Thursday, December 3, 2015

The Principle of Car Permits distorts the value of a Car

Whilst it was admirable of the new Govt. in its Budget to recommend the scrapping of all duty concession on vehicles, the following rage of those who were losing this ENTITLEMENT certainly disgusted me.

It is supposedly the crème of state society that get this permit, and for them to complain like common scavenges losing their scavenging rights was to say the least despicable.  

Take Doctors. They get a free Education that costs the state Rs20M and within a short time they can build a thriving private practice, where they earn a lot of money, and often use their position in a state hospital to canvass for patients! Frankly they should have NO MORE rights to any more subsidy beyond what they have already received. In any case the permit system, shifts the resources from possibly other more productive uses, to buying a car. After all Doctors buy fancy cars, and then thy take a loan to pay for it, and charge their patients through their noses to pay this sometimes Rs200K a month lease payment!

In a similar vein, the Public Servant who got the permit was a senor public servant, who moonlights. In any case with a Permit, he still has to buy a car, and so to pay for this as above, earns a lot of money moonlighting against the rules of his employment, misusing his position of trust that the Public have given.
As mentioned above, this too distorts values, as he is forced into a car purchase when another more attractive means like educating his kids instead of paying a huge lease payment for a car!

I do not need to make any mention of Elected people, as they use this as some sort of status symbol, that detracts from their real purpose of servants of the people, who with their permits transports them into rulers of people!

In short it is clear that the allocation of resources for the common good is distorted, as permits only helps foreign car companies to sell cars in Sri Lanka that then need foreign petroleum to run them, foreign tires to wheel them, and foreign spare parts to repair them, making it the most absurd subsidy that distorts human behavior against all interests of the Country.  

As politicians benefited from this, they had no intention of explain how bad this is for the economy. Therefore this story here in this blog entry has not been made clear to people, so that they would not have complained at all if they realized he public knew the truth about the real harm permits do to the Sri Lankan Economy.

I will still beg the Govt. NOT to give any concession and abandon this now!

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