Friday, August 11, 2006

Mumbai/Delhi - Cheap Cities or Cheap Expectations

There has been recent UBS survey on Mumbai and Delhi being the "cheapest" cities in the world. OK OK dont fall off your seats yet.
Rashmi Bansal in her guest column in Business Standard proves that if we consider Purchasing power vs prices, this may not be true. The numbers speak the truth, however I believe that Mumbai, Delhi are still cheap cities. They are not cheap because of the purchasing power and cost of goods but cheap because of Peoples expectations.
Rashmi rightly points out "cheap" is a relative term --- but I would take a slightly different approach to "Relative". In Mumbai and Delhi its relative to the "Percieved value" and "expected benefit"....
I agree that the purchasing power is less in Mumbai but then there is something for everyone irrespective of his purchasing power. A daily wage worker can have a "Wada pav", a middle class guy" a pav bhaji/Chinese food" and the upmarket can gorge on the "Five-course meal"---- All of them equally tasty
The inference- everyone can gorge on tasty food irrespective of his purchasing power.
The daily worker can drink "cutting chai", Middle class can have his "cuppa" in a hotel and Upmarket have the "Coffee days/Baristas"
The inference - everyone gets an affordable cuppa through different channels.
The daily worker can have free water at road side stalls, Middle class "The Bisleri/Aquafina" and Upmarkets "Evian".
Again everyone of this fulfils thirst.
The daily wage guy when he falls sick (maybe due to the free water) has the municipal hospitals for treatment, the middle class the mid-sized general wards of pvt Nursing homes and the upmarket the Speacial rooms of Lilavati.
The inference- Everyone can get treated, how effectively and efficeintly is the trouble. But again the daily wage worker "percieved value and expected benefits" are satisfied by the Muncipal hospitals as are the upmarkets by the Lilavatis
The "percieved value"(taste) of the wadapav for the price one pays and the "expected benefit" of (filling the stomach) to the daily wage earner is the same as the five course meal to the upmarket. On the other hand in some of the countries I have visited the options are limited. Water needs to be purchased and downmarket food options are too limited.
A city becomes costly when peoples "Expectations" soar beyond their current "perceived and expected value". If the dail wage earner feels that the "wada pav" is not what he deserves and desires for a five course meal then the city becomes costly. If Bisleri is the only water desired by people then the water becomes costly, else its free. But this does not hapen in India.
Over the years we Indians are conditioned to live within our means, have low expectations and be Happy.
We dont expect good roads to be good hence even a single strech of non-potholed road (barring the ups and downs of gutter covers) makes us happy--- "Perceived value"
We dont expect good public transport, hence the 4th seat in the Mumbai local gives us a feeling of having achieved the "expected benefit" and "perceived value' of the ticket.
We dont expect to have good Public health systems for masses hence the perceived value of the floor in the Municipal hospital and whatever free medicines given seems high.
Hence Yes Mumbai Is cheap, Yes Delhi is cheap, depending on wether we "Expect" people to survive on the Wada Pav, cutting chai and potholed roads or Expect them to a have decent meal, clean water and public health benefits.
It shall remain cheap as long as we dont "Expect" more from the administration, we dont "Expect" parity in basic necessities for the masses and the classes.
YES WE ARE CHEAP NOT IN PRICES BUT IN EXPECTATIONS AND THATs NOTHING TO BE PROUD OF ......

3 comments:

manish said...

Yeah,very true,you've brought forth a very good perspective :-)

Anonymous said...

yeah .....pretty thoughtful..that expectations thing ..
But One can label a particular standardised quality to be cheap or expensive ..we are not talkin about satisfaction of the people here ...On the same level of quality how do different cities fare is wat the report sought out to do!!

Anonymous said...

You are right. Its like the stockmarket. That also runs on expectations.