Expensive Purchases

A few days ago, Apple updated its iMac line up with Hasswell processors. In addition, they included better GPU and next generation Wifi 802.11ac to iMacs. What’s the news for me? Sitting in India itself is a news these days. We bought our first Apple product about a year ago in the form of iMac at ₹64900. Since then, Apple refreshed/upgraded iMacs exactly twice and increased $100 in the US. How is that translating to Indian buyers? ₹99900 is the starting price! I was shocked just as anyone else. But later on dug deeper about the matter.
As per last union budget 2013-14, every mobile phone more than ₹2000 is considered to be luxurious and hence will be taxed more! Most consumer electronics like TV and computers got costlier. More recently, government wanted to curb imports as our great currency Rupee had a freefall and therefore all electronics displays to attract 36% duty for even personal purchases abroad and bringing to India. Couple more things I noticed was, computer and consumer electronics have attracted increased duty for last couple of years! So only falling rupee showed common people that products are really getting priced out of reach.
What our government is doing with the increased cash inflow? It is going to spend on food bills, giving away subsidised mobile phones and tablets to so called underprivileged people. The problems do not stop here. We have a population of 1300 millions and we all need foreign income because of some inevitable imports. Let us assume a few ambitious folks want to start a business in consumer electronics? Unbearable inventory costs plus unlimited redtapism. If an IT professional gets fired and wants to start something in IT, it may cost him one year’s living cost to just buy a computer! RBI said, no more interest free EMIs, that means lesser incentive to buy. Put it other way, people will postpone more purchases translating to lesser turnover at the industry level. Instead of taking measures to improve economic activity we are going other way round. Who will be affected? So called middle class income. Having a below poverty ration card enables people to make a living from government itself. Rich people would have made some non cash assets most of which could appreciate in value. But for people with mid range income will have to face modern India phenomenon of increased cost of living, and reduced opportunities!