Sucheta Dalal :From privatisation to regulation
Sucheta Dalal

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From privatisation to regulation  

Feb 23, 2004

From privatisation to regulation

By Sucheta Dalal

For decades, we have wanted the government to stop baking bread, running hotels, operating airlines, offering phone services, providing insurance or running any business that requires high standards of customer service. Also, we wanted government to stop being both, a service provider and a regulator, or a player and a referee. And in the last five years, the government is actually making a serious attempt to get out of several businesses through its privatisation programme. It has also set up several independent regulators to ensure a fair competition between service providers and to deal with the impact of changing technology on the way businesses are run.

Privatisation and competition alone have led to big improvements in service quality in many areas. Unfortunately, the regulatory systems seem to operate on the belief that competition alone is enough to protect consumer interests. Take for instance the Telecom Regulatory Authority of India (TRAI). It follows the open house route to policy making, but does not entertain the mounting number of individual complaints. However, it is now planning to set up a telecom ombudsman to interface with customers. Meanwhile, subscribers across the spectrum of telephone services continue to report a variety of complaints.

Take for instance the massive billing problems of Reliance Infocom. While the company has indeed improved its services after initial problems, some non-subscribers such as V. Dhananjay Pole of Hyderabad are faced with the bizarre experience of being billed when they haven’t even subscribed for a Reliance phone. This surpasses even the idiocy of the era when we were at the mercy of government companies.

Arun Saxena, president of the International Consumer Rights Protection Council (ICRPC), forwarded Pole’s complaint to the company. Other civic activists point out that the problem is not restricted to Reliance. Kisan Mehta of the Save Bombay Committee points to several problems with the Tata Indicom service. Almost all mobile companies are extremely difficult to reach through their helplines, tardy in their billing and seldom respond to complaints or queries sent to their email addresses. None of them allow access to senior executives if a consumer wants to take an unresolved complaint to a higher level.

The same goes for Cable TV services. The TRAI only handles disputes between service providers, while harassed subscribers have the option of either going to a civil court or to the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). Pestilent telemarketing by hotels, banks and finance companies is a nasty side effect of competition and privatisation and almost uniformly detested by their victims.

Calls to mobile phones are the most annoying form of telemarketing because they are not only a brazen invasion of privacy but often make the victim pay long distance charges. Some of our leading banks and finance companies have no qualms about letting telemarketers harass their customers. My experience with a leading Indian bank and a foreign bank reveals that you cannot get off the list until you make multiple complaints to the top management of these institutions. I also learnt that most mobile phone companies are indeed protective of their subscribers and do not part with telephone lists, so most call centres create lists by dialling random numbers and hoping to strike lucky. The problem is that they simply refuse to strike out numbers even when the person emphatically asks them never to call.

The solution is obvious: Introducing a ‘do-not-call-registry’ and making the invasion of consumer privacy punishable with a hefty fine. Even the US has experimented with such a registry only recently and less than a week ago a federal appeals court has upheld the government’s right to help people block unwanted telemarketing calls. In India, filing a complaint against companies, which harass consumers through telemarketing, would again require a long battle with a consumer court. The alternative would be consumer action in the form of circulating the names of such companies on Internet groups and encouraging the boycott the products of companies that invade our privacy.

The latest example of how the air travellers’ romance with private airlines received a severe jolt last week with the twin weddings at the Sahara parivar. As the only group without any profit pressure mounted the most surreal orgy of ostentation, its airline schedule was sent on a spin and paying passengers spent hours cooling their heels at airports around the country.

Anywhere else in the developed world, such deliberate delays and diversions would have been immediately compensated if the airline hoped to retain consumer loyalty and avoid expensive litigation. In India, angry passengers can fight it out at consumer courts, but with little prospect of being able to collect any proof that delays were caused due to the wedding festivities of ‘Managing Worker’ Subroto Roy’s sons.

Fortunately, every once in a while a dogged consumer does file a case in a consumer court, persevere with his demands (sometimes with the help of a consumer group), until s/he gets redressal. But at the end of a long battle, often lasting a couple of years and then going into appeal, all that the complainant gets is a refund with interest. Indian courts have invariably refused to reward consumers for their efforts. Even when they award a portion of the complainants’ costs, it is almost like a special favour. And that remains the biggest roadblock to the growth of a powerful consumer movement in India.

Civil courts are crowded and consumer courts are slowed down by inadequate infrastructure and often a poor understanding of consumer issues. The solution lies in expanding the role of independent regulators and asking them to create grievance redressal courts or ombudsmen to hear consumer complaints and grant swift justice. But unless the judicial system makes it much too expensive for companies to ignore their customers, the benefits of privatisation will invariably taper off within a couple years after any sector is opened up to competition.

-- Sucheta Dalal