Friday, August 5, 2016

Adapt or perish

"Blessed is the man, who having nothing to say, abstains from giving wordy evidence of the fact."
George Eliot (British, 1819-1880)
Word for the day
Connubial (adj)
Of marriage or wedlock; matrimonial; conjugal, e.g., connubial love.
Malice towards none
The scene in Rajya Sabha during GST Bill debate was very similar to Sooraj Barjatya's family drama.
All 125crore Indians must have wished together - O' Lord please keep it like this always! Amen!
First random thought this morning
Those who were expecting fireworks in the market on Thursday morning, might be little disappointed.
But I do not see any reason for them to be disheartened. The fireworks will happen over next decade or so.
For now, perhaps the revelers might have exhausted their stock of firecrackers little too early. Wait till the new stock arrives!

Adapt or perish

The unanimous vote for the constitutional amendment that will enable implementation of a national indirect tax by replacing a myriad of regional and local taxes is definitely a landmark reform. This will certainly clear many hurdles and pave way for a faster economic growth.
However, I may reiterate that economic reforms do not necessarily result in more profit and convenience to people in the immediate term. To the contrary, economic reforms are more likely to cause pain and inconvenience in the immediate term as these involve fundamental changes in the processes and practices of doing business and consuming goods and services.
The economic paradigm shifts with each progressive reform. The businesses, investors and consumers need to fully assimilate it and adapt to the new regime. Those who fail to adapt to the changed reality fast, run the risk of becoming redundant under the new economic paradigm.
During 1970s and 1980s the government used to publish a list of businesses (including business groups) who were termed as "large" under the provisions of the Monopolistic and Restrictive Trade Practices Act 1969. From the country's top 50 business groups in 1980s, not more than 5 would figure in the list of top 100 today. Only a few people in their 20s and 30s today would even be aware of those names. Most of these businesses vanished because they could not adapt to the evolving (a) economic realities and (b) technology.
Even internationally, just 4 of the top 20 global corporations in 1989 were present in the list 25yr later in 2014.
A more pertinent question do I need to change my investment strategy due to GST? Will discuss more on this next week.
 
 

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