On the consuming class and the destitutes

I make my way through the security and the large crowd gathered to watch a movie shooting. I pass by (now) familiar names-KFC, Taco Bell, Casio, Pizza Hut, Samsung, etc. I go to the box office and take out my Phone and check the booking number of the movie that I have booked online. I enter it into a touch enabled monitor. It throws out the ticket and I enter the  movie hall. There are a couple of foreigners sipping on Minute Maid. I look around and I see people busy on their Blackberries and Iphones.
 So I am at a multiplex in a mall situated in a very middle class locality in Bangalore. I am there to watch "The Descendants". The tickets are obscenely expensive. The minimum is Rs 260 and the maximum is Rs 350. The last row has these leather couches which turn into 180 degree recliners. All those recliners are taken. As the movie begins, I realise that the car Clooney drives, the phone he uses,etc are all available in India. And used by the so called "middle class".
So whats the point? The point is that the consuming middle class has increasingly become global. In 2005, Mckinsey had divided the Indian market into the "global indians" and the "aspiring class" and some more segments. In less than six years, my guess is that a large part the "aspiring class" is now part of the" global Indian" segment. This is co inciding with the recession in the developed countries.
 One part on why businesses are restless with  Indian policy makers is largely because of fewer opportunities available elsewhere in the globe. In an age when companies are filing for bankruptcy over a weekend, businesses are getting very impatient with Indian policymakers.

So while  the middle class educated Indians are enjoying the fruits of their labour, it is a disturbing trend about the" have nots". In developed countries, the have-nots have started believing that they will now become "have never". In India that pessimism is not there as yet. But it will only be a matter of time before the middle class will be accused of being parasitic.Of not having done enough to ensure that income disparity is reduced.

In that regard, opportunities for the less fortunate should be made available. In my own case, I have been extremely fortunate to have been given the opportunity and choice by a "welfare" state. The whole of my education was subsidised by the government. So it is surprising that many of us are for privatising large part of the education system. Perhaps we are more proud of IIPMs than IIMs!

We need to understand that most of us today who are working in top notch companies, having globe trotting careers are a product of a welfare state and maybe brought up by a generation of parents who believed education was the best investment! And that education was available to all who were willing to work hard.

While we can be extremely proud that most of us are living a life comparable to those of the developed world, we need to be on a constant vigil to avoid the mess that they find themselves in today!

The Govt. phobia at IIMs

The IIMs want the government out of their affairs. What this will do is that the IIMs will become no more than a placement agency for Indian and more so for foreign business houses.
The IIMs will be completely dependent on the industry for meeting expenditure. I am afraid this will lead to a real loss of "autonomy". There is a conspiracy theory ( conspiracy since I have only heard this from the alumni) about a B school in the eastern part of the country which give out favourable reviews of rehabilitation projects of mining companies only because a large part of revenue is derived from these companies which conduct MDPs for their executives in this B school.
The IIMs have to realise that they are a "management"institute and not a Business school. They also conduct research studies which are supposed to be unbiased and in line with the best interests of the society. This will be lost as they depend on large corporations for revenue generation.
When the government is extending a warm welcome to professionals from private sector (Nandan Nilekani of UIDAI, Arun Maira in the Planning Commission), why are the IIMs so keen on getting the government out of their affairs.
Also, the IIMs especially A, took on Murli Manohar Joshi when he decided to reduce fees. The same IIMs did not even complain when Arjun Singh autocratically and cunningly raised the quotas for OBCs. All of them increased their intake quietly.
There is a protest though against this vocal desire of getting "autonomy". Prof. TT Rammohan, a senior faculty member of IIMA has questioned the rationale of asking the government to leave the IIMs to run on their own.
I think it time the IIMs delve into some introspection and there would be no better guiding light than the vision of each IIM which would always look at IIMs as more than just producing managers for business houses.

The Vodafone Experience

Since I am on a "customer providing feedback" spree, let me recount my experience with Vodafone. Now, there have been several experiences but I will limit myself to the latest experience.
Vodafone, and I am sure this will be true of other operators also, does not care about pre-paid customers.The ARPU (Average Revenue Per User) in the prepaid category would not be more than 15% of that of the post paid category. I would hazard a guess that Vodafone is in fact making losses on the prepaid category. I arrive at this conclusion since it charges 50 paise for three minutes when you talk to a customer care executive. This is free for post paid customers. Also, 9 out of 10 times, a pre paid customer will never be able to connect to the customer care executive. When you press the number which, as the IVRS tells you, will connect to the customer care executive, you are merely sent back to the original menu!
Now, last week the operator did not activate my internet services. I was forced to call the customer service guys from my Dad's phone (which is a post paid connection) and tell them about the non-activation of the service. A week and several calls later, they were as clueless as I was. The standard answer I got was "It will start tonight". So I finally forced them to register a complaint and give me a docket number. Now, the executive will try his level best not to give you a docket number. Not by trying to resolve the issue but merely frustating you. The main weapon is keeping you on hold for more than half an hour.
After receiving the docket number, I shot off a mail to the nodal officer. Now the minute you write to the nodal officer, these guys suddenly start treating you like a valuable customer. A series of calls later, they fixed my problem and sent me a mail stating the same.
So, it is not necessary to believe that multi nationals are a cut above the rest when providing customer services. Imagine what would have happened if I did not have access to a post paid connection and I did not have the free time to pursue this issue with them.
A neo-classical economist would obviously tell me that I would rationally move onto another operator. And more so now, since switching costs are relatively low given the introduction of MNP (Mobile Number Portability). But, I will not as I believe that "the known devil is better than the unknown devil"

The SBI customer experience

Since I would be starting my career next month, I thought I might as well do some financial planning. The first step was to open a PPF (Public Provident Fund) account. One can open a PPF account at the Post Office (you can do it through an agent as well) and at an SBI Branch.
I decided to open one through the SBI since it provides the facility of electronic transfer through my savings bank account.
The branch below my building does not conduct this business and hence I had to go to a fairly distant SBI to open an account. This is my experience with the "Banker to every Indian"
There is one lady who is only responsible for the PPF business. She was very kind and helped me fill the form (not that it is a difficult one). I filled it up and gave it to her with proof of identity and proof of residence (Hail Weber's bureaucracy). Surprisingly, she cannot check the documents. For that one has to go to the "operations" manager. Now this guy goes through the documents at his own pace. In the meantime, he has all the officers coming to him for permissions regarding allowances for certain deviations. HE is the BOSS. He also finds time to call up customers and ask them if they have indeed sent some person (a domestic help) with a cheque. He checks my documents and then logs on to my SB account. Surprisingly, he doesnt find my signature in their records! He asks me whether I had faced cases of cheques being dishonoured. I say a yes only to find him asking me the reason given by my Branch. A bit shocked, I said that the reason given was "signature does not match with original". The fact was that they had never scanned my signature. For the past two years, they have dishonoured three of four high value cheques. I decided to go to my branch once this PPF business was over.
After verifying my documents, he tells me to go back to the lady and fill up a pay in slip. I do the needful and before I could submit the documents to the lady for opening up the account, I find that she has gone for lunch. After half an hour, I go to her and she opens up an account. I thought that was it. But she tells me to go back to the operations manager and take an account number. I go back to the manager and he tells me to come back next week as the branch manager is not there!! I protest and he asks me to give a cheque ( I had intended to give cash)! I give him the cheque and he tells me to come back next week. Resigned to my fate, I give back the documents to the lady and ask her whether the PPF account would be automatically linked to my online profile. She answers in the negative and points to another person in the bank. Tired of documention, I tell her I will do that next week and head back to my SB account branch to resolve the signature issue.
At my branch, the operations manager checks my account, and with an indifference attitude, tells me to fill one more form. I enquire as to whether my PPF account cheque would bounce and he answers in the affirmative. A bit angry, I tell him to hasten the process of getting my signature on their records.
Today, I downloaded the Bank Code of Conduct and was planning to write a complaint. While the document was downloading, I logged into my SBI account and I see that a PPF account has been opened. They have transferred the amount to the account (so the cheque did not bounce) and the PPF account has been linked to my account.
Do these guys at the branch do this purposefully so that I can be delighted later and probably sign off a blog post, not as an irate customer but as a delighted one? I dont know!!

Playing with semantics

In the highly popular book '1984', citizens of Oceania speak a language called "Newspeak". The book is about dystopia and the language was devised to meet the idealogical needs of Ingsoc, or English Socialism. The purpose of this language was to prevent free thought.Radical?

Not really because we see it happening around us today. In his book 'The economics of Innocent Fraud' noted economist and diplomat J.K.Galbriath points out in the chapter 'Renaming the system' how we have supplanted words to make certain systems more palatable to the general public. The most startling example is of course the substitution of the word "capitalism" by the word "Free Market". The word "free" is so positive that anyone will tend to believe that it is the best economic system in place and that any role of the state is undesirable and harmful.

As I think on similar lines, I see that the word "economic growth" is now used sparingly and is replaced "inclusive growth". Similarly, the word microfinance is hardly used. Financial inclusion is the buzz word among bankers and policy makers.

All in all, George Orwell was indeed someone who had good predicting ability!

How fast food chains enhance decision making ability

In emerging economies, fast food chains like Mcdonalds, Dominos Pizza,et al have come under attack for destroying local food habits and americanisation of culture. In fact, there is a slow food movement against the fast food onslaught which has been started in Europe. Of course in India, all these chains had to adapt their menus to meet the Indian taste bud requirements.
Even though they have a limited menu, the choices they give in terms of product bundling (Ever faced with the "Sir, would you like a soft drink?" and you answer yes and then he asks you for the brand,the size(small, medium ,large) and then he does the same for your fries, sauces , etc?) is enormous.
In fact, this seemingly endless choice even made the great Prof. Yunus fear American restaurants when he was a Fulbright Scholar. He says in his book 'Banker to the Poor'(pp43) on how he was given so many choices when he had ordered for eggs at a restaurant.
The most funny rant of such endless choice comes from the movie "You got Mail" starring Meg Ryan and Tom Hanks. Joe Fox played by Tom Hanks has this take on Starbucks in the movie

The whole purpose of places like Starbucks is for people with no decision-making ability whatsoever to make six decisions just to buy one cup of coffee. Short, tall, light, dark, caf, decaf, low-fat, non-fat, etc. So people who don't know what the hell they're doing or who on earth they are can, for only $2.95, get not just a cup of coffee but an absolutely defining sense of self: Tall. Decaf. Cappuccino.

(Disclaimer: The post is on a lighter vein. Except watching "Food Inc" and newspaper articles which cover such protests I really am not well informed on such protests.)