:: INDUSTRIAL ECONOMIST ::

Editnotes:

CII meet focuses on regional cooperation

In contrast to the fanfare and interest attached to the earlier annual partnership summits of CII, it was a relatively tame affair this time. I remember such summits extended to 4 - 5 days presenting presidents and prime ministers from the east and the west, management gurus like C K Prahlad and top business leaders. This year it was reduced to a day and a half. Sadly, even the prime minister of Malaysia, the partner country which brought a 50 strong delegation, could not be present due to the unfortunate demise of the king of the state Johor and had to leave the previous night.

Of course Chennai was chosen at a short notice. The original venue was Hyderabad which had the reputation for holding summits in a row for four years under Chandra Babu Naidu. The Telangana agitation that has affected normal life in Hyderabad was the cause.

CII president Venu Srinivasan and the dynamic Minister of Commerce and Industry Anand Sharma, president of the Summit, quickly shifted the summit to Chennai. Quite expectedly Sharma focused on bilateral cooperation among neighbouring countries: the large presence of delegations from Asia and Africa supported this with enthusiasm. With the economic melt down of 2008 and 2009 affecting the developed countries more and with countries in Asia, notably China and India and those in the Southeast faring well, there is interest in greater cooperation among the developing countries. Sharma referred to the free trade agreement signed by India with ASEAN in September; already the country has such agreements with Thailand and Singapore.

Deputy Chief Minister M K Stalin presented the attractions of Tamil Nadu as an investment destination. President of Maldives, Mohamed Nasheed, made an evocative speech on the market orientation of his country and invited Indian entrepreneurs to invest in his country. Malaysian minister for international trade and industry, Mustapa bin Mohamed, who read his prime minister's address, pointed to the inevitability of global economic integration and suggested taking care of the disadvantaged.

The Summit discussed the imperatives of economic integration in a globalised world, from regional integration to global partnerships, strengthening the global market place, ensuring capital flows and partnerships for product development.

Malaysia with which trade and investments in and from India are growing at a handsome pace, extensively participated in the exhibition, displaying its strengths in several sectors including tourism and infrastructure.

Consumer is still not king

India switched to market orientation in 1991. Today for every consumer product there is a multitude of brands and there is intense competition. There is constant and continuous effort at marketing products through special sales and promotion campaigns. Attractive price discounts are offered.

Sadly old habits die hard. Marketing efforts still stop with selling the product. Despite warranties, there is a tendency to deny warranty claims. After-sale service continues to be extremely poor. The hapless consumer continues to be a victim. Consumer courts, set up with lot of expectations, are not quite effective: cases are piling up, the processes long-drawn and in several states these courts do not have enough judges to hear and dispose of cases quickly. The result: unscrupulous manufactures get away with shoddy deals.

I cite an instance: a senior citizen living alone exchanged her old gas stove for what was marketed as a sophisticated product by Glen Appliances Pvt Ltd. The persuasive staff of Vivek & Co shoved an expensive gas stove with glass top for Rs. 6665. An exchange value of Rs. 1000 was given for the old stove.

In just seven weeks the glass top burst. Luckily there was no physical hurt. Then began the ordeal for the consumer. Vivek & Co disclaimed any responsibility and advised her to take up the matter with Glen. The manager of Glen, in familier fashion, tried to put the blame on the consumer. After three days of several phone calls reluctantly he sent a representative from the distributor, Chakra. The latter again put the blame on the consumer of spilling water. A gas stove used in the kitchen, of course, will have water spilling over. The consumer obviously is not an expert on cooking things dry all the time. Cooking rice, vegetables, boiling milk or preparing the south Indian rasam or sambar all involve water. It passes one’s comprehension how one can help avoiding water in Indian cooking. The mechanic then bargained for supplying a fresh one at an additional cost of Rs. 2800.

For five days, the consumer, a lone senior citizen and a cancer patient, without a gas stove struggled to manage cooking with an electric cooker. With a lot of efforts the comapny provided another stove priced only Rs 4990. No explanation for the short-charge of Rs. 1675.

I contrast this with the consumer paradise of US. There one can return any product within a year with its original packing and get a free replacement or full money back with no insinuation on the carelessness of the consumer.

The Indian practice is a continuation of the licence-permit-quota regime when production capacities were limited by the government to a few manufacturers. It was a seller’s market with long wait for most products. The buyer had to consider himself/herself lucky to get the product! Why this has not changed when there is a plethora of brands, Indian and imported, and there is such frenetic competition?

When the gazelle was stationery...

I cite my experience of buying a new car when car production was restricted to three Indian manufacturers. It was June 1978. I met the chief executive of Standard Motors in Chennai and expressed my interest to buy a Gazel car. Initially he declined with the reason that there was no immediate plan for production. A couple of days later he telephoned and offered to supply one with a few conditions: one, the full on-the-road price to be paid in advance; two, there has to be a booking of a minimum of 20 cars and three, delivery will be in early September. I persuaded one of my friends, a senior executive working for SPIC, also to buy a Gazel. Both of us deposited the full value.

Come September. There was no sign of delivery. The company tried to wriggle out mumbling that there was no firm commitment. I took up the matter with the Department of Heavy Industry. The kindly Secretary directed the company to honour its commitment. Hurriedly the company procured components (including pistons and bearings) from the market and paint from a dealer in T.Nagar and delivered the car in a couple of weeks.

Consumers of that era would only be too familiar with the endless visits to the dealer’s service station for the rectification of some manufacturing defect or other. The same experience extended to a range of other consumer products like radios or refrigerators manufactured by multinationals.

Until 1976 when the then minister of Industry and Consumer Affairs, T A Pai got the Packaged Commodities Regulation Bill passed, information labeling, providing basic information on a product and its maximum retail price was not in vogue. There was of course resistance in enacting this bill; Emergency was the saviour!

Sadly, consumer rights are not yet fully understood and exercised even today. Like the robber barons of yore, manufacturers continue to ride roughshod over consumer interests.

Lawyers should respect law

There are consumer courts. There is also the mechanism to offer free legal aid for poor litigants. But the judicial machinery is in serious disrepair. Cases pile up and the legal fraternity has lost its old sense of integrity and fair-mindedness. Intense politicisation and vast disparities in income levels seem to have demoralised the profession. Ethical values are thus lost.

Look at the paralysis suffered by the hapless litigants at the Madras High Court. The frequent attempts at disrupting court proceedings by resort to strikes by lawyers culminated in a violent confrontation between the lawyers and the police on 19 February 2009. For a few weeks following lawyers continued with their agitation. In the first quarter of 2009, Courts functioned hardly for a handful of days. When nearly after 11 months, a detailed CBI enquiry found fault with both the lawyers and the police and filed cases against those indulged in arson and violence, lawyers again protested through boycott of courts.

The respect for rule of law must emanate from literate sections of society, from those well-versed with law. Lawyers can present their case strongly before the courts and learn to abide by court rulings. When independent enquiries by the Justice Srikrishna Commission and the CBI point to sections of lawyers indulging in arson and violence, the body of lawyers should consider the issue dispassionately and strive to render justice for the crimes perpetrated.

They should also join hands with the administration to restore the prestige and reputation of an honourable institution known for its efficiency and fair play. They should work towards clearing the humungous backlog of cases and assure the litigants quick dispensation of justice. This alone can restore faith in the entire judicial system suffering delays and disruptions.

S Viswanathan

Website design: mayuri multimedia