industries.

So the U.S. Government built the bases and the roads.

Most of them are in the RED states.

So the states which cry for no Government intervention are the places which benefitted and continue to benefit because of the enormous money spend on defense by the U.S. Government. Check out the facts.

Sir,

Agree with you !. However that still doesnt change the fact that the only /& best way to progress is to get Govt out of the way !. So what would have happened if the Govt did not build the rail roads etc. the private sector would have stepped in & done that maybe a few years later or in my opinion many decades earlier !!

so in the case of USA, it just so happened that the Govt built the rail roads but you dont need the Govt to do that.

Cheers,

 

[tbs]

hi
i saw in delhi...mother dairy used to sell vegetables..its govt shop....still a lot of rush....price is same as normal vendor...

quality good....consumer happy....there are a lot of middle class consumers in india,...rich wont care abt money....poor

can not afford....so both are not affected...ALWAYS MIDDLE SALARY CLASS WILL BE AFFECTED....

 

[sankara_sharmah]

Sir,

Agree with you !. However that still doesnt change the fact that the only /& best way to progress is to get Govt out of the way !. So what would have happened if the Govt did not build the rail roads etc. the private sector would have stepped in & done that maybe a few years later or in my opinion many decades earlier !!

so in the case of USA, it just so happened that the Govt built the rail roads but you dont need the Govt to do that.

Cheers,

J.K,

The U.S. Government did not build the railroads. These were private. But these closed down because of lack of traffic due to the death of many industries.

Eisenhower was worried about the U.S being invaded. So he built a number of bases all over the U.S mostly in red states. Since the railroads had collapsed roads had to be built afresh for these bases.

They also those towns which were dying out because of the shutting down of industries.

An interesting bit of U.S. history.

BTW one of the biggest private sector industry in U.S is running of Private Prisons. U.S spends more money per prisoner that is per capita than on primary schooling per capita.

 

[Jaykay767]

hi
i saw in delhi...mother dairy used to sell vegetables..its govt shop....still a lot of rush....price is same as normal vendor...

quality good....consumer happy....there are a lot of middle class consumers in india,...rich wont care abt money....poor

can not afford....so both are not affected...ALWAYS MIDDLE SALARY CLASS WILL BE AFFECTED....

Private sector is always the cheapest even when the Govt subsidizes the goods. Because when you subsidize a specific item, you will have to invest less in other areas. It is a zero sum game.

It it the private economy which can ensure a 500 rupee cell phone from the chinese, Koreans etc.. It brings competition & continoulsly innovates & lowers the cost.

 

[Jaykay767]

J.K,

The U.S. Government did not build the railroads. These were private. But these closed down because of lack of traffic due to the death of many industries.

Eisenhower was worried about the U.S being invaded. So he built a number of bases all over the U.S mostly in red states. Since the railroads had collapsed roads had to be built afresh for these bases.

They also those towns which were dying out because of the shutting down of industries.

An interesting bit of U.S. history.

BTW one of the biggest private sector industry in U.S is running of Private Prisons. U.S spends more money per prisoner that is per capita than on primary schooling per capita.

yes, there was a specific reason for Eisenhower to build these roads. Also the private sector had failed in these areas because thats how private capital operates. It goes to the area of higest return leaving many areas under funded.

So there is a strong argument for a Govt to level the playing field, & also fund many research areas otherwise who will find the cure for many diseases.

But the counterpoint to that is - who funded the fundamental research, science, medicine etc in history. It is the private sector - look at the advance by many stalwarts right from Aristotle, Descartes, Pythagorus, Newton, Eiensien etc.. Infact they had to fight the stupid govts to innovate !!

so a complete free market economy with zero/minimal govt would have shaped a different & prosperous US instead of what it is today.

so it is not that the private sector cannot deliver & hence we need the Govt. This certainly does not hold true today, maybe it was in 1940s !!