"Lala Class" hitting the Indian Economy hard.

As in previous article "World Trade Organization….started?” I tried to make an assessment of the scenario after the Second World War to the contemporary situation of World Economy. At the end of the article I wrote about "Lala Class", and who are similar to pest not to any living thing but to Indian Economy and other Asian and African countries. In this article my focus will be solely on this Class but from Indian perspective and Indian Economic situations.

In India "Lala" is common term for the rich and prosperous; this "Lala" term is synonymous to respect and higher class in Hindi; but at the same time it has devilish aspect also which is common and realistic, that is hoarder, black-marketer, poor-exploiter, and selfish.


This "Lala Class" has been Selfish and because of their selfishness Indian Economy has to suffer a lot and still its suffering though. Lala has been profit reaper; his selfishness has always curbed him to invest in his own down-trodden industry which is running on old and eroded equipments and implements. Lala Class investment is always for their luxury and properties. This diversion from social and economic responsibilities of a profit reaper, to the personal investment in luxury and property, has made Economy and Industry go starve for investment.

Lala Class, which was surviving and flourishing, under the mechanism of "Protectionism" was dumbstruck when the India opened to globalization. Government was protecting this industry which was lacking financial stability and which was incompetent to the Hi-tech foreign Industry. This Local Industry ran by Lala, was much lagging behind in price competency, technology, management, organization and marketing in competition to the foreign industry. Foreign industry (esp. European and American) is way ahead in all aspects for greater fulfillment with efficiency and effectiveness; that’s why they dominate the world market and industry even today.

Meanwhile, Protectionism was brought to save local industry; as we know, as a layman living in globalizing world, would surely say that Protectionism is evil. But keeping in mind the situation and need for inflicting protectionism was significant step for the betterment of local industry. As we read in previous article that most Asian and African countries got sovereignty and independence after the World War Second; these countries were being exploited for decades and/or centuries for the European and American Industry. In these countries Local industry was nearly non-existent and retarded, which were running on decades old technology. As the European domination diminished, Local Industry of these countries esp. Indian Industry, started developing and flourishing. Indian Government brought in Protectionism to save and make this Industry survive; this was fruitful step for the Economy growth however.

"Protectionism" gave an opportunity to the Local Industry to grow, develop and learn new ethos of business and bring in Hi-technology. As Indian Government expected Indian Rich Class to be benevolent and intelligent, but contrary to this it turn out to be miser and selfish. Though very few companies like Godrej, Bajaj, Campa Cola etc. and few other progressive companies, brought in state-of-art technology, but they used this technology more than its limit of depreciation. There purpose was to bring new technology only to meet demand which was ever rising in teeming population of India. They never heeded to the quality of product and with few players in their respective fields they dictated the price and market, focusing on quantity rather than keeping quantity proportional to quality. With no competition in market they dominated the Supply and Demand indexes and they were always on the gainer side irrespective of the Demand and Supply of products or goods. Demand rises due to need and Supply is fulfilled by industry's production, and imbalance between Demand and Supply can lead to the chaos and also degradation of Economy. This kind of situation was ever present in Indian Economy, Demand was always higher and Supply was kept restricted by the companies, though ample opportunities and incentives were given to the Companies to grow production by Government. As their domination of Demand and Supply indexes reaped them much higher gains and profit; this domination gave them an advantage (in real sense which was disadvantage) that they won't be compelled to invest in industry or/and technology.

After the Liberalization of Indian Economy and coming of Globalization in World Economy in 1991, scope of opportunities changed drastically. Lala Class has been wounded gravely with this but still the in the Domestic and Rural Market of Indian Economy Lalas rules. Lala Class still has deep roots and strong foot holds in the Domestic Market of India, which can’t easily be uprooted by MNC’s and Progressive Companies of India and Abroad. Yet MNC’s like Reliance has penetrated into the Rural Economy but no other companies have been able to tap the potential and unflinching growth in Rural Domestic Market of India. Rural Domestic Market is strong and stable and mostly depends on Lala’s Companies. There are some factors behind it for the Lala’s strong footholds in Rural Economy:

• Conventional & Conservative Mentality: Rural of India relies on conventional thing and conservative mentality; There conventional bent of mind doesn’t allows them to opt for newer and better things. They always smell a rat in everything new. This is the reason they don’t easily switch to the other products.

• Poverty: Poverty in rural India is miserable that’s why MNC’s fears to penetrate this undiscovered market. Though poverty is undeniable truth in India, however, rural India have huge middle class population and some rich communities as well.

• Price Sensitivity: India’s 30 percent of population is under poverty line, thus, price sensitivity has to be there. Indian society which is basically a middle class, always opt for the cheaper products irrespective of the quality.

• Less Motivation: Indian Government has been offering less motivation to MNC’s for their penetration in Rural Economy of India.

• Disintegrated & Disorganized: The Rural Economy of India is disintegrated and disorganized. If MNC’s made their presence in the Rural Economy then for sure the organization and integration would take place.

There may be more factors but these factors are ample enough to strengthen and sustain footholds in the Rural Economy by Lala Class. Many readers would be thinking that this is generalization of the native Industrial class of India as Lala Class. Lala Class is the generalization of the profit reapers and rich class of India who don't believe in progress and they don’t want their monopoly to be hindered by anything. Lala Class are the account holders of worth millions in Swiss Banks and they're the one who are controlling black money structure which accounts at 40 percent of Indian economy. Now the reader would have assessment of the havoc that Lala Class has made to Indian Economy.

UPA in their last Government (2004-09) brought in many schemes to tap and unearth black money and track concealed assets of Non-Tax Payers or Tax Evaders. Because of this Government was able to collect huge sum through these schemes which goes into Billions of Dollars. With the Coming of the MNC’s in Urban Economy of India, Lala Class is diminishing from most of the urban areas of India. Though still they have vital presence in the Indian Economy and this class is dragging the development backward and hindering at the same the development of Indian Economy.

Lalaism is an idea and mentality of the Indian open minded affluent class. Globalization, Liberalization, Indian Government Schemes and MNC’s has affected very badly Indian Lala Class, but it still exists and hitting the Indian Economy hard.