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Ashish's Niti

Niti in Sanskrit means policy/strategy/vision. This blog hosts my political views, along with news and commentary. This blog has moved here.

Saturday, September 04, 2004

Indian consumers are getting a bad bargain

T N Ninan tries to answer "Why do Indians have to pay more?"

We like to tell ourselves that India has become a much more open market than it used to be in the bad old days; import licences have all but disappeared, tariff levels have come down to reasonable levels, and domestic production and supply restrictions too have all but gone.

However, in retail prices of items such as laptops, cars or even electric fans cannot be explained by high taxes, import tariffs and so on. Many of the problems the author mentions can be explained by our still closed retail sector. Indian consumers do not see price-bargains or end-of-the season discount sales, or return priviledges that common in other countries.

See, Supermarkets - good value, on how supermarkets drive down the costs, and increase our choices. They also rank near the top in the 'Best Workplaces' survey.

Maybe it's time to welcome companies like WalMart in India.
I say, bring on the retail revolution! Remove all the restriction on retail businesses including those related to FDI.

For critics of supermarket chains, such as Wal-Mart, I would refer to an excellent post, titled Productivity vs Distribution, by Arnold Kling.

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