Protectionism, Indian Car Pricing, Development Economics etc

[khanak]

Originally Posted by jesal

YAWN, biggest problem of this country, everyone automatically brings in the poor for no reason, same like politicians do, sad thread close it. india great india this in its dreams only. countrys gone to dogs or is close to, open your eyes and see it soon better for yourself.

The reason why I got the poor into the thread is to show how public policy is formulated. A lot of public policyis formulated to to uplift the huge proportion of India that is still poor. Should public policy be formulated to benefit the 4-5% of the population that is rich or should it benfit 90% of the country that is poor?

[khanak]

Originally Posted by extreme_torque

The basis of comparison is flawed. You earn in dollars and you spend in dollars.... Simple! Now if Indian government wants us to believe that we are paying less for everything we get compared to the developed world... please pay us in dollars and we will spend the same for commodities as well. On second thoughts... how many times do you need to get your car washed in toronto as compared to India? I am sure it will work out cheaper in toronto still. :P

I think you havent understood the basics. Take a look at the links that Team-BHP - View Profile: aravindwarrier posted - Big Mac Index - Wikipedia, the free encyclopedia. Earning in dollars doesnt mean that you will earn more. A person is paid more or less in another country so that he or she can live a more or less equal life in different countries. The different costs of living in the country are taken into account. Therefore if someone earns $4000 a month in the US, it might not be considered as big a deal as if a person earnt Rs. 1,60,000 a month in India. That is because a person in India can live a much better life with that 1,60,000 a month.

[khanak]

Originally Posted by tsk1979

JAI HIND India is a great country. Anybody criticizing India is bad. Its the best country in the whole world.
Thats the tune we should sing right?
Well thats the reason why most of India sits in the dark ages. If you compare this country to others, or say how others have a better life, you are a traitor, or a noveau rich who does not understand ground realities, or plain ignorant.
And why should I blame myself. I contribute enough to this country, and take back very little.
MY compatriots in other countries take back much more in terms of healthcare roads infrastructure etc.,
I pay money to this country in terms of taxes, direct and indirect.
That GPRS you talk about, well I pay for that too, and pay service tax on my bill.
The mobile I bought had taxes attached to the bill.
The car I own as 10% tax paid.
The salary I earn I pay tax on that too,
What am I getting in return. All this 2kg rice thingy is okay, and makes good arguments at PAGE 3 parties, and all this talk about "Anybody Poor is untouchable blah blah" is good to embaress the middle class, but in the end it comes down to the very basics for me.
I pay money, what do I get in return.
JAI HIND will not refund the 1500rs I spent on my washing machine because the voltage spiked to 300V.
And before you tell me "Look you have a washing machine which 90% of India does not", I would like to tell you "Sorry, not my fault".

I agree. When I drive in Mumbai or go anywhere by train I get pissed off too. Afterall I am paying so much in taxes and what do I get in return? Am I able to take full advantage of the taxes I pay? No!!!

Does this mean there is something wrong with public policy? NO! Like I mentioned before we have to face the fact that we a minority in the country and therefore public policy will not be formulated for people like you and me.

[khanak]

Originally Posted by SLK

India's just scared of foreign companies (East India Company rings a bell?).... they were so scared, that for 40 years after independence.... nothing was allowed!

We got to understand when Pepsico makes pepsi... there's nothing TATA can do about that!

Comming back to the topic of protectionism, Does anyone feel that having Indian companies is not important? Is it not important that at the end of the day profits remain in India instead of going to some other country?

Does anyone believe that companies in an India that was just formed would be able to stand up to the financial might and experience of companies from foreign countries?

The market is open now and look at how well so many Indian companies are doing. Does anyone believe we would see them doing as well if they were not allowed to grow.

[khanak]

Originally Posted by extreme_torque

Instead of protecting our industry by making it difficult for the outsiders to enter, why not reduce the taxes and let it be a fair play, a level playing field.

Like I said before

It is pretty much a level playing field now. Anyone can enter the Indian market now and set up production here. Its all upto the manufacturers.

[flyingspur]

Originally Posted by khanak

Does this mean there is something wrong with public policy? NO! Like I mentioned before we have to face the fact that we a minority in the country and therefore public policy will not be formulated for people like you and me.

And therefore we are to be happy with the 100% duty? Or raise it to 200% ? Either you're lost or I've lost your point. I am part of the public. I am entitled to have my own views on this so-called public policy and there's nothing wrong with me saying it here. If I find something wrong with it, I will most definitely express it. And now since you've said we,you consider yourself part of this minority that we are. Which makes it completely redundant for you to have brought up the whole rich-poor/dont compare thailand to India/whatever it is that you brought up in the first place.

And yes, since your latest post is now up. Only allowing any manufacturer into the market is far from a level playing field. Ferraris are not made everywhere that they are sold, in the world. Why can you not understand that a 100% import duty completely nullifies the concept of an open market?

[khanak]

Originally Posted by flyingspur

And therefore we are to be happy with the 100% duty? Or raise it to 200% ? Either you're lost or I've lost your point. I am part of the public. I am entitled to have my own views on this so-called public policy and there's nothing wrong with me saying it here. If I find something wrong with it, I will most definitely express it. And now since you've said we,you consider yourself part of this minority that we are. Which makes it completely redundant for you to have brought up the whole rich-poor/dont compare thailand to India/whatever it is that you brought up in the first place.

The 100% duty has nothing to do with the poor, it will even affect the rich. Without the 100% duty companies would not want to set up base in India and will simply import cars into India. What then happens to those of us that have done our engineering? Will we not get to set up the assembly line? What happens to those of us that have studies business? Will we not get to manage the 1000s of employees that work at the plant? What happens to the 1000s of semi skilled workers? Will they not get to work at the plant? What happens to the 10000s of unskilled workers. Will they not get to construct the plant? The effect of this is not just limited to the company. There are a tonne of companies that will be affected when a company closes its production facilities in a country. Component manufacturers will lose out on contracts. Caterers will lose out on contracts. The list goes on. Therefore IMO it is essential to make sure production stays in India.

India is a huge market for everything from cars to computers. Its not like it is unfair to ask a car company to set up production in our country. We are large enough to demand an investment and have foreign companies obey our demands.

[khanak]

Originally Posted by apachelongbow

Remember the classic case of BAL? Made only scooters until the opening up of the market made BAL make the awsome pulsar and today, they are India's best bike makers.

Would Bajaj have the money, experience or technical know how to make something of Pulsar quality when it just started up and had to compete with International players that had the money, experience and techincal knowledge to wipe companies like Bajaj out of the market.

[flyingspur]

Originally Posted by khanak

The 100% duty has nothing to do with the poor, it will even affect the rich. Without the 100% duty companies would not want to set up base in India and will simply import cars into India. What then happens to those of us that have done our engineering? Will we not get to set up the assembly line? What happens to those of us that have studies business? Will we not get to manage the 1000s of employees that work at the plant? What happens to the 1000s of semi skilled workers? Will they not get to work at the plant? What happens to the 10000s of unskilled workers. Will they not get to construct the plant? The effect of this is not just limited to the company. There are a tonne of companies that will be affected when a company closes its production facilities in a country. Component manufacturers will lose out on contracts. Caterers will lose out on contracts. The list goes on. Therefore IMO it is essential to make sure production stays in India.

India is a huge market for everything from cars to computers. Its not like it is unfair to ask a car company to set up production in our country. We are large enough to demand an investment and have foreign companies obey our demands.

Offer them a cess (offer the companies some incentives rather than targeting the taxpayers bank account!!)

Scrap homologation (as it is its not the cars that need to be tested for road-worthiness, its the bloody roads that should be tested for car-worthiness)

Find alternative means (please come up with innovative suggestions)

Original suggestion. Bring the import duty down? I don't remember anyone here saying scrap it altogether anyway!

[flyingspur]

Originally Posted by khanak

Would Bajaj have the money, experience or technical know how to make something of Pulsar quality when it just started up and had to compete with International players that had the money, experience and techincal knowledge to wipe companies like Bajaj out of the market.

I think he was trying to say it's alright that it was going on for so many years. It's time to fix things now. Or do you want to wait still further, till the Reva guys or the Rhino SUV guys accomplish world domination?

[khanak]

Originally Posted by flyingspur

Offer them a cess (offer the companies some incentives rather than targeting the taxpayers bank account!!)

Scrap homologation (as it is its not the cars that need to be tested for road-worthiness, its the bloody roads that should be tested for car-worthiness)

Find alternative means (please come up with innovative suggestions)

Original suggestion. Bring the import duty down? I don't remember anyone here saying scrap it altogether anyway!

Offer them a Cess? You mean offer them tax benefits? I guess that would be another way around it, but it would mean a loss in revenue for the government which in turn means that the government will look for other ways to get that income, Where do you think the government is going to find some extra money? Our pockets!!

[khanak]

Originally Posted by flyingspur

I think he was trying to say it's alright that it was going on for so many years. It's time to fix things now. Or do you want to wait still further, till the Reva guys or the Rhino SUV guys accomplish world domination?

For the 1000th time

The market is now open and has been for quite some time. Anyone can enter the market if they want. Companies like Bajaj, Tata and Mahindra are no longer protected.

[flyingspur]

Originally Posted by khanak

Offer them a Cess? You mean offer them tax benefits? I guess that would be another way around it, but it would mean a loss in revenue for the government which in turn means that the government will look for other ways to get that income, Where do you think the government is going to find some extra money? Our pockets!!

I doubt it will total up to the 100% customs duty. Keep an open mind my friend. I'm trying to think of solutions here. Atleast I'm suggesting something. Bottomline is I'm not happy with the cent duty and I can't possibly be pleased by people saying things like let the rich guys pay up if they want luxuries or arre bas sirf 100, 200 banaa dene ka na! phir sab khush! What BS.

[flyingspur]

Originally Posted by khanak

For the 1000th time

The market is now open and has been for quite some time. Anyone can enter the market if they want. Companies like Bajaj, Tata and Mahindra are no longer protected.

I doubt I've replied to your statement 1000 times, but here's my firm reply. 100% duty is nothing but protection.

[khanak]

Originally Posted by flyingspur

I doubt I've replied to your statement 1000 times, but here's my firm reply. 100% duty is nothing but protection.

I guess it was my fault for not being clear.

It is protection for companies with production facilities in India but not protection for companies based in India which IMO is a good thing. This way we have the option of getting any car any manufacturer in the world wants to make in India while ensuring that that car is made in India.