The Comm 101 first lecture drove us through the impact of government intervention on business. Some still believe that government intervention is necessary. Roughly 9% of Comm 101 103 students thought that government should always interfere in business when they were asked “Should there be government interference in business for setting prices” . There were about 41% who argued that interference should depend on product while 9 students of the 52 voters voted that government should interfere only in weak market.

Picture Taken From – http://indianexpress.com/article/cities/delhi/delhi-government-can-now-raise-vat-to-30/

Government interference usually plays spoilsport for strong business monopolies in free market. Recently the newly elected state government of Delhi, India made an amendment that allowed it to hike the Value Added Tax (VAT) on several goods. The government can now hike VAT up to 30%. Tobacco and Petroleum related business got the worst welcome gift and most goods under the “To-Be-Hiked” category were from these industries.[1]

The Delhi government didn’t stop its massive rampage over business monopolies until it doubled the entertainment and luxury tax to 40%. This move by the finance department of Delhi State has resulted in fall in sale of luxurious goods and services in Delhi but a significant increase in revenue of Gurgaon, a city in the National Capital Region (NCR) of Delhi.  [2]

What I Personally believe from my readings and observation is that the big TOBACCO Corporates are putting a bad show in the business world by their constant lobbying of all major political party leaders and central government ministers to get new regulations to counter the Delhi Govt’s VAT policy as well as WHO’s policy of big statutory warning on cigarette packets. In a report of Times Now on TOBACCO LOBBYING , they actually raised questions on the ethical values of cigarette manufacturers , business firms and politicians when the cartel of so called candy-makers tried to reduce the statutory warning on the packet. [3]

The freshly Elected government of Delhi is going on its plan to bring down the cartel of Petroleum, Tobacco and Liquor Industry. This Government Intervention will turn out to be major hindrance for the big corporations that were accused of lobbying earlier this decade. These steps have gained the attention of economic and health experts all over the country as the main declared motive of the government is to discourage the use of liquor, tobacco, and other luxurious item related to these things.

[1] http://indianexpress.com/article/cities/delhi/delhi-government-can-now-raise-vat-to-30/)

[2] ( http://timesofindia.indiatimes.com/entertainment/hindi/bollywood/news/Entertainment-tax-doubled-in-Delhi-Delhis-loss-will-be-Gurgaons-gain/articleshow/47832617.cms )

[3]  http://www.timesnow.tv/Debate-Tobacco-kills-but-not-in-India/videoshow/4474595.cms