Cars are so damn expensive

I’m finally succumbing and buying a Honda City. This is a subcompact car. In the rest of the world, this would be among the cheaper cars on the road, and cost about $15000 at the high end. In India, it costs over $25000 at the high end, and you have to go high end if you want, oh say airbags. There are of course at least 2 types of subber compacts than the City on the roads so the City actually clocks in as a luxury car. At $25k, of course it would. Of course the City is a large car in India given how crowded the place is: the  Civic looks huge, and the Accord looks immense. The Accord also clocks in at $50k for the high end. Twice what it costs in the rest of the free world. I mean, what the hell? On the one hand, its probably a good thing that cars cost so much, keeps the roads less crowded and all so the taxes are working in a perverse way, but on the other hand, it just seems wrong.

The two best ads on Indian TV

Not that I’m the world’s most prolific TV watcher, but from the few hours of exposure I’m now ready to nominate the nominees for the best ads on Indian TV.

Maruti Suzuki’s “Which way to the nearest service station” ad

and Airtel’s “Let’s just communicate” ad. Although it is quite surprising that Airtel chose the Israel-Palestine dispute to illustrate this. It’s not as if India has run out of conflicts recently that we have to go abroad looking for a good heart-tugging dispute.

Meditating about Incentives

Ever since I read Freakonomics, I’ve been big on thinking about incentives. But this picture just shows you why traffic in India is such a mess. Not a single fine over Rs 500. Most of them about Rs 100. For those of you keeping track at home, Rs 100 is what a fresh college graduate working at Google India makes in about 30 minutes of work. Let’s say at Infosys it takes her 2 hours of work. Even so this is ridiculous. Consider that traffic in Bangalore is a permanent parking lot on many main streets, breaking the law for the additional 15 minutes pays for itself very easily.

The problem here is the wide disparity in incomes. Rs 500 is actually a lot of money for most Indians. So long as we have one law for people in Bangalore as well as the rest of the state it will always be the case that huge numbers of people break the law with impunity because the punishment is so lax.

So we should follow a system like Norway where people are fined according to income and not by a fixed schedule? See the problem there is that cops are so poorly paid here. Imagine you’re a poor cop on the traffic beat. You stop a well paid software engineer for “jumping traffic signal.” The fine in the socialist system works out to be Rs 10000. So what do you do? Ticket him? Or promise to look the other way for a mere Rs 500?

So we not only need to revise the fines, we also need to start paying our cops more. Except, we can’t do that till we start levying higher fines. And so it goes.

Recently The New Yorker had this very funny article about driving in China. It reads like the author has been driving in India all along.

In which John Galt moves to India

Successive state and central governments in India have believed that it is their responsibility to deliver all manner of services. Governments therefore are involved in electricity generation and distribution, law and order, public transport, water, telephones, banks, and every other thing you might expect the Government to be involved in. Curiously the Government was never involved in delivering health care or education. Or rather it was involved, but it was never the only source for those things, and most people used the private sector for education and health anyway.

However, while it used to be that only the Government would provide many of those services, India today is a Republican wet dream. The Government hasn’t yet gotten out of these industries, but most people trust the private sector to provide the real service, that it’s a wonder the Government still wants to provide them.

• Electricity: Anybody serious about having electricity delivered reliably has their own private diesel generator. Imagine the size of Infosys’s private generation system, probably puts the state of Karnataka’s generation system to shame
•  Security: Everybody has their own private security fellow sitting at the gate/office entrance “guarding the premises.”
• Transport: Many employers provide their own bus/taxi service to ensure that their employees can get to work on time reliably and safely.
• Water: Of course the corporation can’t provide enough water or even clean water so we have a booming business in water delivered by the tankful, by the bottle and every other way imaginable, not to mention wells at every construction.
• Telephones: The number of BSNL/MTNL landlines installed in India is actually coming down as people realise that all you really need is a cell phone. What’s more even landlines are now installed by private companies and nobody who wants instant installation and service bothers with the Government monopoly. AirTel seems to be the big success here.
• Banks: For a long time now, people have flocked to private banks for all their services, ICICI Bank is the big success here.
• Finally in healthcare and education, we’ve always been very private sector oriented. Government healthcare and education is a joke. The rich people get the best services, the middle class gets middling services, the rest get poor services, just as it should be in any proud capitalist society.

All in all, for all our socialist leanings, Mitt Romney would be so at home. And of course we would never care for Mike Huckabee.

Learn Something New Everyday – I

I’m sure half of India knew this already but it is only now that I’ve learnt this. Apparently the Tamil movie Billa starring Rajnikanth is a scene by scene remake of the Amitabh-starrer Don. Both of which were superhits of course. Don was made in 1978, Billa in 1980. In 2007, Don was remade in Hindi with Shah Rukh Khan as Don. It was a super hit of course. So naturally, Billa was remade in Tamil (but immediately in 2007) with an Ajith bloke starring in it. The new Billa doesn’t seem to be such a hot movie, however.

First they took our jobs

Now they take our apples. At the local food supermarket, red delicious apples, the sticker on it claims that it was grown in Washington State. And at Rs 120/kg not that much more expensive than the $1-$1.50/lb you pay in the US. Globalisation was supposed to be all about agricultural produce flowing from the less developed countries to the more developed ones. Presumably Washington State invests serious money to subsidise its apple farmers?