Growing up in the 70s and 80s in urban middle India was to know what shortages are. The state strangled enterprise and everything from a scooter to a phone to butter, milk and grain was scarce. The civics and history textbooks stank of double standards as they spoke about an India that was far away from the life of the person for whom that English textbook was written. I call it the Manoj (Bharat) Kumar movies phase of India—we were losers but were brainwashed into looking back at a glorious past. A past that was distant enough in its historical dividend not to matter to people struggling to find an average “service class” livelihood. Of course, “business class” then meant not an airline seat but something totally different.
Socialism and state were dirty words for me back then. The economics classes I took in the Delhi School of Economics were “market-oriented” in that we learnt that markets were good and that capitalism was the way for a country to grow. Then in 1991 we began opening up the economy and embraced, though still a bit gingerly, the capitalist way. The first fruits of that openness were indeed more goods and services, lower prices, understanding what the phrase “spoilt for choice” meant and better, much better, service. That was the low hanging fruit of competition that the consumer celebrated but now, 20 years later, I find myself questioning that very system whose coming I celebrated with such gusto. Possibly the problem is in the version of capitalism that walks the street today. I call it predatory capitalism in which profits must be made at any cost. At the cost of the people who work to produce the goods and services for the free market. At the cost of the consumers in that free market. Theory said that competition would ensure that prices that did not clear the markets would fall and that shoddy companies would lose to competitors.
The turning of animal spirits into maneaters, to borrow a phrase from rural development minister Jairam Ramesh, is visible everywhere. The financial sector and the effect of predatory capitalism has been well documented by Expense Account. But look around and you see its effect in many other places as well. What we have right now are stories and anecdotes, but these usually boil over when the fraud acquires minimum of seven zeros behind a positive integer in the financial sector or when there is an excess of malpractice in the other areas. Take the stories coming out of corporate hospital chains. The stories I hear, that you must hear too, are around the test and scalpel happy doctors who have revenue targets and cut open women who may have delivered normally or put in stents in people who’ve just had a meal they shouldn’t have had. Or the one about how hospital bills now come to the exact amount that the health insurance policy has as a limit—no matter what the disease. Then there are other stories. You must have experienced the one where electronic goods support teams are instructed to change the picture tube of a TV when all that is not working is the fuse. Incidentally, I have heard this story from one of the engineers on the team of one of the largest overseas TV makers that sell in India. Or the story about the pan-India coffee shop that wants to drink to this kind of predatory capitalism. Ever wondered why their water purifiers never work and you’re forced to pay for the water they are by law supposed to serve? Or why their computer suddenly begins to stop taking the cheaper combo-meals deals on a high-sales day like Valentine’s Day? Or the one where one of the biggest retail chains routinely raises its prices and then slashes them to offer on their tri-annual discount sale?
India does not have a strong consumer rights movement that takes up these causes in a systematic, issue- and evidence-based manner. Most are the breast-beating mar gaye, lut gaye ban-the-company kind of outfits. The need for a consumer movement that focuses on malpractice, exposes those who perpetrate it and then suggest ways to reform (we can’t do without the TV company or the coffee shop – I don’t want to go back to watching Krishi Darshan on a grainy black and white TV whose picture came only when somebody climbed the two floors to the roof and held the antenna the right way for about three minutes) rather than threats to shut them down. I believe that the first stage of the happy consumer is over. It is a matter of time when an intelligent consumer movement begins taking on some of these issues. From what I hear, several big-ticket public interest litigations are now cooking and it is a matter of time before these trigger such a movement. This column will document these, so keep reading!
Monika Halan works in the area of financial literacy and financial intermediation policy and is a certified financial planner. She is editor, Mint Money, and Yale World Fellow 2011. She can be reached at email@example.com