Are you wondering what is the connection between Inflation, Infrastructure and Quality?
There is a huge connection. Let me explain.
I once had a German shoe which I used for almost 7 years – lot of tough use. Lots of walking, travelling by public transport like train – where it would get abused. It was a leather shoe which I used through 3-4 Mumbai monsoons – I wanted to get rid of it.
However the shoe lived through all that abuse. After so much of use, I got rid of it, BECAUSE I was bored using it.
Now stop wondering why would an Indian have a LEATHER shoe made in Germany? No, the story is about quality.
I was once given a FREE umbrella by Standard Chartered Bank (this must have been n 1991) – and it IS a really superior quality umbrella. I STILL HAVE IT, AND USED IT TODAY. Imagine an umbrella lasting you about 23 years. A shoe for 7 years.
Now take the prices of food stuff in India. You may find it difficult to believe that tomatoes for which you can pay as high a price as Rs. 100 a kilo in retail can fetch as less as Rs. 5 for the farmer. Most of the money in between go to the rent seekers.
If the government provided excellent infra (at a fee perhaps) like cold storage, regional collection centers, regional processing centers, good roads, and make sure that the number of intermediaries are dramatically reduced, ….at what price would you get tomatoes?
I am sure you are able to see the connect between quality and inflation (if a shoe lasts 8 years and EVEN if it were to cost Rs. 4000 for a pair, it means about Rs. 500 a month for a perod of 8 years!). In case of clothes we have reached that stage – most of us throw out out dresses because we are tired of them, not because they are torn. We change phones and other electronic stuff because some new features have been added in new phones. We change cars because insurance and maintenance costs keep rising for an old car. WE HAVE A CHOICE.
India has significant amount of unused land, a huge unemployed population, significant amount of water going waste – Imagine if all this were to be nicely used to grow vegetables, fruits, etc – Infra provided by the government….imagine what this can do to availability fruits, vegetables, milk, and consequently to prices!
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