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Business News/ Opinion / Death of a queue: India after economic reform

Death of a queue: India after economic reform

Death of a queue: India after economic reform


One is not speaking here of those equipped with an army of assistants to carry out their sundry errands; instead, the question is addressed to the middle class that populates and drives the cities and towns that we inhabit.

What happened here is probably one of the best eulogies that can—at the beginning of a decade that at the least promises to be a period of enormous consolidation—be paid to economic reforms that first surfaced as an idea in 1980-81 and then gradually picked up steam in the rest of that decade to explode in 1991-92.

It is a fallout of what in economic jargon is termed the process of “disintermediation", and has led to a win-win situation. Exactly as the word describes it, what reforms have done is to eliminate the intermediary and facilitated direct contact between the consumer and the service provider.

Also Read Anil Padmanabhan’s earlier columns

In this, the biggest disintermediation has been that of the role of the government as the sole entity in the economic system. To the consumer, it has been a splendid development. At one level, it has led to the emergence of competition and hence multiple choices at lower prices. At another, the entire interface between the consumer and the service provider has changed as it minimized contact. In this, information technology has been an incredible enabler through the development of e-commerce. So imagine the time saved, not to speak of the tedium of standing in a queue— the norms of which are so rarely adhered to, unless (as in the Delhi Metro) done by fief.

All the more when one remembers what it meant to interface with a government service provider. Growing up in the 1970s (if one’s memory holds good), we had to pay a licence fee for owning and operating a radio! I recall having had to stand in a queue at the post office for hours to tender the fee. Alternatively, if one was lucky enough to own a landline, it was another effort to tender the monthly bill; similarly with respect to water and electricity dues. Getting a passport was a complete nightmare, what with having to stand in one queue to verify documents, another to deposit the fee and then finally another one to submit the documents—at the least it was a day-long exercise in frustration. And of course, the task of getting a railway ticket was even worse, with queues forming in the early hours of the morning, while the counter would open only after 8am; now, with the click of a mouse, one can book a ticket.

So what reforms have done in the last three decades is to systematically undo the service delivery model and put in place a faster, secure and more reliable system. Of course, technology, particularly the advent of the Internet, has made this task consummately easy. For instance, all utility bills can now be automatically paid out by your Internet bank account; the system is so smart that you even receive an e-receipt in your inbox once the task is done. In fact, we now take this ability for granted and baulk when we do, on occasions, end up in a queue. To be sure though, thanks to the terror menace, some queues at public places such as hotels, railway stations and airport entrances will probably have to be endured forever.

It is not just the consumer; even the service provider has benefited immensely from the process of disintermediation. Not only are they able to serve the consumers (the number of cellphone connections in the country at the end of November was 506.04 million, which is more than the population of the US), they are able to do so at a minimum cost. Further, the elimination of the government’s monopoly has meant the emergence of multiple private players.

In other instances, it has, by destroying the hierarchy of service dissemination, contributed in completely toppling the pecking order of business. An apt example would be the spread of ATM machines. I still recall that a senior Reserve Bank of India official had in an interview, given immediately after the 1997 currency crisis in South-East Asia, remarked that India would never be affected as private banks would never be able to match the public sector banks for the sheer width of the country they cover through a branch network. The official even dismissed suggestions that the ATM could be an alternative to branch networks. The last decade showed us how the official completely misread the epochal change that was under way.

So did no one cop out? Of course they did. The delivery model, which revolved on a strict hierarchy of intermediaries, fostered a network that acted as an impediment as opposed to being a facilitator. Those thriving in the previous system therefore lost out.

Any regrets? There shouldn’t be; today, for the first time, in theory at least and practice partly, there is a greater opportunity to be shared around. And we owe this to disintermediation.

Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comment at

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Published: 03 Jan 2010, 10:34 PM IST
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