Friday, August 28, 2009

Thank God for BSNL !!!!

India started economic reforms in the 90's and since then the economy has consistently clocked growth rate of over 6%. The clamour for dis-investing the PSUs is increasing and disinvestment itself is considered a panacea for all economic problems faced by India. Till sometime back even I considered private ownership to be the one and only solution; it increases efficiency and accountability and is beneficial for the stakeholders. A small incident made is rethink my take on the subject.

Last year I shifted to Kathriguppe, Bangalore - a relatively developed area ( It has Pizza hut, Dominos and Pizza Corner all within a radius of 100m! ). I contacted Airtel to get a broadband internet connection. The executive from Airtel arrived at my house within 24 hours of my call, installed the phone and modem and in less than half an hour I was ready to interact with the world! I couldn't help but admire the blue-turbaned Prime Minister of India, Dr. Manmohan Singh - the architect of India's economic reforms. I could picture him smiling smugly at his achievement.

Recently I shifted to another area called C.T.Bed - around 2 km from Kathriguppe, and as usual the first thing I did was to call the Airtel executive for the broadband connection ( Air, Food and Internet are the three most important things in my life nowadays - and not necessarily in that order!). The airtel executive took my address and promised to come the next day to set up the connection. To my disappointment he did not turn up. I waited for another two days before calling him. He politely told me that he could not give the internet connection as there was "no connectivity" in my area. Wary of sounding stupid, I did not ask him the meaning of "no connectivity" even though I had no idea what he meant. On inquiring with few people I found that "no connectivity" is not really a telecom jargon and colloquially it just means that it doesn't make any "business sense" for Airtel to invest here. There are not enough people in the area with airtel connection and in near future the number is not expected to grow rapidly. Unsurprisingly, the only company providing the connection there was BSNL. I applied for the BSNL connection and bang after 25 days, I got it!

The process may be slow in a public enterprise - as in my case, 25 times slower - but at least it reaches a wider population. SBI branches are ubiquitous across the country, where as you will find private banks like ICICI and HDFC heavily located in big cities with limited or no presence in smaller towns. The raison d'etre's of private companies is to make profit - by all legal means (and sometimes even by illegal means).

Before you conclude that I have graduated from Prakash Karat school of economics, let me tell you that I am not against private ownership or disinvestment.But before privatization, the government should ensure that all regions have an equal chance of benefiting from it. The government should lay the groundwork ( in some cases literally!) before giving the reins to the private companies. It should build the necessary infrastructure to encourage private investments. Only then India will be able to utilize the full potential of disinvestment. Otherwise, a part of India would be the new Singapore, but to get there you have to cross miles of Sahara desert.