Nature at its PeAk beauty!!
Where is the electricity? Hey pole, did you eat it up? Or did they consume all the electricty to build you up?
Dare to go in this jungle forPhotography eh?
Touching the sky... the serenity
The ROCKY in Pune?
Wednesday, 25 July 2007
Around Pune...
Nature at its PeAk beauty!!
Where is the electricity? Hey pole, did you eat it up? Or did they consume all the electricty to build you up?
Dare to go in this jungle forPhotography eh?
Touching the sky... the serenity The ROCKY in Pune?
Saturday, 21 July 2007
EPCG - Promotion or Harassment?
EPCG - the great Indian initiative to build its economy - a great way to tempt entrepreneurs - a bright future into torture!
Welcome aboard to Indian Customs - where a hundred odd agencies are involved and another hundred odd regulations along with a fat budget for the beggars - our Customs officials. Now actually that gives me another topic to discuss and elaborate whole heartedly - misuse of powers by our government authorities.. may be some other time?
Going back, EPCG an abbreviation (ever wondered that the word abbreviation is very long?) for Export Promotion Capital Goods scheme. Means you import goods at flat 5% customs duty (thankfully the cess is done away with). Sounds awesome and tempting right? But you see the scheme says Export... obviously thats not all! You got to export - bring some foreign exchange and make our nation ah-so-proud! You will but naturally be contributing to our Balance of Trade in the process... and earn a title of being called an Exporter! But hey hey hey! Exporting under EPCG is an obligation (as they righfully call it) and not an option or an alternative to something!
So anyway, now that we call our country "a liberalised economy" I formally introduce you to the most "Idiotic and Unliberalised economic system topped with multiple instances of harassment by our Government servants ( I rightly call them beggars)" Well, if you thought Importing stuff to India requires permission, you may just be wrong. Export requires more tension and just saying bye bye to your money! You not only have to get permission but also pay our beggars to earn our living... sounds silly? Thats the fact!
The only difference between a roadside beggar and government beggars - their power. And if you don't give them "dakshina" (a hindi word for charity), they will harass you till you are on the road asking for dakshina! Worst still, you need to generate this illegal money in your business (and trust me if you are an innocent citizen, you'll have no clue what next). And not to be forgotten, generating this illegal money is obviously ILLEGAL... but that's perfectly Okay with our beggars. They actually want us to be illegal ... can I say illegal promotion audit? Or hey, Illegal Promotion rampage? IPR!!! (Sorry, the intellectual property rights should seek another abbreviation for itself!) Our Acts and Regulations have given the Government discretionary powers to do as they please to earn their living at the cost of the public. Actually despite huge tax collections, no money is left for any development, let alone paying good wages to the beggars! Various authorities penalise the country men for defaults, do they ever penalise the tax authorities or the government officials for defaults? I wish I could use my citizenship power, walk upto P C Chidambram's house and say "hey big guy, com'on shell out all your money and not to forget your brains too else I'm gonna harass you!" If you just questioned why brains - Well when intelligent people can't use their brains productively (like Bin Laden), its better to have them not use at all! Atleast it would save our billion population from headaches! I wonder if asprin or crocin sale has gone up ever since Congress has come in power.
So well I started out with EPCG and ended up with our beggars! Back to the point, so first getting this EPCG license involves a rocket scientist to fill up their ultra hi-tech form. And even though its online, you need to submit a hard copy (without which you're doomed!) God save our wanna-be-paperless-economy! So here are a few small time beggars you have to deal with. Next, they will never approve your application without asking for a couple of more undertakings and bla bla bla... Please visit DGFT site for more details!
All right! So you got the license after 2 months of hard work and now you get a peaceful sleep! Ever wondered how peacefully a farmer sleeps after a day of toil? So now you are excited about your equipment and you start gearing up for payments and opening a LOC (not that this job is more comforting, but we'll skip it for the moment!) You've received your Invoices, Bill of Lading, Certificates and everything else in some million copies (of which you again make a thousand copies!) You catch hold of a clearing agent - you obviously cannot clear this stuff yourself even if you carried the law book and followed every word of it. The clearing agent does his stuff and then demands you a fat ransom!! You go flat! Seeing stars in the day? Oh the beggars won't clear your stuff unless you give them dakshina! Well you think I work in this business, I am paying for my equipment and who is he to stop me? But Alas! You're in India!
Next.. the equipment comes, and you're excited (forgetting the past)! Next comes your Excise guy! He's the best! If you don't entertain him, he will default you under some rubbish section of Excise Act and presto! You're behind the bars! Its like the magical fairy with her magical wand! I sometimes wonder if I can give them a nice big bowl (may be tupperware's?) for begging? So there you break your head once again Generating Illegal money for our loved ones! Did you just think where do you get time to do productive work then? Or how do the big corporates manage? Well, you may just think that big corp won't be hassled, but the reality is far from this fact. They are also troubled but no one is made aware... It happens with the top management!
Oh yes! If you've forgotten what happens with the export then?First you need permission. Next, for every consignment you export, even if you are on Jupiter ( I wish all the beggars are sent there), you will have to send an intimation to the beggars " hey big boys, some cocaine just left my place. Will you kindly sign this copy of invoice and send it back to me?" No exaggeration!!!!!!! At the end of the year again, you need to file a return telling them you exported this this this to so and so people for so much money. Which again has to be approved!
Effectively, even if I export a needle I need two full time employees just filling forms, maintaining registers and of course entertaining our beggars! Just so much for being an Entrepreneur! So much for growing and so much for living life!
So if you want to live peacefully, start saving up illegal money for our beggars! Do you still have your piggy bank? May be you can find it in your cellars or old suitcase? And those guys barge in, call for a ligh game of treasure hunt and let them go for your piggy! Hope it farts in their nose!
PS : A lot many other beggars of our country have been left out in this discussion. Hope to catch up on them soon! Feeling nostalgic!
Welcome aboard to Indian Customs - where a hundred odd agencies are involved and another hundred odd regulations along with a fat budget for the beggars - our Customs officials. Now actually that gives me another topic to discuss and elaborate whole heartedly - misuse of powers by our government authorities.. may be some other time?
Going back, EPCG an abbreviation (ever wondered that the word abbreviation is very long?) for Export Promotion Capital Goods scheme. Means you import goods at flat 5% customs duty (thankfully the cess is done away with). Sounds awesome and tempting right? But you see the scheme says Export... obviously thats not all! You got to export - bring some foreign exchange and make our nation ah-so-proud! You will but naturally be contributing to our Balance of Trade in the process... and earn a title of being called an Exporter! But hey hey hey! Exporting under EPCG is an obligation (as they righfully call it) and not an option or an alternative to something!
So anyway, now that we call our country "a liberalised economy" I formally introduce you to the most "Idiotic and Unliberalised economic system topped with multiple instances of harassment by our Government servants ( I rightly call them beggars)" Well, if you thought Importing stuff to India requires permission, you may just be wrong. Export requires more tension and just saying bye bye to your money! You not only have to get permission but also pay our beggars to earn our living... sounds silly? Thats the fact!
The only difference between a roadside beggar and government beggars - their power. And if you don't give them "dakshina" (a hindi word for charity), they will harass you till you are on the road asking for dakshina! Worst still, you need to generate this illegal money in your business (and trust me if you are an innocent citizen, you'll have no clue what next). And not to be forgotten, generating this illegal money is obviously ILLEGAL... but that's perfectly Okay with our beggars. They actually want us to be illegal ... can I say illegal promotion audit? Or hey, Illegal Promotion rampage? IPR!!! (Sorry, the intellectual property rights should seek another abbreviation for itself!) Our Acts and Regulations have given the Government discretionary powers to do as they please to earn their living at the cost of the public. Actually despite huge tax collections, no money is left for any development, let alone paying good wages to the beggars! Various authorities penalise the country men for defaults, do they ever penalise the tax authorities or the government officials for defaults? I wish I could use my citizenship power, walk upto P C Chidambram's house and say "hey big guy, com'on shell out all your money and not to forget your brains too else I'm gonna harass you!" If you just questioned why brains - Well when intelligent people can't use their brains productively (like Bin Laden), its better to have them not use at all! Atleast it would save our billion population from headaches! I wonder if asprin or crocin sale has gone up ever since Congress has come in power.
So well I started out with EPCG and ended up with our beggars! Back to the point, so first getting this EPCG license involves a rocket scientist to fill up their ultra hi-tech form. And even though its online, you need to submit a hard copy (without which you're doomed!) God save our wanna-be-paperless-economy! So here are a few small time beggars you have to deal with. Next, they will never approve your application without asking for a couple of more undertakings and bla bla bla... Please visit DGFT site for more details!
All right! So you got the license after 2 months of hard work and now you get a peaceful sleep! Ever wondered how peacefully a farmer sleeps after a day of toil? So now you are excited about your equipment and you start gearing up for payments and opening a LOC (not that this job is more comforting, but we'll skip it for the moment!) You've received your Invoices, Bill of Lading, Certificates and everything else in some million copies (of which you again make a thousand copies!) You catch hold of a clearing agent - you obviously cannot clear this stuff yourself even if you carried the law book and followed every word of it. The clearing agent does his stuff and then demands you a fat ransom!! You go flat! Seeing stars in the day? Oh the beggars won't clear your stuff unless you give them dakshina! Well you think I work in this business, I am paying for my equipment and who is he to stop me? But Alas! You're in India!
Next.. the equipment comes, and you're excited (forgetting the past)! Next comes your Excise guy! He's the best! If you don't entertain him, he will default you under some rubbish section of Excise Act and presto! You're behind the bars! Its like the magical fairy with her magical wand! I sometimes wonder if I can give them a nice big bowl (may be tupperware's?) for begging? So there you break your head once again Generating Illegal money for our loved ones! Did you just think where do you get time to do productive work then? Or how do the big corporates manage? Well, you may just think that big corp won't be hassled, but the reality is far from this fact. They are also troubled but no one is made aware... It happens with the top management!
Oh yes! If you've forgotten what happens with the export then?First you need permission. Next, for every consignment you export, even if you are on Jupiter ( I wish all the beggars are sent there), you will have to send an intimation to the beggars " hey big boys, some cocaine just left my place. Will you kindly sign this copy of invoice and send it back to me?" No exaggeration!!!!!!! At the end of the year again, you need to file a return telling them you exported this this this to so and so people for so much money. Which again has to be approved!
Effectively, even if I export a needle I need two full time employees just filling forms, maintaining registers and of course entertaining our beggars! Just so much for being an Entrepreneur! So much for growing and so much for living life!
So if you want to live peacefully, start saving up illegal money for our beggars! Do you still have your piggy bank? May be you can find it in your cellars or old suitcase? And those guys barge in, call for a ligh game of treasure hunt and let them go for your piggy! Hope it farts in their nose!
PS : A lot many other beggars of our country have been left out in this discussion. Hope to catch up on them soon! Feeling nostalgic!
Monday, 9 July 2007
गूगल!!!! आपका जवाब नहीं!
गूगल जिंदाबाद! शाबाश! यह तो वाकिल कमाल कर दिखाया इन्होने फिर से। गूगल की तारीफ करने के लिए कोई शब्द ही नहीं रहें! क्या कोई मुझे यहाँ नौकरी दिलाएगा? उनकी में हमेशा आभारी रहूँगी! वाकिल में, दाद देनी पडेगी यह गूगल की!
Wednesday, 18 April 2007
High Interest Rate - Helping control Inflation?
Inflation - an issue which affects every economy - an issue which all economists across the world ponder upon- an issue which all governments battle against - an issue which makes a huge difference to each and everyone of us, be it a road side hawker or at large scale multi national
corporation.
Inflation means what the word suggests; literally the general prices of all goods and services are inflated. Essentially, inflation refers to a general rise in prices measured against a standard level of purchasing power. In other words, during inflation, the value of money reduces over a period of time. There is a gross demand and supply mismatch - in it would translate to excess money
supply coupled production, high demand. Going solely by economics theory, high growth rate in any economy would naturally induce some inflation; but when unchecked, high pressure is dangerous to the economy.
Normal inflation is a good sign of growth, but high inflation rates - which India faces today has invited a lot of concerns from all sect of people. Often seen as sociopolitical issue, inflation
hurts the poor man the most. India, a country hugely dominated by poor people, will fail majorly if the inflation goes unchecked for a long period of time. Is this high inflation a good sign of growth?
Undoubtedly our economy has put up an outstanding performance with the growth rate being almost 9%. But is it all that matters? Unfortunately NO! With inflation as high as 6.5% the growth has been practically chewed by the inflation! India largely faces the problem of mismanagement by the Government and the Reserve Bank. The moment the inflationary pressure is seen to be rising, the knee-jerk response has been to increase the interest rates in the country! Such a measure is a good short term solution, but needs to be backed by strong long term measures. Today, India boasts of one of the best capital markets in Asia, best IT industries and the most upcoming market for research and development. Are high interest rates justifiable in the long run?
Interest rates work both ways - they can help curb inflation and on the other hand disturb the production as well; thus being paradoxical. They can instead add a burden on the inflation too.
Theoretically, with high supply of money, high interest rates discourage people from borrowing
more, thus reducing the supply of money in the economy. But this can be paradoxical because production of goods will take a hit too as entrepreneurs will not be willing to pay high interest rates! That's situation one. Situation two is when due to high interest rates, people now find fixed deposit investment more attractive as high interest rates will earn more return the stock market. So again, supply of money has increased thus adding a burden on the existing inflationary pressure! Increasing interest rates have a negative effect on all industries across sectors. Priority sectors and small enterprises are adversely affected, thus putting brakes on the production. Today, when India claims to open its economy, promising high growth and attractive markets, high inflation coupled with highest interest rate (almost 13.75%) is a clear signal to all entrepreneurs to stay clear off the sub continent!
Has the government grossly failed to deliver a basic healthy economy by just taking short term measures like this? Are such high interest rates commensurate with the growth of the economy? Are we decelerating our own economy?
corporation.
Inflation means what the word suggests; literally the general prices of all goods and services are inflated. Essentially, inflation refers to a general rise in prices measured against a standard level of purchasing power. In other words, during inflation, the value of money reduces over a period of time. There is a gross demand and supply mismatch - in it would translate to excess money
supply coupled production, high demand. Going solely by economics theory, high growth rate in any economy would naturally induce some inflation; but when unchecked, high pressure is dangerous to the economy.
Normal inflation is a good sign of growth, but high inflation rates - which India faces today has invited a lot of concerns from all sect of people. Often seen as sociopolitical issue, inflation
hurts the poor man the most. India, a country hugely dominated by poor people, will fail majorly if the inflation goes unchecked for a long period of time. Is this high inflation a good sign of growth?
Undoubtedly our economy has put up an outstanding performance with the growth rate being almost 9%. But is it all that matters? Unfortunately NO! With inflation as high as 6.5% the growth has been practically chewed by the inflation! India largely faces the problem of mismanagement by the Government and the Reserve Bank. The moment the inflationary pressure is seen to be rising, the knee-jerk response has been to increase the interest rates in the country! Such a measure is a good short term solution, but needs to be backed by strong long term measures. Today, India boasts of one of the best capital markets in Asia, best IT industries and the most upcoming market for research and development. Are high interest rates justifiable in the long run?
Interest rates work both ways - they can help curb inflation and on the other hand disturb the production as well; thus being paradoxical. They can instead add a burden on the inflation too.
Theoretically, with high supply of money, high interest rates discourage people from borrowing
more, thus reducing the supply of money in the economy. But this can be paradoxical because production of goods will take a hit too as entrepreneurs will not be willing to pay high interest rates! That's situation one. Situation two is when due to high interest rates, people now find fixed deposit investment more attractive as high interest rates will earn more return the stock market. So again, supply of money has increased thus adding a burden on the existing inflationary pressure! Increasing interest rates have a negative effect on all industries across sectors. Priority sectors and small enterprises are adversely affected, thus putting brakes on the production. Today, when India claims to open its economy, promising high growth and attractive markets, high inflation coupled with highest interest rate (almost 13.75%) is a clear signal to all entrepreneurs to stay clear off the sub continent!
Has the government grossly failed to deliver a basic healthy economy by just taking short term measures like this? Are such high interest rates commensurate with the growth of the economy? Are we decelerating our own economy?
Friday, 16 March 2007
360 degrees view on religion vs spirituality
"Religion, a system of thought, feeling, and action that is shared by a group and that gives the members an object of devotion; a code of behavior by which individuals may judge the personal and social consequences of their actions; and a frame of reference by which individuals may relate to their group and their universe. Usually, religion concerns itself with that which transcends the known, the natural, or the expected; it is an acknowledgment of the extraordinary, the mysterious, and the supernatural. The religious consciousness generally recognizes a transcendent, sacred order and elaborates a technique to deal with the inexplicable or unpredictable elements of human experience in the world or beyond it."
Dictionary meaning of religion is given as
"A set of beliefs concerning the cause, nature, and purpose of the universe, especially when considered as the creation of a superhuman agency or agencies, usually involving devotional and ritual observances, and often containing a moral code governing the conduct of human affairs.
A specific fundamental set of beliefs and practices generally agreed upon by a number of persons or sects."
So is it that a particular religion basically comprises of some common people who have certain similar beliefs about their God and the society they live in with the intent to convince others the truth of those beliefs? Like in Hinduism we have over million Gods and Goddesses who are worshipped in different forms and rituals for all of them vary drastically. So basically we have something tangible in store here. For instance Christians visit the Church every Sunday. Muslims consider Friday to be their auspicious day, Hindus consider Saturday or the full moon day to be inauspicious. Again Hindus consider cow as their holy god and whereas eating pig flesh is a taboo amongst the Muslims. So this is what religion means. Being religious is to subscribe to what your religion preaches and following the rules set therein. Basically everything is linked to God and religion is just another way of governing the society (in old days there was lack of legislations for immoral and unethical issues)
Spirituality, described as "adhyatma" in Sanskrit meaning "which pertains to soul (aatma)" In essence, spirituality does not confirm itself to tangible beings. It goes beyond physical matter, something larger and intangible than one self. Spirituality connects you with a higher dimension of life, beyond earthly pleasures. Some call this higher dimension God, Love, Spirit, Soul. Basically they are all the same. You may connect yourself with God or with other people and feel one with them. It helps you to increase your awareness with self, God, divinity, etc. It is a personal connection. There are no beliefs imposed on you like religion does. Spirituality does not asks you to perform in a certain manner. It does not tell you to place your belief in some particular God. We all are immortal souls belonging to ONE - Spirit. We have hundreds of religions preaching all over the world, but at the end of it we all are ONE. This feeling of higher consiousness of being one is being spiritual.
There is a very thin line of difference between reliogion and spirituality. Depending on how you look at it, there will be different opinions on the issue. There is no single answer, there are no right or wrong answers either. Beliefs are something you draw from your experiences and your surroundings!
Bibliography:
American Psychological Association (APA)
Modern Language Association
Chicago Manual Style (CMS)
Dictionary meaning of religion is given as
"A set of beliefs concerning the cause, nature, and purpose of the universe, especially when considered as the creation of a superhuman agency or agencies, usually involving devotional and ritual observances, and often containing a moral code governing the conduct of human affairs.
A specific fundamental set of beliefs and practices generally agreed upon by a number of persons or sects."
So is it that a particular religion basically comprises of some common people who have certain similar beliefs about their God and the society they live in with the intent to convince others the truth of those beliefs? Like in Hinduism we have over million Gods and Goddesses who are worshipped in different forms and rituals for all of them vary drastically. So basically we have something tangible in store here. For instance Christians visit the Church every Sunday. Muslims consider Friday to be their auspicious day, Hindus consider Saturday or the full moon day to be inauspicious. Again Hindus consider cow as their holy god and whereas eating pig flesh is a taboo amongst the Muslims. So this is what religion means. Being religious is to subscribe to what your religion preaches and following the rules set therein. Basically everything is linked to God and religion is just another way of governing the society (in old days there was lack of legislations for immoral and unethical issues)
Spirituality, described as "adhyatma" in Sanskrit meaning "which pertains to soul (aatma)" In essence, spirituality does not confirm itself to tangible beings. It goes beyond physical matter, something larger and intangible than one self. Spirituality connects you with a higher dimension of life, beyond earthly pleasures. Some call this higher dimension God, Love, Spirit, Soul. Basically they are all the same. You may connect yourself with God or with other people and feel one with them. It helps you to increase your awareness with self, God, divinity, etc. It is a personal connection. There are no beliefs imposed on you like religion does. Spirituality does not asks you to perform in a certain manner. It does not tell you to place your belief in some particular God. We all are immortal souls belonging to ONE - Spirit. We have hundreds of religions preaching all over the world, but at the end of it we all are ONE. This feeling of higher consiousness of being one is being spiritual.
There is a very thin line of difference between reliogion and spirituality. Depending on how you look at it, there will be different opinions on the issue. There is no single answer, there are no right or wrong answers either. Beliefs are something you draw from your experiences and your surroundings!
Bibliography:
American Psychological Association (APA)
Modern Language Association
Chicago Manual Style (CMS)
Cement Prices - what it means to common man!
Enter February 2007 and the entire country was eagerly awaiting the budget. Or was it the entire world awaiting to see how well India would open up her economy in the face of globalisation? To many the budget is still a mystery. Was it good or bad or reasonable enough for world's fastest growing economy?
Drilling to one major hit back on the cement sector - the government has taken control over the pricing. The rationale - cement leaders formed some sort of a cartel (remember the oil cartels in middle east who took over entire control of oil production and prices to the world) and kept on increasing the prices neglecting the government's warning. They managed to pool in a large sum of profit despite being in the manufacturing sector! Today most manufacturing in India earn around 10 to 15% profits whereas cement was earning a whooping 70% according to some source! (did you just wish you were owning some mines?) So price control was required. Or was it really required?
The budget has forced the cement leaders to slash down their prices so drastically that virtually all their extra margins have been wiped out. To many this was a knee jerk reaction on the path of the government. After all in a free market, demand and supply forces regulate the prices. When there has been no proved case of market failure due to high prices, why did the government interfere? When India is in the race of globalisation and liberalisation, free market is what everyone wants and moreover is required! Foreign investors tend to shy away from economies where too much control is in the hands of the government. Hopefully it is a short term measure! Our minister of Commerce was lately asked by one of the media channels the reasons for this action taken by the government. Today, though media is supposed to be the strongest medium of justice in the country, it was unable to help the cement industry too in the wake of these regulations.
So by how much do we think inflation would be curbed by reducing and regulating cement prices? Or has there been any change in the inflation ever since cement prices have been forcibly dropped? Though India is a fast growing economy and can absorb any amount of infrastructural development, how fast is the infrastructure growing in our country to validate that cement prices cause inflation? Going further, reducing the prices will cause pressure on these industries who will be unable to expand exponentially, thus creating obvious shortage in the supply of cement. Do we have a real subsitute for cement?
Next question that comes to common man's mind is - Why isn't the government concentrating on long term development plans for the country? Social security, employment opportunities, primary and secondary education, higher education, public health are still neglected although huge amounts are collected by way of the one-thousand-and-one taxes we have here! If you're paying cess on anything (which is likely that you're paying cess on the soap and toothpaste you use), that amount goes to funding education in India. But we still see that most government schools are 100 students in one class (that class ranges from 1st to 10th) So can we safely conclude that a large chunk of the fund is going in our politician's pockets? So then why can't the cement industry cash in some extra profit if the market has not reacted adversely? Anyway, our politicians never get raided or caught for blackmoney or money laundering! Atleast cement industries are paying their taxes and funding the government (and ofcourse our politicians) free of charge!
Drilling to one major hit back on the cement sector - the government has taken control over the pricing. The rationale - cement leaders formed some sort of a cartel (remember the oil cartels in middle east who took over entire control of oil production and prices to the world) and kept on increasing the prices neglecting the government's warning. They managed to pool in a large sum of profit despite being in the manufacturing sector! Today most manufacturing in India earn around 10 to 15% profits whereas cement was earning a whooping 70% according to some source! (did you just wish you were owning some mines?) So price control was required. Or was it really required?
The budget has forced the cement leaders to slash down their prices so drastically that virtually all their extra margins have been wiped out. To many this was a knee jerk reaction on the path of the government. After all in a free market, demand and supply forces regulate the prices. When there has been no proved case of market failure due to high prices, why did the government interfere? When India is in the race of globalisation and liberalisation, free market is what everyone wants and moreover is required! Foreign investors tend to shy away from economies where too much control is in the hands of the government. Hopefully it is a short term measure! Our minister of Commerce was lately asked by one of the media channels the reasons for this action taken by the government. Today, though media is supposed to be the strongest medium of justice in the country, it was unable to help the cement industry too in the wake of these regulations.
So by how much do we think inflation would be curbed by reducing and regulating cement prices? Or has there been any change in the inflation ever since cement prices have been forcibly dropped? Though India is a fast growing economy and can absorb any amount of infrastructural development, how fast is the infrastructure growing in our country to validate that cement prices cause inflation? Going further, reducing the prices will cause pressure on these industries who will be unable to expand exponentially, thus creating obvious shortage in the supply of cement. Do we have a real subsitute for cement?
Next question that comes to common man's mind is - Why isn't the government concentrating on long term development plans for the country? Social security, employment opportunities, primary and secondary education, higher education, public health are still neglected although huge amounts are collected by way of the one-thousand-and-one taxes we have here! If you're paying cess on anything (which is likely that you're paying cess on the soap and toothpaste you use), that amount goes to funding education in India. But we still see that most government schools are 100 students in one class (that class ranges from 1st to 10th) So can we safely conclude that a large chunk of the fund is going in our politician's pockets? So then why can't the cement industry cash in some extra profit if the market has not reacted adversely? Anyway, our politicians never get raided or caught for blackmoney or money laundering! Atleast cement industries are paying their taxes and funding the government (and ofcourse our politicians) free of charge!
Wednesday, 14 March 2007
A thought for PopCorn!
Alright, so you go for a movie with you friends and during the interval you buy a bag of pop corn... cost to you is Rs 35 per small bag! You think that's a whooping lot, but you want to munch something; so you buy it anyway! Later you you come home and tally your expenses of the day and you think back "hey, I just spent 35 bucks on pop corn! Wait a minute, something is really wrong here! Am I insane?" And if you're an economics student, it hits you harder probably. Remember we learnt when commodities are scarce, their prices are high. Simple reason - demand for commodities is more than the supply for them. So when you equate this demand- supply lesson from your school to the POP CORN, it doesn't make sense suddenly. There never seemed to be scarcity of popcorn in the theatre! So now you ask yourself why is it so heavily priced? May be you would argue that factors like the theatre has to pay salaries, electricty, the one-thousand taxes we have, rent and so on which gets included in the selling price of the popcorn. Okay, given these need to be added to the selling price, but does it warrant charging 35 bucks from each and every person who comes to buy popcorn and other million items they have?
Lets do some basic calculations... corn seeds will not cost any more than few pennies, and they don't even need too much labour for pop the seeds (afterall we see the huge machines popping the corn). So now you realise they are marking up the popcorn bag by more than 200%!!! And inspite of that, everyone's still buying this popcorn! You could probably buy a 10 buck pouch of ready to pop corn and make it at home! But that would make you look too stingy if you carried home made popcorn to the movies right?
So now you break your head and wonder what is it that makes people buy popcorn at such a hefty price? Various factors - a lot of people will look at it from the marketing point of view. Lets look from the economics point of view. Those guys at the theatre are able to price it at 35 bucks because we as public are ready to pay for it. Doesn't make much sense? Look at it from our point of view. It is because we are insensitive to the price tags put up in the theatre and henceforth willing to pay any sum they charge us, that the theatre is able to take a large chunk of your money in a single movie you come to watch! Those who do not wish to pay will get their own food, or not have anything at all from the cafeteria. So the choice is ours. There are no demand and supply factors working here, there is no big marketing happening here either. The theatre starts selling the popcorn at 25 bucks first following other theatre's examples. It later realises that people don't bother about the prices, so it hikes the prices. Still there is no change in the number of popcorn eaters. Running a theatre is like any other business. And every business' aim is to maximise profits. When people are willing to pay more (obviously there are no signs of demotivation) why not cash in that extra profit?
Does that mean we all should stop eating popcorn in the theatre (and instead carry our own)? Well, NO! It's not without any reason that you're being charged 35 bucks! If the theatre had a better bargaining capacity, it would have charged 100 bucks (remember monopoly?) But it can't charge that much either! Enter demand supply lessons!
Lets do some basic calculations... corn seeds will not cost any more than few pennies, and they don't even need too much labour for pop the seeds (afterall we see the huge machines popping the corn). So now you realise they are marking up the popcorn bag by more than 200%!!! And inspite of that, everyone's still buying this popcorn! You could probably buy a 10 buck pouch of ready to pop corn and make it at home! But that would make you look too stingy if you carried home made popcorn to the movies right?
So now you break your head and wonder what is it that makes people buy popcorn at such a hefty price? Various factors - a lot of people will look at it from the marketing point of view. Lets look from the economics point of view. Those guys at the theatre are able to price it at 35 bucks because we as public are ready to pay for it. Doesn't make much sense? Look at it from our point of view. It is because we are insensitive to the price tags put up in the theatre and henceforth willing to pay any sum they charge us, that the theatre is able to take a large chunk of your money in a single movie you come to watch! Those who do not wish to pay will get their own food, or not have anything at all from the cafeteria. So the choice is ours. There are no demand and supply factors working here, there is no big marketing happening here either. The theatre starts selling the popcorn at 25 bucks first following other theatre's examples. It later realises that people don't bother about the prices, so it hikes the prices. Still there is no change in the number of popcorn eaters. Running a theatre is like any other business. And every business' aim is to maximise profits. When people are willing to pay more (obviously there are no signs of demotivation) why not cash in that extra profit?
Does that mean we all should stop eating popcorn in the theatre (and instead carry our own)? Well, NO! It's not without any reason that you're being charged 35 bucks! If the theatre had a better bargaining capacity, it would have charged 100 bucks (remember monopoly?) But it can't charge that much either! Enter demand supply lessons!
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