My friend Charles the other day, gave me some food for thought. He pointed out how prices of some essential commodities that serve everyday living have doubled in some cases, in a very short span of 6 months or less. He went on to say that the public, in a scenario as this, have come to accept a 20 to 30% hike over a year as something ‘inevitable’ “You don’t see protests on the streets as you once saw Prem” he pointed out
Shyam who was pensive all the while joined in. “you know something—you see a lot of prosperity especially around the areas that have recently become a part of Bangalore don’t you?’ ‘ Yeah it is the tech savvy professional and his high heeled family alright” agreed Charles. “Forget that—don’t you see the yesterday farmer at the wheels of cars that make you J?” Of course a good part of this population sold their Agri lands—sometimes acres of them– at fancy prices to Builders who put up swanky superstructures on them’ Recognize that Inflation has a good side too’ Shyam ended saying
‘Yeah agreed Charles, “ There is less land available for Agri A sad part is that those still sticking to their land have left them fallow as Agri labour is hard to get and deploy. The common crib is that a good lot of these people refrain from engaging in tough labor as Rice anyway is available for them at Rs 1 a kg.!” The Urban labor now looks at ‘end to end contracts’ and no piecemeal labor as before. It is the “Jones effect” buddy. The Plumber, the Electrician the Carpenter and the——look for a Total package Contract (giving the poor Decorator a run for his living) and nothing of the standalone piecemeal type”
“What does this mean to us buddy”? Uttered Shyam exasperated. If we don’t go about increasing capacities and augmenting supplies rather than harp on Monetary policies to do the trick, we would all have to spend a good part of our time in our Kitchen Gardens ( don’t know how I can put one up in my apartment on the 14th floor) and break our heads to develop Carpentry , Plumbing Electrical and –skills. Just like in the West buddy’ .And this is not all—just some lifestyle changes that you MBAs might have to make—Manage every situation yourself ha ha! Inflation is a great leveler.
Professor- Finance