SPEAKING
ALOUD
[ Arun Maira, Harivansh , Shankar Venkateswaran, Riaz Quadir, Harmala Gupta, Kabir Mustafi. ]
In the March issue of Civil
Society we reported the findings
of an opinion poll conducted by
GFK Mode on perceptions
about social sector
organisations. The government
and judiciary were also rated.
Here we print a collection of
viewson the poll’s findings.
Over to Arun Maira
ARUN MAIRA
MIDDLE class citizens in Indian metros were the first beneficiaries of India’s
economic reforms. Competition amongst foreign and Indian companies,
almost all in the private sector, vying for these customers have given them
much more choice than they had before – of cars, home appliances, telephone
services, media, clothes, and food. They appreciate these benefits and do not
want any slow down of economic reforms. However two recent surveys of this
poster-child constituency of Indian economic reforms reveal its feelings about
which Indian institutions it trusts with reforms.
India is a democracy with freedom of association and freedom of speech, and
NGOs are proliferating side-by-side with the proliferation of consumer goodies as
the economy opens up. Civil Society commissioned a survey by the opinion poll agency GFK Mode of
middle class Indians in metros. The survey sought to understand what citizens felt about the value
NGOs added to India’s society. An overwhelming 90 per cent said NGOs were necessary in society. Why?
To protect the interests of the people. In fact, they said that NGOs were more effective than the government
and even the judiciary in addressing citizens’ concerns about fairness and equity. However,
they had two concerns about the performance of NGOs. First, NGOs often have biases and personal
interests in the causes they take up. Secondly, while NGOs are good at raising issues, they are generally
not very effective in finding solutions.
The other survey, commissioned by TV18 and conducted by the market research firm Synovate, found
that while middle class citizens in the metros were pleased with the first world consumer products they
could now buy, they felt that India remained a third world country because of the poor quality of public
services – power, water, sanitation, public transport, healthcare, education, etc. Eighty-eight per cent
of those surveyed wanted more reforms but surprisingly, when asked whether the private sector, which
had demonstrated its efficiency in many areas, should run these public services, as many as 73 per cent
said, No! They said these services should be left in the domain of government.
The private sector may be more focused on customer satisfaction and more efficient than the public
sector. But it is not oriented to resolve issues of equity. If it cannot find solutions to provide services at
costs that some people can afford to pay, it can simply ignore these segments of customers. Indeed this
is considered good business management. This may be acceptable in the automobile or even the mobile
phone businesses where poorpeople can carry on life without such products and services. But what
about water, sanitation, healthcare, education, etc. to which all human beings must have access at prices
they can afford? If the private sector cannot charge the price it needs to for these ‘public services’ and
therefore will not serve poorer people, government must provide the services even if it does it inefficiently.
And NGOs should step in to take up citizens’ concerns of inequity with both the private sector
and government. While governments and corporations may resent the noise NGOs make, citizens say
NGOs are necessary to create a just society.
The implication of what people are saying in these surveys is that privatisation and more FDI cannot
be the only measures of the success of reforms. Many areas that affect people’s lives must be improved
and privatisation and FDI may not be the solutions. Even in the most liberal, market-based economies,
such as the USA, the efficacy of the private sector in providing services like health and education is questioned.
Indeed, the costs of healthcare in the USA, which has the most privatised health care sector in
the Western world, are much higher than elsewhere. Also, the poor have much less access to healthcare
in the USA than in European countries where their governments are responsible for healthcare services.
The issue is not whether to privatise or not, but how to improve the lives of people. This debate raises
important questions about the scope and purpose of reforms and the roles of various institutions in
Indian society – business corporations, governments, and NGOs.
INSTITUTIONAL REFORMS : WhatIndia wants is faster growth but also more inclusive growth – 11 per
cent even, but only if it can be attained with more equity. Perhaps there is no model for this. After all
India is an unusual country. Therefore India will have to develop appropriate processes and the unique
institutions required for inclusive and, at the same time faster growth. Institutions and processes make change happen in societies, explains Nobel Prize winning economist Douglass
C. North in ‘Understanding the Process of Economic Change’. With the role of
the private sector ascendant, the role ofgovernments receding, and NGOs
mushrooming in democratic societies all over the world, including India, there
is a jockeying for power and space between these institutions.
The pulls and
tugs between these three actors within democratic societies can slow down the
process of change and ‘reform’ that businesses desire. However, as North
points out, the institutions themselves must also be reformed for the process
of economic change to be effective (and this includes the private sector too).
Perhaps the answer is not an either-or one – to privatise or not. Partnerships
are required to bring together the strengths of these institutions to serve society
more effectively. The private sector can bring its ability to manage economic
resources efficiently and NGOs their passion for the rights of the underserved.
In the Civil Society-GFK Mode survey, 75 per cent of the respondents
said that NGOs and the private sector must talk to each other and work together
in the wider interests of society.
However, it is not easy for them to work with each other. There are deep seated
biases on both sides. For example, a laudable initiative between some private
sector companies, NGOs, and a state government in India to reduce the
persistently high levels of child malnutrition in that state ran into many mental
road-blocks. Though less than 25 per cent of Indians are classified as being
below the poverty line, child malnutrition in India runs as high as 47 per cent,
which is even higher than many sub-Saharan countries which have much lower
GDP per capita than India. Therefore the solution to child malnutrition is not
just poverty reduction – India’s problem is more systemic. The knowledge and
resources of several institutions must be combined to even understand the
roots of this problem, let alone implement solutions.
Therefore a consortium
was formed towards this worthy goal.
Unfortunately even after the representatives of various organisations had
worked together for some months, their suspicions of each other’s motives surfaced.
The NGOs felt that the private sector was in it to make some money from
new products and services that may be developed by the initiative. But why
not, asked the private sector, so long as the people’s needs are being met and
child malnutrition is being reduced through innovations? Why the taboo
against creating economic surpluses that can be reinvested – which is another
way to describe ‘profit’ – they asked? To these private sector executives, the
NGOs were displaying their impractical, ideological biases, and they wondered
how they could work together!
The ways in which institutions interact, the quality of dialogue amongst
them, and their ability to arrive at consensus quickly is an ‘institutional’ ability
of great value to societies. Perhaps India needs this institutional ability much
more than any other country in the world today. India is much larger and more
diverse than most. And its development agenda is more complex than the economic
management agendas of the more developed economies, and also more
complex than developing countries like China that can side-step discordant,
democratic debates. We must apply ourselves to develop the best ‘technology’
and capability for dialogue within our society to achieve our goal of more rapid
and more inclusive growth.
(Arun Maira is chairman of the Boston Consulting Group in India
