Respected Prime Minister Sri Narendra Modi Ji,
I’m a mediocre salaried class always dream to own the things which I aspire or looks around.
In the new age mass communications and with the advent of Private Channels fully devoted with alluring Ads have an occupied mind to possess a thing which the rising so called elite Brand Ambassadors Promotes.
Thanks to the intermittent pay revisions, I could get the increment, which helped me to qualify to have a credit card issued by the leading banker.
The newly owned magic plastic money pushed me to straight upon to a down-town posh Shopping Arcade selling Multi-Brand shoe wears. With occupied mind of aspirations I hooked upon to a rack decked with the life size cutouts of the Popular Brand Ambassador, choose a pair of shoe in the least price range (although beyond my budget) and merchandised it smartly through the plastic money. Off course at the same time I was having a pair of shoes in the economic range in not so popular brand since last 02 years nicely flashed with the Shoe Polish.
I, with the proud owner of the new popular brand, preferred to wear it on the weekends with the simultaneous use of that old pairs in the weekdays. Once, while getting ready to the office I chanced upon to see the dream Pairs, shocked to notice that the sole of the shoes has got cracked. Here I started to sweat and asked myself– How come a popular brand which I strived hard to have it, hardly six months old, used only in 24 occasions with due care, developed the cracked sole? How could my general brand in economic price last long used even in the bad roads and all seasons? The comparison started clicking to my mind right during the ways from house to office, at office and back from the office. Lastly I could get the gamut of queries.
1. Pricing - Popular Brand Vrs. Not So Popular Brand – when having same tax rates.
2. Durability – Popular Brand Vrs. Not So Popular Brand – when using same raw materials and mended in the same country and skilled workers.
3. Advertisements – Popular Brand Vrs. Not So Popular Brand – advocates more durability by the both, off course by the stalwarts in case of Popular Brand.
Here I got the answer to my self-asked queries.
1. The durability is the question mark advocated by the Popular Brands. They take it granted by selling products promoted by the Popular Brand Ambassadors, with the help of toothless laws of maintaining quality and consumers’ right protection.
2. The advertisement by the popular figure (mostly the cricketers) in the cricket mad country engulfs in the mind of the people across India including myself with the misleading jingles prepared by the Ad Agencies and Experts without any Regulatory Mechanism.
3. Pricing is the last bug which is widely erratically used across all the products ranging from Needle to Rockets with exorbitant rates so to accommodate the industries to earn profit leap bound.
The last but the most important point- Pricing backed with the Costing which our Government never minds to regulate. A very difficult question to be explained – Why the two comparing products when evenly designed, manufactured with same raw materials are priced differently? Isn’t the costing is equal in both the cases? What the Government Agencies are doing? What the law of the land is protecting of discriminate prices?
Answer is simple. In the ever increasing price rise regime, our Govt. is silent and has no mindset to have the tools and mechanism to plug the exorbitant price rise. Government never minds to have the regulation to go for stricter rule of mandatory maintenance of cost record of the products and services so as to verify the legitimacy of allocation of costs in the product by the Industries. Let’s rewind the pricing issue of the Popular Shoe Brand. Popular Shoe Brand priced Rs. 3000/- in which 50 % of the cost is allotted for the costs involved for Brand Marketing. Simply if we purchase a product promoted by Mahendra Singh Dhoni, the Indian Cricket Captain for Rs. 3000/-, I spend Rs. 1500/- for Dhoni. How far it is justified in allocating the cost while pricing and if at all the industries requires the Brand Ambassador to promote the Brand than what shall be the threshold limit.
My queries to the costing for pricing is not limited to the Branded Shoe, we everyday consumes product, services unevenly priced with no back up justification of pricing and off course the pricing regulation is backed with the best costing regulation which our Govt. is shying out with the pressure from the Industries.
Lately, Ministry of Corporate Affairs has came out with the new legislation of Companies (Cost Records and Audit Rules) notified on 1st July 2014 which is nothing but toothless legislation truncated various products and industries from the ambit of the law and the limits have been extended so as to put cushion on various products and industrial undertakings. It is an astonishing fact of the New Govt. going in the same path of their predecessors-UPAs, came to power with an ambition to check the spiraling inflation and corruption.
The new legislation is nothing but a spoof gate for the players of the industrial products, services and consumer goods etc. to easily collect their earmarked/targeted margin by way of allocating the cost while pricing. Honest Pricing prevails when there is any regulatory to check the proper costing and allocation, which itself defeats with the new legislation.
India has got a premier Institution – The Institute of Cost Accountants of India – which produces the professional expertise in Cost and Management Accounting every year and Indian Government could have taken the opportunity of their expertise in cost regulation and management accounting. India has inked the GATT agreement and with the advent of Multi Disciplinary Practices our profession of Cost and Management Accountancy is taking the back-seat in exploring the global consultancy market as India itself denounces the profession and never minds to give the platform to apply their expertise. Ultimately Govt. is killing two preys from one Bullet. In one hand promoting the market player in distorted price fixing by way of adding fuel to Inflation, corruption and in other hand killing the aspirations of CMA professionals with barren laboratory to test their skill.
It is not too late even, when the Indian voters have chosen you for good governance including we CMA professionals and your test period is only 60 months, you have ample time to re-think of the legislations your Ministry have passed so to move India to healthier situation by way of promoting the CMA profession which strives hard to make India a global leader.
CMA Sanjay Kumar Dey