Those swinging seventies3 min read . Updated: 11 Apr 2013, 05:10 PM IST
The 70s were a time of limited economic growth when Rajesh Khanna made a nation feel good about itself
This column was first published on 20 July 2012 and had to be republished due to technical glitches.
As I write this column, screen icon Rajesh Khanna has passed away. He belonged to a time when my parents’ generation was young and beautiful and saw every one of his 15 super hit movies in single-screen theatres. Like mine did in the Bombay of the 1970s. Everyone would have their own Rajesh Khanna movie or song memory. Even when we grew up, because of a paucity of good music in the movies of the 1980s and 1990s, the Rajesh Khanna-Kishore Kumar-R.D. Burman songs defined our romantic vocabulary too. At college fests, the young men who crooned one of those numbers won the hearts of the women. That’s why the loss feels so personal to so many of us. News channels are playing songs and dialogues from those movies incessantly and the mood of the moment is presently, very 1970s. So for this column, my thoughts drifted to the economic climate and the laws the government of the day made for consumers in that era, some of which still remain and some which have been remixed to suit modern times.
It was a time when the government’s policies were decidedly socialist and business was viewed with suspicion. Rajesh Khanna’s Namak Haram portrayed this zeitgeist through the story of a fraught friendship between a trade union leader and a rich man’s son. In 1969, the year Khanna shot to superstardom with Aradhana, the government passed the Monopolies and Restrictive Trade Practices (MRTP) Act, aimed at preventing the concentration of economic power to protect consumer interest. But for the next 20 years, the Indian consumer’s choices were restricted by public sector monopolies in electricity, water, roads, railways, civil aviation, oil and gas, and insurance. In other sectors such as steel, aluminum, electricity and banks, new entrants were not allowed. The customer’s right to choice suffered until this regime ended with the economic liberalization of the early 1990s. The MRTP Act was repealed in September 2009 and replaced by the Competition Act of 2002. The aim of this new act was to establish a competition commission to prevent practices restricting competition and to promote and sustain competition in the markets. Despite many monopolies having broken down since this Act came in, the Indian consumer is still not free from the grip of monopolies in some key markets. The Competition Commission of India (CCI) fined 11 cement companies ₹ 6,000 crore in June, finding them guilty of price cartelization.
That was a time when there were severe restrictions on the amount of foreign exchange an Indian travelling abroad could carry because forex was scarce and had to be conserved. In 1973, the Foreign Exchange Regulation Act was passed with this objective. It was replaced by the more liberal Foreign Exchange Management Act in 1999, to suit India’s new, open economy.
The other important economic law of that era was the Patent Act of 1970. This had far reaching implications for the pharmaceutical industry and the price of drugs. Before 1970, the pharma industry was underdeveloped and foreign companies charged very high prices for patented drugs. The Patent Act of 1970 abolished product patent protection in pharmaceuticals. Only the manufacturing process of the drug could be patented. This boosted Indian pharma companies and they became leading producers of generic drugs. Generic drugs cost less because there is intense competition among manufacturers, and this prevented any single company from dictating the market price of the drug. In contrast, in a product patent environment, the pharma company inventing a drug and its licencees are the only ones who can sell it, and they try their best to keep extending the duration of the patent. Drug prices become costlier as the market tends towards monopolies. The old must give way to the new, whether it is laws or showbiz. In 2005, India became a signatory to the World Trade Organization’s Trade Related Aspects of Intellectual Property Rights and we were back to the product patent environment.
In the 1970s, economic laws don’t seem to have been a priority as economic activity itself was limited. There weren’t many brands in any category. There were only bazaars, not malls. Services didn’t offer conveniences. The economy was barely growing. The concept of consumer rights was not even a gleam in the government’s eye. In that period of limited choices, one man on the silver screen tilted his head in a peculiar way, lip-synced melodious songs, mouthed memorable dialogues and made a nation feel good about itself.
Vandana Vasudevan is a graduate from the Indian Institute of Management, Ahmedabad, and writes on mass urban consumer issues. Your comments are welcome at email@example.com
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