I was buying some beer last evening when I chanced upon an attractive car on display. As an automobile enthusiast I checked out the car, and was quite impressed. It was a Nissan Teana, a sedan with great looks, high technology and superb features.
Just then the salesman approached me and, after complimenting his offering, I naturally asked the price at which this car was selling. His reply: “A little over 20 lakhs.” That is about US$40,000.
Since this car must be a fully-built model directly imported into India, I then asked the salesman what the import duty was.
His reply: “116 per cent.”
Can you beat that!
The bunch of morons that make up the government of india are “protecting” some auto MNCs from other auto MNCs.
So Honda, Skoda, Toyota, Fiat, GM, Mitsubishi, et. al. are being “protected” from Nissan.
This is RIDICULOUS!
And do note that this is not a tariff that collects any revenue.
When the tariff is so high, there is zero trade, hence zero revenue.
This tariff screws the consumer, screws the importer, and does nothing for the exchequer either.
Which means the particular persons in-charge of our collective affairs are nuts. Hence their trade minister goes about sabotaging the WTO. They are Nutts Inc.
In my book, the customs department should be abolished.
Let us institute free trade unilaterally.
To download 2 podcasts on the subject, click here.
I've been a reader here for a while, and think most of your posts are excellent. But on this one, I had a couple of questions -
ReplyDelete1. I don't think the government is protecting some MNCs from others. It is protecting MNCs who've invested in manufacturing facilities in India from others who have not made such investment. This helps promote India as an investment destination, more jobs in the country, more income for people leading to more consumption, etc. Is the rate excessive? - maybe. But whats the problem with doling out favours to companies investing in India?
2. I can see why this screws the consumer by reducing choice, but how does this screw the importer / manufacturer? It reduces the size of the marketplace available to Nissan (by effectively eliminating India from Nissan's calculations), but isn't that a cost of doing business that Nissan should have planned for?
Thanks,
I heard your posts...but i also read some of the comments present where i downladed the podcasts...i will try to answer one of them...
ReplyDeleteone the person was asking whether goverment was a stark example the way the strongest was surving...
well let me try to answer this...the pathway for democracy was by demolishing the strongest, the feudalistic system....the fact that a human being is an individual and is an anmial (and not society and animals) the fittest can never survive in the social arena that everybody sees...i personally do not see governments more than a single individual protecting his/her own fundamental rights or an association of people protecting his/her own rights...the reason i use the word association is because i want to distinguish between democracy and a group of consenting individuals...in a democracy not everybody consents to the tyrany of the government...however, in an association there is consent among all individuals to protect their fundamental rights (the association can again be made of a single individual or a group of consenting individuals)....so i feel a government to protect an individuals will always exist in an association...democracy is nothing but a pseudo-feudalistic society (not group of individuals) who push their believes and way of life onto you and everybody....
libertarian gives heed to every individual...it treats every individual as different...a democracy does not...a democracy treats everything as a society....which leads to tyrany....
at the end...even the weakest will survive because each individual/animal will always live and die for his/her own rights...
aaren, think also of the money consumers would save as a result of eliminating tariff. Where would this saved money go except into other sectors of the economy?
ReplyDeleteEither the consumer would use the money to buy other things he needs (or wants) or he would save the money. In that case too, it's easy to see, the money would find it's way into the economy in the form of loans.
Tariffs never create jobs. They only transfer money from the pockets of the people who earned it into the hands of politicians who use it to buy themselves votes.