Bhoo wears the thinking cap!

As if that is possible!

Price Vs Quality: A few quick clarifications

Posted by bhoo on August 12, 2010

Azagu made a twist in my argument and changed topic about inclusive growth, and made it sound like having expensive restaurants and movie halls are opposed to “inclusive growth”.

A huge no here – I am a HUGE proponent of inclusive growth.  But, I certainly believe that inclusive growth comes by better production, which does not come by restrictions, and worse still – price control.  My article ends with a note on cellular phones, and I was wondering how cellular phones became so inclusive in spite of price control, and that is what we need to think about.  Nobody will deny that cellular phones in India has seen “inclusive” growth.

In another note, I am not a fool to think that higher prices mean better quality.  All I am saying is – subsidies usually mean poorer quality.  The opposite is not true, and I do not mean that at all.  So, compelling someone to offer subsidies or a low price – definitely motivates poorer quality.  Lower price is better coming because of competition – and definitely not by compulsion.  That is the point.


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