I had forwarded the text of my earlier posting titled 'towards people friendly politics', essentially demanding competition in bus transport services, to a few opinion leaders in the city, to which a certain Mr MT responded as below:
Dear Murali,
I respect your views and regard for the private sector. I have been an employee in both sectors, govt and private. I have seen the best and worst of both. Whether it is our country or any other, people in both sectors are indigenous to the country concerned. The private sector is generally driven by the "profit motive" of the owners. Both sectors have as much corruption as possible depending on the country. In some countries, like USA or UK, they get caught and punished. ENRON, Arthur Anderson, World Tel etc were all highly reputed private companies till they were caught and exposed. Nearer home, we have the Harshad Mehtas and Parekhs of the stock market, the Ritu Singhs and Rais [Usha Rectifier] of the private companies and a host of others.
Specifically, with regard to buses, if you take a trip from, say, Bangalore to Hyderabad, once by a private bus and once by a Govt [APRTC or KSRTC] bus, you would see the difference. The private buses have the same crew for the entire journey, against all norms of caution and accident prevention. The Govt buses change the crew every two hours!
Recently there was a news item that people are turning to Govt buses for longer journeys.
I always quote the example of Govt run education institutions, our very own IITs, IIMs and Central Schools. How and why are they considered good. Name one engineering or management college that have earned a similar reputation.
Why then this perception that private is efficient and public is not. There are good and bad in both sectors. Some public service is needed to cater to certain vulnerable sections of society with subsidized costs.
I hope we could agree to disagree, if you are still unconvinced. One way of convincing yourself would be to check out as to how much public money is locked in failed private companies and how they have got away with it, here and in all other countries. [Hyundai's Chairman is in jail today for fraud.]
Regards, MT
My reply
Dear Mr MT
The problem all along has been the government's 'license-permit raaj/ regime'. My first exposure to TVS was as the bus service provider in the city of Madurai. During the emergency, the government nationalised bus services, and TVS was forced to withdraw from the scene altogether. Later, when the government realised that they couldn't manage things themselves, they slowly started 'permit'ting private operations, but with all kinds of conditions imposed on them. This was the beginning of the notorious 'license-permit raaj', with the babu's making all the decisions on what is good for the country and what is not, and twisting and turning the rules to suit their narrow ends. The position has changed very little even till date, particularly in the bus transport services sector. Under such a regime, the TVS's have chosen to keep away, and the Sharma (travels) types, who know how to play ball with the babu's, are together making hay, but at the cost of the 'aam aadmi'. Also, these are the types who are not too bothered about things like brand value, image, etc, and readily resort to all kinds of shortcuts, and short-changings, earning the private sector a bad name in the process. If the unnecessary controls are withdrawn, TVS (and similar reputed business houses) will be happy to come on to scene with huge investments and provide the much needed real and healthy competition to the KSRTC/ BMTC to the benefit of all concerned. In fact, it is in these basic and vital infrastructure areas that their presence is very badly needed in the country today. Instead, they are left to just manufacturing motorbikes and auto components (because there are not that many hindrances from the government there), and in a way contributing to the clutter on our roads. I would hold those opposing the entry of these Corporates into these areas even more guilty of the charge.
Like somebody has very correctly said, every business has to take into account the three E's - Economy, Equity, & Environment, while carrying on their operations. So, first and foremost, they have to be profitable. Yes, the private sector is in it very much for the profits! And, profit-making, I thought, was no longer considered a dirty word, not even in Kolkata; profiteering - may be. And, that's where you need effective competition. I am surprised I am having to repeat these fundamentals!
To the list of excellent companies/ institutions in the government sector that you have listed, I could add the names of BEL, NTPC, etc. But, these are far and few between, and unless they also gear themselves to the changed global scenario, they will also face problems. More than working for any them, I have had the privilege of being a major supplier to the likes of BHEL, NGEF, ABB, Crompton Greaves, ALSTOM, etc, in both the public as well as the private sector, which is when you get the proper business perspective. The Rai's, Ambani's etc have indeed played around and amassed wealth. But, that's what happens when you have the 'control-permit raaj'. Also, those are insignificant compared to the money locked up in failed/ loss-making government undertakings. Whereas in the private sector, these cannot go on for too long, in the case of the government set-ups, it is indefinite, bleeding the exchequer for decades together. Further, it is largely the government financial institutions/ banks that the Rai’s of this world have duped, because of their incompetence, and not say an ICICI bank, proving the point once again. With the license-permit raaj more or less dismantled now in many of the sectors, the players are beginning to play the game according to the rules, and things are looking up. But, like I have stated earlier, in key infrastructure areas like public bus transport, power distribution, etc, unfortunately, it is either the Sharma's, or the equally bad KSRTC/ BMTC, BESCOM, etc that rule the roost.
As reputed as the IIT’s, IIM’s, Central schools, etc have been the numerous Christian Missionary schools and institutions like St John’s Medical College, CMC, Vellore, etc; the Manipal group of institutions; and lately, the NPS, DPS, etc. And, it was a product of the very first batch of the International Business School, in Hyderabad, promoted by a consortium of business houses, that got placed at the highest salary level compared to any other business school, including the IIM’s, last year.
For over 50 years since independence, the country’s Socialistic policies turned the entire population into babu’s, almost wiping out entrepreneurship altogether. If it still survived, it tells a lot about the tenacity of some of our business communities, like the Marwaris, the Parsis, the Punjabi’s, the Sindhi’s, the Konkana’s (Pais of Manipal), the Chettiars, the Mopla’s (of Malabar), to name just a few. They battled on despite the many obstacle placed before them by the government, quite often by crook than by hook, when it became a question of survival. Now, with liberalization, the latent energy is just exploding, and our enterprises are becoming world leaders in each and every field - of course, where liberalization has happened. Unfortunately, that has still to happen in the most vital areas of infrastructure.
If we are to provide the basic necessities to the millions of our under-privileged brethren, and thereafter, attempt to take on the world, it has to come through more and more entrepreneurship, and the government's role should be that of the facilitator and regulator (also to factor in the other two E's, referred to earlier), for which an essential requirement is that it pulls out of being a player also.
Regards, Muralidhar Rao
