Monday, February 02, 2015

Rural maybe but rustic no more.

Seems that rural folk are no longer satisfied with cheap local products but are increasingly buying brands. Not only are they buying fancy clothes but they are using expensive non-essential goods, such as liquid hand wash, green tea, noodles, breakfast cereals, coffee, hair conditioners and salty snacks. Cream biscuits, carbonated drinks and bread are the top 3 Fast Moving Consumer Goods purchased in rural areas. While the use of liquid hand wash and sanitary napkins is hygienic we may expect an epidemic of obesity, diabetes and dental caries from the use of white bread, soft drinks, cream biscuits and instant noodles. The survey proves what we have been writing for years - that the aspirations of people are the same the world over. No one wants to be poor, dependent on handouts thrown at them at election times for survival. Everyone wants a good standard of living, new gadgets, which enhance the quality of life, to travel in comfort and quality entertainment. It is common to see laborers, who are illiterate and do not know English, smartly using smart phones. India has just 15 cars per 1000 people, China has 60, Brazil has 200 while the US has 600 cars per 1000 people. Yet there are those who want to cars to become more expensive, apparently to reduce pollution. Why is it that when the US has 40 times as many cars as in India we do not hear of pollution due to car exhausts in US cities which have very high buildings, blocking free movement of air. This is because the cheap price of diesel in India encourages purchase of cars with diesel engines, which are highly polluting, whereas in the US diesel is more expensive than petrol and so is only used by trucks. Already taxes on cars and fuel are among the highest in the world but people would still prefer to travel by cars than by two-wheelers. In the last 3 financial years there was much sympathy for the Congress because it was having to subsidise fuel due to the high international price of crude. Turns out that the government was earning more from taxes than it was paying out in subsidies. Although the price of crude has fallen by 60% and oil companies have slashed the price of Aviation Turbine Fuel airlines are unable to reduce the price of tickets because of taxes by various state governments. Air Asia of Malaysia and Cebu Airlines of Philippine have abolished fuel surcharge but not airlines in India. So it is too expensive to fly. But there maybe some good in taxing gadgets out of reach of the poor. Apparently computers are making people dumb and Albert Einstein was afraid that technology would make us all idiots. Who cares!

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