Following the heat turned up by the latest FDI note from the govt, the question being debated is " should discounts be regulated?". I will answer this with trepidation. Yes. but with moderation. The money flowing in is foreign money. If this money is being used to discount to take the selling price below cost of production then it is unfair to the free market economy. It will destroy the foundation of any industry. It could undermine the Indian business which is trying to make a feasible business within the framework of Indian laws. However, there is nothing wrong in legitimately challenging the cost of production using lowering of cost of production from better management sourcing or productivity. Beyond saying that selling below cost of production is predatory,the govt must have only a limited role.
Thursday, March 31, 2016
Should Govt Regulate Discounts
Following the heat turned up by the latest FDI note from the govt, the question being debated is " should discounts be regulated?". I will answer this with trepidation. Yes. but with moderation. The money flowing in is foreign money. If this money is being used to discount to take the selling price below cost of production then it is unfair to the free market economy. It will destroy the foundation of any industry. It could undermine the Indian business which is trying to make a feasible business within the framework of Indian laws. However, there is nothing wrong in legitimately challenging the cost of production using lowering of cost of production from better management sourcing or productivity. Beyond saying that selling below cost of production is predatory,the govt must have only a limited role.
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