ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Irrational Car Prices

The automobile industry seems to rouse the most strange economic logic from our legislators. Surely one of the reasons — though not the most important — why the industry has failed to grow is the irrational price policy followed in regard to the industry.

The automobile industry seems to rouse the most strange economic logic from our legislators. Surely one of the reasons — though not the most important — why the industry has failed to grow is the irrational price policy followed in regard to the industry. In spite of known instances of manipulations and high prices, the benefits of price control have been allowed to go to a few consumers rather than to producers through high prices or to the Government through high excise duties. To this irrationality, one more is to be added through the inadequate price rise allowed to the manufacturers to compensate them for the rise in rupee cost due to devaluation. Now our Parliamentarians suggest that even this should not have been allowed.

There is little social justification for benefitting a consumer of a product like a car, which costs almost fifty times the per capita income. On the other hand, the same amount transferred to manufacturers or the Government would serve an economic purpose. It is high time Government examined the rationale of price control over passenger cars and removed it outright

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