...Lekin aap to santusht hain!

I was once watching a children's quiz on a regional channel. The participants were all in their early teens or younger, and one of the rounds involved asking the children the spelling of some common word. Up came an eager-looking kid who gave the spellings of words such as “excellent” excellently, though he did stumble at words like “hazardous”. Finally he was asked the spelling of the word “vacuum”. He seemed to be confused, but ended up answering “vacyum”. The correct answer, as the quiz master and the on-screen display said, was “vaccum”.

That reminded me of a quiz I had participated in many years ago. It was held on the eve of independence day, and students from 5^th to 10^th class were all participating. At the end there was a tie between our team and another, and the tie-breaker was the question: who was the iron man of India. We hit the buzzer and answered confidently, “Sardar Vallabhbhai Patel”, only to be told it was Lokmanya Tilak. All participants from the 5^th to the 10^th claimed it was Patel, but the quiz master (mistress?) batted for Tilak.

Of course, what had happened was that the quiz master had probably selected the questions from one of the handy quiz books and had by mistake, perhaps copied question 141 and answer 142. Or maybe the quiz book itself was wrong; because certainly every single book of history says it was Patel, not Tilak. And anyone familar with school textbook history would know why.

Now look at it in a bigger context – people conducting a spelling competition where the organizers don't know spellings themselves and their knowledge of Patel is weaker than those they are testing. “Vacuum” is an easy word to spell wrong, but if the organizers had just typed the word into MS Word, they would have seen a red underline below it. That was the bare minimum that was required to ensure quality for the quiz. The other quiz organizer could have referred to any history textbook before asking questions, but she didn't. And when all students from 5^th to 10^th class were saying unanimously that it was Patel, perhaps a fact check was in order. But that never happened. It was as though the allegation of inaccuracy did not even merit a verification! It sounds funny, a kind of “life is unfair” moment, and that's perfectly acceptable.

What is not acceptable though, is the total negligence of quality. A quiz that tests others should be first and foremost, impeccable in its own general knowledge and diction. But these quizzes weren't, and this disregard for quality isn't confined to quizzes. It is part of almost every dealing we've had in our lives.

Service for any internet provider is an example. In my own dealings with three prominent companies, I've seen that none of them have the slightest idea of the technicalities involved. Running my system on Linux, I was facing some problems which I tried to resolve with one of them. As it turned out, the tech support guys said they had no idea about Linux. Well, the moment a networking guy tells you he doesn't know Linux or Unix, you can be sure he's a fake. Networking is taught on these operating systems, yet people running an internet service have no idea about it. But as I later found out, I had been expecting too much from the company, because as it turned out, the customer service of the same company had no idea how their own company billed its customers – the very customers they were supposed to be servicing!

Be honest: when was the last time any Indian company floored you, as a customer, with its sheer service quality? Look all around you, from your internet to your cable TV provider, your telephone service to your passport agent, anywhere. When was the last time you could book a ticket online without a glitch? When was the last time you faced a technical problem that was solved in one call?

Is it because we Indians can't provide good service? No, that is simply not true. Good service is the reason why companies like Dell and HP and McAfee put their call centers in India. It is documented for many companies that technical and customer service available in Indian call centers is better qualitatively than support provided in China or Philippines or sometimes even the home country of the company itself! My own friends in some international call centers told me that if they were as clueless as the customer care in Indian companies, they would be fired from their jobs.

Then why are we unable to provide the same world-class service to our own people? In fact, why is world-class different from the class offered to fellow Indians?

The free market should have solved this problem. The amount of choices we have today is drastically greater than the choices we had even 5 years ago. This should have meant, in theory, that market forces would have favored those companies that provided good service. But theory hasn't worked.

There was a recent ad by Shahrukh Khan which I think has the answer. Khan talks about how cable operators provide grainy coverage, fewer channels and paltry service, and he taunts the viewer sardonically, “... lekin aap to, santusht hain,” (but you guys are still satisfied). In other words, we are easily satisfied with even the poorest service that we get. We don't produce quality for our own countrymen because our own countrymen never demand it. We are, as Khan puts it so brilliantly, “santusht” with poor quality.

Which is why we have ATMs that don't work for a whole month in a city like Bangalore. We have customer support who don't know when, how and where a bill payment must be made. We have cable operators who put their phone off the hook because they say too many people complain about their services. And we have quiz masters not knowing who the iron man of India is or what the spelling of vacuum is.

The same ad also suggests a solution: “please, please and please, don't be santusht! Thoda aur wish karo.” Don't be satisfied with poor service. Don't be satisfied with people who don't know what they are doing. Wish for more and ask for more. Demand excellence.

There is a story about a shoemaker who provided the whole town with shoes. But the shoemaker himself, and his family, walked barefoot because he was never able to make shoes for any of them, because they never asked him to make shoes for them. So the question is, do you want to be that shoemaker's family?

Whats wrong with the loan waiver

The biggest news about the budget has been the Rs 60000 crores loan waiver. It's a brave move, we are told. The government, of course, would like us to believe that it is a silver bullet that will solve the problem of farmer suicides. But will it?

I'm no economist. But based on what I've been reading for the last few days, there are some things that I have tried to get a grip of on the subject. Now I'm not much concerned by the ideological argument that government should not interfere or that loan waivers encourage financial irresponsibility. If people are driven to commit suicide, I think we can forgo those considerations if it that will stop them from doing so. Besides, such freebies are given quite often to corporates in the form of SEZs, tax reliefs and the like. So the ideological opposition is moot. What I'm concerned with, is whether this waiver will actually serve its purpose.

To begin with, the loan waiver is only for those farmers who have 2 hectares. Those who have more have the option of having 25% of the loan waived if they pay the remaining 75%. That's where the trouble begins. Not all crops are the same. They don't have the same requirements of soil nutrients, land size etc. Nor do they have the same price. Some require more land, some less. For example, in Vidarbha, has been one of the most infamous for farmer suicides, average land holding is 3.5Ha.

But the waiver takes none of this into account and seems to assume that 2Ha of cotton is equal to 2Ha of sugarcane is equal to 2Ha of apples.. As P Sainath further explains in this article, even the timing is going to hit the farmers:

The cut-off date of March 31, 2007 works against even the small group of Vidarbha farmers who do benefit. Loans in the cotton regions are taken between April and June. In the cane growing regions, they are taken between January and March. This means the Vidarbha farmer has one less year of loans waived than the others.

Besides, there are a number of farmers all across India who are below the 2Ha limit, but not facing a crisis, such as in Kerala, as the article also points out. These people will also benefit from this waiver. Some of you may wonder why this is a problem. It is because, as Mohammad Yunus (Grameen Bank founder, micro-credit pioneer and Nobel Peace Price laureate) suggests, mixing the needy with not-so-needy within a programme leads to the not-so-needy driving the needy out of the benefits of the deal. In other words, the not-so-needy tend to dominate the benefits.

What's worse is the fact that loans from private moneylenders are not covered in this waiver. Why is this a bad thing? Because over three-fourths of people in MH alone are under loans from private moneylenders, as this report prepared by the Tata Institute of Social Sciences and tabled before the MH High Court, says.

The farmers took their first loan from banks (banks gave loan only once, with a further loan possible only after repayment of the outstanding loan). The later loans were from private parties to repay the bank loan (default of which would result in attachment of the land or mortgaged house). Even for those with an ability to get loan from the formal sector, access to informal sector loans was indispensable. Thus, over 75% of the farmers had loan commitments to non- formal sources.

And now comes probably the most dangerous aspect of the whole issue. On one hand we have a loan waiver that does not target the most important source of loans ie private loans, and on the other, we have the startling news that one rural commercial bank has been closed every day for the last 15 years.

The Reserve Bank of India’s Handbook of Statistics on the Indian Economy (2006-07) shows there were 30,639 rural branches of SCBs in 2007. That is, 4,750 less than the number in 1993. In other words, an average of 26 bank branches shut down each month, or one every working day.

However, branches in metros shot up from 5,753 to 11,826 in the same period. In other urban centres, the number climbed from 8,562 to 12,792 in this period, while also going up in semi-urban locations from 11,356 to 16,214.

And the rate, as that article further explains, was the highest in 2006, which was after the TISS report I mentioned earlier.

So putting these pieces together, we see that, rural commercial banks (whose loans are covered) have been closing down at an alarming rate while private moneylenders have been entering to fill their space, thereby worsening matters. This does not betray the intentions of a government serious about solving the problem of farmer suicides.

In short, the loan waiver suffers from a problem of targeting: its audience has not been targeted and nor has its timing.

Some people claim that, bad as it may be, it still is better than nothing. That is missing the point since, after all, the argument is not that nothing would be better. The point is that this loan waiver is not the best usage of the money the government has on its hands.

Farmer suicides is a complex crisis arising out of many factors. A research on these factors, and identifying which factors are most dominant in which areas would have yielded a policy which addressed specifically those points of concern. A loan waiver with terms tailored to meet the differing requirements, or maybe different smaller loan waivers, one for each concern area, would have proved a more effective use of taxpayer money.

The solution being offered by this blanket loan waiver is akin to a doctor who blindly gives Crocin to any and every patient who comes to him, ignoring the fact that the patient may actually in need of a tetanus injection or an antibiotic, or may even be having a fracture, all cases in which Crocin is hardly of any use.

In dealing with any complex problem, identification of its causes is the key and addressing those causes is how one proceeds. That is the practice used in engineering; it is the same practice that is lacking in this loan waiver.

As I said, I'm no economist. But as an engineer, as a citizen and a taxpayer, I refuse to believe that the best economists and researchers cannot come up with a solution that addresses the specifics of the factors causing suicides and utilizes public money in a more effective way. One size does not fit all