Monday, 24 October 2016

Of Pani Puri stalls and Laissez Faire Economics

I absolutely love Pani Puri and given that its not easy to make it at home everyday, I am a regular at Pani Puri stalls around my house. I am sure this is the case with a lot of people. I can infer this from the crowd that I see around Pani Puri stalls everyday. 

I can assure you that I take my Pani Puri very seriously. I even have  my ideal Pani Puri vendor to Pani Puri Consumer ratio (it is 1:4). I love other variants of chaat which are available at the Pani Puri stall as well. I don't discriminate. I love them all. 

One day, I saw a post on Facebook around government regulation and how it is necessary. A friend of mine, who I assume is a laissez faire supporter, posted a one line comment on that post about how Pani Puri stalls are an amazing example of how laissez faire system works when implemented perfectly. It got me thinking and I thought why not spell out the details. After all, Pani Puri is a product and it does have a market. 

Here are some of my observations: 

  • There are no licensing requirements for Pani Puri Stall. Literally anyone who has a little money can start a Pani Puri stall. 
  • There is no minimum or maximum size for the Pani Puri stall which is mandated. Every individual owner is free to decide the shape and size of their stall. 
  • There are no restrictions in terms of the recipe. Everyone gets to make it the way they want to make it. This has led to a lot of innovation in the Pani Puri field. There are different flavors that are available now. There are atleast three-four variants of fillings. 
  • Owners of Pani Puri stalls can set their own price and very often, they change based on popularity of the stall. This hasn't resulted in rapid increase in prices of Pani Puri. 
  • There is so much competition that almost every street corner now has a Pani Puri stall and yet they continue to grow in number. 
  • Some stalls have their USP. They might have a bigger range of products. They might have a healthier variety of Puri. They might sell it for cheap. They might have the highest variety in terms of flavors. There is innovation happening in the sector. 
  • Customer needs in terms of variety, location, value for money and hygiene are all being catered to easily. 
  • There is stall loyalty to an extent but that doesn't mean that customers don't shift if they find a better stall. Customers shift stalls if they feel like any of their needs are not being met or more of their needs are being met by some other stall. It is because of this reason that you will see stalls either adapting quickly or shutting down shop. 
  • There is amazing ease of entry and exit. There are literally no restrictions to enter the Pani Puri market and no consequences or rules for closing down your stall. 
  • Over time, rich people who are bored and have a penchant for the adventurous have also pushed the Pani Puri industry to introduce Vodka Pani Puri. I think checking this google image link can give you an idea of how far people have pushed the Pani Puri boundary. 
  • If a Pani Puri stall sells sub standard food or adulterated food or stale food, customers will shift immediately and that will lead to the closing down of the stall. Beware the invisible hand of the market. 
I have a feeling the Pani Puri example can be used as an example of all parts of the Laissez Faire concept. 

It makes me wonder how different would the world be if we adopted this method for everything. I am still learning more about the free market economy but I can tell you that I have been mighty impressed with the logic and the results so far. 

I could explain the various ways in which this concept might benefit market for other products but I will let you make that connection yourself. 

I have Pani Puris to eat. 


  1. Nice :) But no... making pani-puri is very easy and quick. Try sometime!

    One thing you have missed out is the amount of efforts these puris take. These people have really hard lives. Most of these people wake up 4AM in the morning and work until 2PM to get these puris ready. Then they start moving to their usual places. It can get very difficult to break-even and move anywhere ahead in life, if one keeps doing this.

    One trivia: One story says that Pani puri had originated in South Bihar, which was formerly the Magadha Region (mostly by migrated people). Another story says that it was created by a team of hakims and vaidyas to administer medicine to Nawab Wajid (Lucknow), to cure an upset stomach. Since that gourmet fellow would not have taken the medicines as such, it was given as spice in the water and filling.

  2. I did not include all of this because it doesn't fit the context of the post. I am sure their job is difficult.

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  4. I love different street food. I think that street food can tell more about country, people and culture more, than 'traditional' cuisine at restaurants. I even wrote an essay about it. If you want, you can read it here:

  5. Hahahaha. To be honest just because of paani puri I m able to read and clearly understand the whole blog post and the concept of laissez faire.

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