Monday, November 29, 2004

Debate on protectionism ...

We've now been having this discussion elsewhere that's turning towards protectionism. My views here ... Feel free to comment.

The debate was in the nature Reliance Infocomm (RI) has "duped" BSNL, MTNL. RI has been fined amounts ranging from Rs.150-350 crores by BSNL (Rs.255 crores), MTNL (Rs.309 crores), DOT (Rs.150 crores).

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> if the "illegal" activity was to the enormous benefit of consumers and citizens,
> then clearly the "law" is stupid, wrong, and immoral, then the interest of consumers
> in having _someone_ point this out must be taken into account when you punish
> the organisation that does it.

Contrary to opinion, "all" that is of "enormous" benefit to consumers
and citizens, even if illegal can't just imply that "law" is stupid.
Maybe, but not always.

There are reasons why "protectionism" exists in certain areas (its
another issue why it still remains in a few areas, but lets not get into
that). Seeking "short term" enormous benefits for consumers and citizens
and allowing _really big_ international players in those areas could
forever wreck the capability of any Indian company to ever go there.

The Bajaj that does an indigenous Pulsar or Tata that did a similar
Indica may haven't got there if Piaggio and Toyota were available at
world level prices in the Indian market.

When and how a particular area should be opened is always subject
to debate, but such things exist for a reason and every country
employs various forms of protectionism (ranging from taxes, quantity/quality
restrictions, import embargo, subsidies, ...). Lets not be led to believe that
everything cheap for the consumer is the best thing in the world. If the
economy opens as much as one thinks/wishes it should, a lot of people
would be jobless (in the long run). That's the unfortunate truth.

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