The problem

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IF Mandal and Masjid were the defining motifs of the last decade, future concern and debate is likely to focus on the market. From the market as the panacea for all our ills to it being the sure route to disaster, the range of positions expressed remain bewilderingly large.

The incorporation of India into the global market following economic reforms has only intensified the debate. For an economy so far governed under the license-permit raj, with the bureaucracy and the political class calling the shots and the average citizen reduced to a supplicant (the mai-baap syndrome) the freedom and the uncertainty associated with the spread of the market cannot but appear threatening, more so since the new rules of the game still remain to be defined.

For long, the common perception about our markets has been governed by notions of poverty and scarcity – that a large proportion of our citizens are close to destitute, have low purchasing power, can at best consume the basics, and are thus undemanding about quality of products or services. This is what our enterprises believed, be they in the public or private sector. ‘Made in India’ was hardly a brand that evoked respect.

The growth of incomes and markets in the last decade has, forever, shattered the perception of a controlled and cocooned existence. The veritable explosion in consumer demand and choice – be it everyday consumer goods or more expensive durable products, in media outlets or telecommunications – and not all, or even most confined to the upper end urban consumer in metros has come as a shock to many. Even more the radical shifts in lifestyle and consumer behaviour. It is almost as if the Indian, for long starved of worthwhile choices, is exercising pent up frenzy.

It is, however, unclear whether the initial excitement occasioned by the discovery of a large middle class market and the initial set of economic reforms involving deregulation and privatization will last. For one, the reform process, despite heroic pronouncements by the policy planners, has clearly slowed down. And surprisingly, or not so, the opposition to both the pace and content of reforms has come not from the public, but from precisely the same business class which had earlier complained about being hemmed in by restrictive rules and regulations. Clearly the skill and the confidence of being able to fend for themselves in a more open and competitive market has still to evolve.

Witness the cries for protection, complaints about unfair competition from foreign players, about the absence of a level playing field. Be it the members of the Bombay club, small scale manufacturers of toys and bicycle parts, or employees of public and private sector service providers – the call is uniform, swadeshi.

There is little doubt that India as a business destination, not just for foreign players but native entrepreneurs, is not hugely attractive. Still too many rules and regulations, too many clearances needed and too dilatory an adjudicatory process in the event of conflicts. Operating in an open and competitive market demands speedy decision-making, which is clearly difficult in our environment.

As, if not more, important has been our inability, barring rare exceptions, of evolving a culture of business suited to the altered circumstances. Customer satisfaction and shareholder value are still unfamiliar concepts to our business class. These demand high product quality, service, predictability and reliability – all key concerns of a discerning consumer. Earlier, the consumer had little choice. No longer so.

Equally important is for our businessmen to move out from the mindset of the home market and think global. To not just protect/expand one’s share in the domestic market but be in a position to compete overseas. All this demands a better knowledge of the operating conditions in foreign lands – from customer preferences to rules and regulations governing technology, labour conditions, ethical practices, and so on.

None of this is going to come easily, particularly for a class not famous for its investments in R&D and innovation. And without acquiring a new business model and culture, many of our firms will go down. We must remember that competition provides little space for the loser.

Central to the success of those of our firms which have made good – be they in products or services – has been an ability to create a brand value. And this has come not just from investing in advertising and marketing, though that definitely helps, but by investing their brand with value. Amul is a good example of success. Maruti or Bajaj, which led their respective segments for years, are today feeling the heat because they got complacent.

Is this shift to a consumerist market and culture with constant global comparisons good for a country still relatively poor and marked by huge inequalities – region, class, caste and gender? Is it that we are sacrificing social goals in pandering to the whims of those with the requisite purchasing power? What would be the long-term implications of converting every activity – be it education, health, culture or politics and social movements– into a marketable commodity? The recent brouhaha over the marketing of the Mahakumbh as a spiritual destination raises all these and other questions, all troubling.

Few of us today are sensitive to, even aware of, the wider implications of the shift to a market friendly dispensation. We could try, as many indeed advocate, to reverse the trend towards privatization, globalization and treating the ‘customer as king’. That possibly would be a tragedy. A more creative response would be to re-tool ourselves to become proficient at the new rules of the game.

This issue of Seminar brings together a spectrum of views, not from theoreticians but practitioners of the new culture of the market. Hopefully the day is not far off when we can point to the ‘Made in India’ brand with pride.