The 'squeeze mentality': Bane of Indian business: Why a Satyam scam happens?

Consider some examples...

1. The government of India has reduced the prices of ATF (Aircraft turbine fuel) many times. But the airlines are reluctant to reduce fares. Air India did so after some prodding by Praful Patel. The private carriers are still dragging their feet. Why?

2. The input costs of making many FMCGs has gone drastically in the last two months, especially after the oil prices nose-dived. But all FMCG companies (especially soap makers, detergent makers) are loath to reduce prices. Why?

3. The local pakoda shop in my neighbourhood still sells pakodas at inflated prices. The reason (or excuse?) for increasing prices a few months back was the high cost of edible oils. Now that edible oil prices have come down quite a bit, why don't the pakoda-wallahs in town reduce prices? They were quick to raise prices a few months back.

The answer lies in the 'chusso' mentality or the 'squeeze mentality' of Indian businessmen. The aim is to squeeze as much profit as one can. Hell with the consumer! Since all the companies have this mentality, no one does price-cutting to drive up sales volumes. A kind of cartel forms in every sector. Whether it is all the pakodawallahs in the city or big soap makers like Hindustan Unilever, Nirma or Godrej Soaps.

The obvious reason is excess greed. But it makes little economic sense. This is hardly the healthy capitalism that everybody wants. No one believes in cutting prices and driving up volumes. It is just getting hefty margins.

It is very peculiar to India. The reason being that the Bania-Marwadi (due regards to the communities) is the dominant mentality of Indian business. And it is the Banias and Marwadis who have given birth to the 'squeeze' mentality. They have perfected 'squeezing' profits into an art form.

Indian businesses believe in sales, not in marketing. The customer comes last in their consideration. The businesses care a damn of the needs of the consumer. Since all the businesses are the 'Squeeze' types, the poor Indian customer has nowhere to go. He has to grin and bear it.

It is because of this grab-as-much-as-you-can mentality that a Satyam Computers scam happens. The greedy mindset often becomes so powerful that one forgets the fear of being caught.