The Hindu Business Line : Same price, better quality<I> </I>

The 2005-06 annual report of TVS Motor Company talks of entry-level motorcycles being available at prices as low as Rs 30,000, and goes on to claim that very few product categories, besides computers, have seen this kind of a change in affordability with performance.

Computers, of course, have exemplified this extraordinary phenomenon where entry-level prices have remained more or less at the same level for years even as the performance delivered by the product keeps improving all the time.

In the mid-1980s, when newspapers were just beginning to bring in computers to replace their clackety typewriters, a computer terminal with barely about 64 kilobytes (yes, kilobytes) of internal memory and with bare bones text-processing capability would cost about Rs 30,000. In today's rupees, that would be in excess of Rs 60,000. Yet, entry-level computers of today are available at no more than Rs 15,000 and without doubt much more capable and versatile than the predecessors of the mid-1980s.

Likewise television sets. Those who watched the Asian Games of 1982 that marked the birth of colour television transmission in the country would have paid in excess of Rs 10,000 for their simple, yet bulky 20-inch colour sets. There was no remote-control, only knobs and buttons to select the channels or to tune them. Anyway, the facility to switch channels was a pointless luxury because there was only the Doordarshan channel you could watch. Today, for Rs 10,000 you can get a much more sophisticated device, with remote-control, automatic tuning, stereo sound and what not.

Over the years the lightening or the elimination of the once-heavy taxes on such goods no doubt eased prices downward; with better technology and with competition among the many producers also adding to the downward pressure on prices, one has seen a virtuous cycle of falling prices, increasing consumption and better scale economies playing out for many years much to consumer delight.

May the list of such goods expand.

K. Venugopal