Economics of color TVs

The Hindu has an article on the economics of Color TV promised by DMK.

He said there were 1.5 crore ration card holders in the State. Each cardholder was entitled to 20 kg rice a month. At present, it was being sold at Rs.3.50 a kg. If the price were reduced to Rs.2, the additional subsidy burden would be Rs.1.50 per kg. For the 30 crore kg that would be dispensed through the Public Distribution System, the additional subsidy would be Rs.45 crore. This would come to Rs.540 crore annually.

Explaining how the DMK would implement the scheme if it came to power, he said there was a total of 156 lakh families in the State. Of this, 53 lakh were below the poverty line. At Rs.2,000 a television set, and assuming that all those under the poverty line needed to be given one, this scheme would cost only Rs.1,060 crore. If the DMK came to power, it would implement the programme over two years. The Government needed to spend Rs.530 crore a year.

Stressing that the schemes would not be a burden on the State, he added additional resources could be mobilised by targeting revenue generating sectors such as liquor manufacturing and trade.

Going by this argument, if the government chooses not to give color TVs, say, then it can afford to give Rice at an additional Rs1.50 off. That is, they can give Rice at Rs 0.50 per kg!

At Rs 2,000 a set, what kind of TV will you get? If people are given the choice, I guess they will go in for Rice at 50 paisa, rather than a 14" barebones TV.

Wonder if the govt will also pay the cable TV bill.. hmm..

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