This article reads well and is an indication that no economic theory what ever may be its proven success rate in any advanced economy does not work in India.This establishes another theory that well off people in Indian society are not affected by the general theory of price effect on demand.The fact that FMCGs perform well in India is evident as to how the well off society in India behave differently despite rise in prices due to their increased propensity to consume which is inelastic to the increase in prices.This only shows the prevalnce of black money and the ineffectiveness of the taxation policies and their implementation.In our economy which is characterired by predominance of black money, corruption,mal adminisration,it is uncharacteristic to compare the economic theories of advnced nations.The realities of poverty,unemployment and ever widening disparities of income and wealth have to be factored in while evaluationg the economic theories.This article should be an eye opener.
from: Dr.T.V.Gopalakrishnan
This is in response to the article that appeared in Business Line dated 15/04/12 by TCA Srinivasa Raghavan)
Posted on: Apr 15, 2012 at 09:05 IST
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