Public Distribution Failing in India

15.03.2016 • Emerging Markets

From Vivek Kaul’s Diary (IND) – In his book Naked Economics-Undressing the Dismal Science, the American author Charles Wheelan recounts a very interesting story about his visit to Cuba. Cuba, as you know, dear reader, has been under a communist regime for a very long time.

As Wheelan writes: “Because the visit was licensed by the U.S. government, each member of the delegation was allowed to bring back $100 worth of Cuban merchandise, including cigars. Having been raised in the era of discount stores, we all set out looking for the best price on Cohibas [a premium Cigar brand] so that we could get the most bang for our $100 allowance. After several fruitless hours, we discovered the whole point of communism: The price of cigar was the same everywhere. There is no competition between stores because there is no profit as we know it. Every store sells cigars-and everything else for that matter-at whatever price Fidel Castro (or his brother Raul) tells them to.”

Wheelan had basically experienced in Cuba what we in India call the public distribution system. Further, he had managed to find cigars everywhere he went though at the same price. What this tells us is that the public distribution system in Cuba did work, at least when it came to cigars. In India, it does not.

-Read More Here-

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