Q: Isn't it wrong for the the Prime Minister of India to formally endorse "Reliance Jio", a private company?
A: There should be no legal issues with it. If it were, courts would have been moved by it already. And I don’t see it as an endorsement - it is not like Modi is asking Indians to use Jio in place of other services. However, there is problem. Although, I’m a fan of both Modi and the revolution Jio is attempting to pioneer I find this is part of a broader problem - of misusing the imagery of leaders for all kinds of advertisements.
The problem is hardly specific to Reliance or Modi or BJP. I’m seeing front page advertisements with PM/CM images almost every week for both government projects and private ones. For government projects this is a woeful wastage of public money. The other day I was so pained by the reckless use of TN CM’s face for all Independence day hoisting event - should not that be a news item than a paid service from public money? If it is for private projects [religious/commercial], it portends all kinds of bias.
There should be a law that does a blanket ban on use of any elected official’s face on any kind of advertisement - whether for government projects or for private ones. Leader’s faces should appear on news items and not on advertisements. As public we should push our lawmakers to enact such a law.
Q: What are the pitfalls of following the max. retail price (MRP) system in India?
A: With MRP, Indian politicians have done a “commendable” job of screwing both honest businesses and consumers at the same time. Other than a group of unscrupulous businessmen [who probably are well connected to various politicians], this doesn’t benefit anyone. It is yet another example of how seemingly well-intentioned socialist programs make us collectively poorer.
First, it creates a baseline and credibility for some of the ridiculously high prices quoted by the manufacturers. People often forget the maximum in Maximum Retail Price and purchase overpriced items sold at the MRP. They are anchored to believe that they are getting a great deal even if they get a little under the MRP. You should be getting most items way below the MRP, but you don’t because the sticker sells you that high price. You are anchored and cheated this way.
Second, it is fairly stupid. Let’s assume you need a bottle of Coca Cola when you are parched dry during your trek in the sands of Jaisalmer. A poor entrepreneur brings chilled Cola to you right there. Should the price of that bottle be the same as the bottle you get near a bottling plant in Mumbai? No. That entrepreneur put a lot of effort to get to that desert and keep it cool under arduous circumstances. He should be free to charge way more than the one you get near your home where the entrepreneur doesn’t have to put much effort. If you don’t allow that, one of three things happen:
- A hardworking poor entrepreneur becomes impoverished. These poor vendors are not Mark Zuckerbergs and Warren Buffets. Poverty continues.
- The entrepreneur knowingly cheats the MRP law taking the risk [and probably paying mamool to the local police]. Corruption continues.
- The entrepreneur doesn’t find the risk worth the reward and doesn’t get people in far-flung places the products they need. You go dry on your desert trek. Thirst continues.
Third, it kills competition. Putting any suggested price protects the existing businessmen in favor of newer entrants. In a capitalist economy, a new player would try to compete with the existing businessmen by cutting prices [benefiting customers] and the existing players would respond with greater innovation to cut costs/add benefits [benefiting the whole nation].
By sticking a standard price you are killing that competition impacting both customers [no wonder why Indian consumers are treated so badly] and innovation [leading to great stagnancy in the economy].
The thing is until the voters realize that they are all being fooled by these schemes, they will remain. As long as fools remain, cheaters remain.
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