If Customer (Consumer) is King, Supplier (Producer) is God!

A customer is someone who pays for the goods or services that he requires from a supplier, producer or service provider. When goods and services are in short supply, then the situation is advantageous for the producer or supplier. In this situation, the seller or supplier could be choosy and take advantage of the situation to exploit the customer in many ways. The situation is sometimes defined as a seller's market.

On the other hand, when goods and services are in abundance, the customer can be choosy and the situation becomes a buyer's market. In such a scenario, the supplier or producer has to adopt many tactics to win over the customers to buy his products or services. If there are many producers or suppliers for the same goods or services, then the market becomes competitive as the producers compete with many tactics to win over the customers. This situation is specially advantageous for the customer and customer feels like a king as he or she is at liberty to order any thing as he or she pleases. In a buyer's market, the customer is king!

But in reality, both kind of situations are not good for the society or nation as both situation leads to exploitation of some kind. The economic activities in both kind of situations are not self sustaining, but self damaging. Both situations cause much distress to some people and all in the society are not happy.

In the case of short supply, consumers are deprived of some useful products and services that are required for the smooth and happy progress of their lives.

While in the case of over supply, the producers would not be able to sustain their production or service activities as the demand for those keeps declining.

Producers or suppliers have to work hard and use higher efforts and intelligence to create their products or device their services. In most cases, they produce and provide goods and services that are not ordinarily done by their individual customers. Thus, producers are creators and earthly creators are minor manifestations of God's creative power on earth.

Imagine the situation when no one has created the air planes that we fly, the mobile phones that we use for instant communications, the computers that removed our memory limitations, the food that we eat, the cloths that we wear, the buildings that we live, the vehicles that made our travel easier, etc. We would have remained as our naked tribal ancestors who lived in the jungles! If the situation has changed to our current level of material progress and civilization, much credit has to go to those among us who did those creative works. God is the supreme creative mind of the universe and that is why we worship God. Our own fellow beings who participated in the creative acts on our earth on behalf of God are all agents of God in creativity. Applying this logic, I consider all suppliers and producers of goods and services on our earth as God's special agents who are there to help us.

But when we extent that concept a little more, it is not difficult to find that we too are suppliers of goods or services of some kind to some others. Thus it is not difficult to deduce that we are both consumers and suppliers at the same time.

We are subjects of God and agents of God at the same time!

We are both kings and gods at the same time!

We are neither inferior nor superior, but are minor replicas of God on earth! Yes, indeed that is exactly the way we are on this earth.

We may have some superior ability in some field, but we do not have that superior ability in all fields.We need to depend on some one else for something always while many may depend on us always for something.

When we recognize this fundamental truth, we gain the superior wisdom to respect each other by seeing the reflections of God in every other person. When all of us attain that superior wisdom, we all would realize the ultimate truth that we are sons of God.

Then jointly and collectively we love each other, work for each other and collectively worship our father God!

Isn't not a marvelous situation?

Is it such a difficult philosophy to understand? Perhaps not, but in reality, yes!

Generating Employment for Indians- A Layman's Suggestions !

I am not an economist nor an expert in finding solutions to the complex problems of a complex nation like my own !

But like many others like me, I do keep a watch on developed nations such as the United States of America or China or Japan, that have been making visible material progress. Their Gross Domestic Product (GDP), per capita income ,  human development indices (HDI), etc., amply correlated by visible physical features vindicate their superiority!

For example, my country India has been with a shamefully low per capita GDP of about $ 3700 . The actual purchasing power of the citizens of India are much lower than this figure. Regrettably, it appears that the Indian policy makers no longer feel the shame ! [See the GDP per capita income list of the world's nations here !]

Indians keep justifying the low per capita GDP on account of the huge population. But then they forget about China whose population as well as the per capita GDP are much higher ! This clearly shows that the Indian situation is on account of poor governance , administrative policies and gross mismanagement of public affairs! Perhaps all these happen due to the defective democratic governance system that the country has adopted ever since it had become a modern republic. 

Indians are too keen to watch the politics and policies of America rather than their own. I too am no exception. What makes me salute the American system is the importance that they give in generating employment to the citizens of the country. A US president is evaluated as good if he could implement policies which generate employment to the US nationals.

But unfortunately no Indian politician talks about employment generation. Neither is employment a factor for evaluating the Indian government!

There are thousand an one ways by which the Indian government can generate employment for millions of its unemployed so that they can at least have a decent living and surely elevate them much above the poverty line.

" Give me a fish, I eat for day; teach me to fish, I eat for a life time!"

This famous quote, supposed to be the favorite of Mahatma Gandhi is not unknown to those in the higher ruler ship of India. Regrettably they keep thinking of the ways in which such a teaching can be imparted to the millions only to conclude that such a thing is not practical in a country populated so heavily!

When thousands of Indians could make a decent living by the so called medical transcription work, I couldn't help saluting the US policy makers who could force their medical practitioners to shell out some of their incomes to others down the line who are only skilled for some lower level clerical jobs!

The westerners are advanced because they have realized the overall advantage of distributing the abnormal wealth at some hands to those who are not so privileged or fortunate. They too were having the mindset of the present day Indians before they faced the 'great economic depression after the world war-I'. But that had made them learn a lesson. And that lesson was about the importance of sharing the profits of business and industry to the larger populace for sustaining economic activities. 

The great depression forced economists to analyze the reasons for such a failure of economy when industrial production was at its peak! They found that all productions are useless unless there is a market that absorb the products and services. And such a sustainable market is possible only when business and industry willingly share their profits with their employees and the workers thereby enhancing the purchasing power of the people as a whole!

They learnt that the profits held up by large Corporate entities are not going to make the country or the economy progress. If they keep producing and accumulating profits for some time without enough sharing, there would not be any markets for their products and services and eventually their businesses would come to a grinding halt.

So, for longer sustainability of business, business tycoons and business leaders have to find ways to distribute their huge cash surplus held up by a few of them to a larger group of people, so that the latter could get some decent  income margins to be spent for more goods and services.  

Again at every such transaction, the government is going to earn from the taxes.

Indian corporates and government  are going to repeat the mistake that the westerners did early in the 20th century which triggered the Great Depression of the 1929.

Why I say this ?

Read this report : Large Indian companies sitting on Rs 4.2 lakh cr excess cash  !!

Had they distributed even 10 % of this cash, which in any case they have amassed by paying less to their employees in comparison to the world standards, the Indian markets would boom. The Indian government would gain substantially in taxes, both income tax and other taxes.

The cash surplus of the Indian corporates are because of their reluctance to pay dividends to their share holders and their reluctance to pay better wages to their lower rung workers and employees.

The cash surplus with them cause them to show a higher book value for their shares. This in turn causes poor investors to shell out their hard earned cash to purchase shares of these companies at higher margins. The investors do not get any return from the company as such. The investors seem to make profits by selling their high margin shares to other gullible investors. The corporates have nothing to lose !

Why such a situation which actually do not help the majority of the Indian public to enhance their incomes so that they have some better  incomes for acquiring better goods and services ?

Whatever the low income, the government tax them heavily. What is the logic in taxing an individual who makes Rs 150,000/- ( ~ $ 3000) per month and the corporate which makes Rs 150 million at the same rate ?

The individual is left with Rs. 100,000 /- where as the corporate is left with Rs.100 million. Since both are individual entities, the money deprivation shock to the individual is much more. The excess money accumulated by the corporate does not do any good for the country ordinarily. Because it it blocked so long as they find some means of spending it. The individual on the other hand has many unfulfilled needs. He could have released that 50,000 immediately to the market had it not been cut by the government as tax. The government would have got an equivalent amount or much more had this money were used by the individual for meeting his unfulfilled needs.

This kind of illogical mind sets in the policy planning levels actually make India a poor nation. They do such things which causes the money generation points dry before they mature.

Killing the goose ?

India can become the richest nation in the world, had the negative growth policies made out by egoistic know-all mindset of those concerned decide to ease out a bit by relaxing their muscles and minds.

Instead of distributing money for various labour generating schemes  here and there, if the government allows all higher income group salaried people who pay more than say Rs.300,000 per year as income tax to have a regular personal assistant for jobs like driver, gardener, security, etc and the payments made to such people to the extent of say Rs.200,000 as fully exempted from tax, can you imagine the number of regular employment generated in India overnight ?

Of course, some people might always do some manipulations. That should not be the reason for not trying out some innovative methods.

That kind of an initiative can make the government popular overnight . Not only they become popular, the economy would boom. It is a kind of action that can force the higher income of the upper strata of society to percolate downwards immediately.

In reality the government's income is not going to get reduced. It will also boom !

There could be many such moves. But for that the government should be ready to take suggestions from all, even from laymen like me. If the suggestions are good for the country they should be broadminded to implement it.

How long they keep themselves isolated in self made chambers of petty politics ?

The country needs people of a different mindset  for thinking and implementing such radical thoughts !

Let us hope we get such thinking people by 2020 !


View the linked list of all Blogs of the Author Here ! ]

Indian Budget: Killing the Goose that lays Golden Eggs!

There is a likelihood that some of you might have heard of the folklore about the foolish man who killed his magic goose which provided him a golden egg every day. His greed for amassing wealth as quickly as possible compelled him to take the decision of killing his goose to take out all the golden eggs from its belly all at once !

While watching the news channels that beamed this years budget proposals made by the Hon'ble Finance Minister of India Union, some how the above said story came to my mind.

I am not an economist or expert in the economic nitty-gritties of a massively populated and complex country like India.

The minister and his team of experts know better than me about running the country's finances.

No doubt about that.

Yet, common men like me are compelled to think otherwise.

Are the so-called financial experts administering the country trying to kill its economy and its people by their tax administration and taxation policies?

I do not say that citizens should not be taxed. But taxation should not be such a way that it forces the very sources to get dried up and initiates negative growth.


It is the common man with some income who is the fundamental element that keeps the country in shape. The common people are the base for the country's existence, its markets , its richness and its governmental system.

The government in any case takes a cut of its own on every rupee that is transacted in each and every money exchange or transactions by various kinds of indirect taxes. Every goods and services have an indirect tax component embedded in them. As long as people buy goods and services, the government makes money as taxes, even when the business men do not make a profit.

Take for example the airline ticket charges. Even if the airline is ready to take you free, the government will not allow them to do it. A few thousand rupees per hour of flying per seat is mandated to be paid to the government as various kinds of taxes.


If this is the ground reality, if the government wants to enlarge its coffers, what should it do?

Should it cut the source of money or encourage the people to have more transactions ?

If you are thinking like the man who killed his goose, you would rather opt for the first choice !

That is taking away the money of the common man by taxing him at the source of his income by the so-called income tax !

Is it prudent to think of cutting the income of a person who is finding it hard to adjust his own personal budget ?

Some amount of money is required for meeting his essential expenditure of his house hold. That means he or she would spend that much money almost compulsorily. There is not much choice for saving any from that. The person is not likely to have any substantial sum of money with him at any time.

He earns some money and he keeps spending it for his needs.

And what he spends is directly going into the market economy of the country with the government benefiting first by way of indirect taxation. Indirect taxes like excise duties, sales tax, service tax and the like totalling 10 percent or more goes to the government in every transactions involving goods and services.

The money gives out by an individual for purchasing goods and services goes into the hands of service providers who in turn uses the money to source their inputs. This way financial transactions keep taking place.


If the same amount changes hand 10 times an year, the government gets an amount equal to the original amount as indirect taxes. If the number of transactions increase, the major beneficiary is the government. The government will have more to spend on priorities of its own, making further boost to the economy by enhancing the opportunities of income to the individual citizens. The cycle of progress proceeds in positive trend in this case.

Thus governments that are run by wise and intelligent people would create a situation wherein the above said positive economic trend is maintained.

Such a government would have main economic priorities with an objective of enhancing individual incomes at the lower levels and creating more opportunities for people to come into the income generation bracket.

In simple terms, this means their priorities would be to create more and more employment and to see that the lower level incomes of citizens are raised progressively so that they can afford more and more goods and services.

Once this is ensured, the government need not worry much about its sources of income for meeting the expenses for providing a better administration.

Hence a wise thinking government would never think of taxing its ordinary citizens by the so-called income tax which essentially cuts down the source of money which supports the country's market for goods and services.

It would perhaps consider to impose direct income tax only when there is a probability of excess  income beyond the capacity of the individual to spend for his needs on goods and services. This excess is likely to be kept idle without any possible transactions in the year or later. An individual who makes an income much more than he needs to maintain his lifestyle would have such an 'idle' excess income which accumulates in his bank account. This excess income accumulation in more and more individuals would cause some individuals to spend loosely creating unjustified price rise in certain kinds of goods, services or assets. There is not much harm if the government tries to cut some of that idle income of an individual by income tax. Essentially, this is the purpose of income tax. It should not be used as the primary means of income generation by the government, if the government is wise !

Now let us see how much money a typical middle class Indian nuclear family needs to sustain their lives in their middle class way of living.

If the head of the family has an income more than this, there is the likelihood of an idle income for this person and he or she could be a probable candidate for 'income taxation'.

By the phrase 'typical middle class Indian nuclear family' I mean a family consisting of a husband and a wife with not more than two dependant children, living in an urban area, with one of the adult member having a regular income from some kind of economic activity.

Now let us examine what could be the most realistic monthly expenditure this Indian family unit would have on a conservative and realistic approach.

For this analysis, I take the first quarter of 2012 as my base and the expenses as given are typically applicable on an average for such a family.

The members of this family are careful with their income and expenses and are responsible citizens with no vices or bad habits to drain out their incomes.

All expenses are on a monthly average basis and the numbers are in Indian Rupees (INR).

The following gives the monthly expense account for this Indian family:

1. Rice (30 kg ) :              1000

2. Wheat flour (20 kg) :    600

3. Pulses (4 kg) :              350

4. Vegetables :                 600

5. Milk (1.5 L):                1400

6. Cooking Oil (4L):        400 

7. Spices/salt etc:            200

8. Misc eatables:            1200

9. News Paper  :              200
10. Domestic fuel :          450

11. Electricity :               600

12. Local transport :      2000
13. House rent (2 BR):  5500

14. Telephone/Mobile:    600

15. DTH/Cable TV :        350

16. Education Expenses: 2000

17. Clothing (prorata) :   2000

18. Health Insurance:      2000

19. EMI for loans:         15000 

20. Vacation travel:        2500
21. Other services:         3000

       Total ---------         41250 ; Say, 40000 per month or just $ 800 per month.

This amounts to nearly INR 500,000 or less than $ 10,000 annually.

In my simple common sense, India government should not consider taxing any of its citizens having an income less than this amount by way of income tax.

Any income above this may be deemed as the surplus or taxable income which could be taxed in a few slabs at the rate in the range 10-70 %.

The above should be applicable only for individuals.

Since corporates are entities who are engines for economic growth, their incomes should be taxed at a lower rate, allowing them to sustain and grow.

These are just suggestions from a common man.

Past history tells that those in authority and position do not listen to the voices of the common man while they enjoy such positions and powers.

Any way whether to kill the golden goose or not is up to its owner !

[When color TV and telephones were common things in most parts of the world, for Indians they were super luxuries before 1980 !  Indian leaders controlling the goverment used to consider electronic goods as a luxury and never allowed these things to be brought to India even from abroad.

Bringing any kind of electronic consumer goods to India was treated as a sin and an offense of the highest order. With this mind set they kept the country away from contemporary progress for over three decades. Things changed when the old leadership got changed.

If this is any lesson, people should think of supporting young leaders for getting effective and radical changes in the government policies in accordance with the common man's thoughts. Progressive financial management thoughts and policies can only come from younger brains ! A UP like wave is needed for the whole of India !]