The Hindu Business Line : Speedy service, not sympathy

Our economic reforms have received widespread attention and much self-congratulation within the country, and even a little clapping of hands outside, but the benefits of new prosperity are slow in trickling down to those most in need, observes Chandan Sinha in Public Sector Reforms in India ( www.sagepublications.com).

“Despite the hoopla of an information-technology-led booming economy and the hyperbole surrounding India’s almost-achieved status of an economic ‘superpower’,” it is the urban middle class and the rural elite who predominantly enjoy the fruits of development, not the poor in villages, he notes, looking at field realities from the perspective of the district officer.

You can perhaps count among the trickles the ICT (information and communication technology) initiatives in the public sphere. Such as, e-governance, which, “at the cutting edge, revolves around the computerisation of treasury, civil supplies, motor vehicles, land records and land registration. These are some of the key areas in which the citizen customer’s interface with government service delivery agencies takes place on a routine basis at the district level.”

Examples of ICT for public services that Sinha cites are projects such as Bhoomi, Gyandoot, and Lokvani. The Bhoomi project of Karnataka, designed by NIC (National Informatics Centre, Bangalore), has computerised ‘all 20 million land records of 6.7 million land-owners in 176 taluks’ of the State, as www.revdept-01.kar.nic.in informs. “The manual land records in operationalised taluks have been declared illegal. All the mutations to the land records database are done on the computer itself so as to ensure that data on computer remain current with time.”

Gyandoot, an intranet in the Dhar district of Madhya Pradesh, connects rural cyber cafes catering to the everyday needs of the masses, states http://gyandoot.nic.in. ‘What’s on offer’, according to the site, is a host of services including: certificates of income and domicile (mool niwasi), landholder’s passbook of land rights and loans (bhoo adhikar evam rin pustika), rural Hindi e-mail, public grievance redressal (shikayat nivaran), forms of various Government schemes, ‘below poverty line’ family list, employment news, rural matrimonial (vivah sambandh), rural market (gaon ka bazaar), rural newspaper (gram samachar), and commodity/ mandi marketing information system. “Dhar handles close to Rs 4 billion worth of agriculture commodities, principally soya, cotton and wheat.”

Citizens prefer speedy service to sympathy, says the author. “Idealism, after all, is best expressed in action, not words. Therefore, a fundamental need is to recast state action in terms of products and services and its ‘beneficiaries’ as citizen customers, and to reorient individuals in the government machinery to perceive themselves as professional service providers.”

An area where our IT industry can possibly chip in a little and make a big difference.

Tax sops and FDI

Three sectors that stand out in services are communications, insurance, and IT (information technology), finds OECD Economic Surveys: India 2007 ( www.academicfoundation.com). “Telecommunications saw the transformation of the historic state monopoly operator into a corporation and the introduction of private competitors (notably for wireless telephony); insurance saw the end of the domination of the state-owned companies with the opening of the sector and the creation of a new regulator.” And IT reaped the benefits of ‘an improved business environment in the special zones’, in the form of better infrastructure and tax sops.

In contrast, sectors that remained dominated by state-owned companies performed well below average, states the report from the Organisation for Economic Co-operation and Development (OECD).

A significant performer has been ITES (the IT enabled services). “This sector started poorly in India with the exit of multinational firms and the creation of a government monopoly to manufacture and service computers in the 1970s. This move did, however, provide the initial market for two of what are now the largest ITES companies,” the publication chronicles.

Policy shifts of the mid-1980s brought down hardware tariffs to 60 per cent, exempted software export profits from tax, and allowed 100 per cent investment by foreign companies in this area.

Nearly one-quarter of the IT industry’s sales are tax free, estimates say. And views differ on tax concessions, which cost 0.2 per cent of GDP (gross domestic product) and are to expire in 2009. “Larger companies take the view that government support in the form of tax incentives and other benefits has been instrumental in the growth of software exports… On the other hand, surveys of Indian entrepreneurs in the US, considering investing in India, put the availability of a skilled workforce well ahead of fiscal incentives as a reason for starting a business here, in contrast to the views of US-based Chinese entrepreneurs who considered low taxation and market access prime reasons for investing in China.”

So, what is the final word on the debate? May be, tax concessions have little impact on the destination of FDI (foreign direct investment) if other general framework conditions for doing business are not also favourable, concludes the OECD, citing a 2006 research by Nicoletti et al.

Comprehensive analysis.

‘Tangibilise’ service

What are the characteristics of a service? It is: intangible, performed, perishable, people dominated, copyable, enabling, and open to ‘inter-customer’ influence, with no second-hand resale value, explains Ian Ruskin-Brown in Marketing Your Service Business ( www.vivagroupindia.com).

“Services are predominantly intangible,” he says, elaborating on the first feature. “A useful definition of a service compared to a ‘good’ is that the intangible elements of what are performed, form the greater part of what is important to the customer.”

Yet, you can ‘tangibilise’ a service, the author advises. People assess the service on offer using the ‘physical evidence’ associated with it, and you can provide the evidence deliberately. One of the examples he gives is of computer software for the home or small office.

“Notice how big the box is in which the necessary media (often a CD) is sold, even though the manual is often on the installation disk. Such small contents surrounded by so much air.” Why so? “If the box were smaller, the reasoning goes, customer would not feel they were getting anything that warranted the inevitable price charged.”

Insightful!

Automated marketing

The long-term goal of any automated marketing system in relationship marketing is the same for human interaction goals: ‘to develop a high-quality, long-standing relationship’ with customers. Thus states Jason Hartman in ‘Become the Brand of Choice’ ( www.jaicobooks.com). “Properly executed, an automated marketing program will increase the number of people who respond to your marketing efforts and, at the same time, lower the cost per sale.”

Building the database with the most useful information is the first ingredient he specifies. “The success of your program, however, depends on the quality and quantity of your information and how often it is updated.” You may wish to hire a data entry clerk to handle this task, but it is better for the sales department to input data on their own customers, suggests Hartman.

“No one knows them better than the sales representative.”

A buy to boost your sales.

Tailpiece

“To customer databases I give a different mobile number…the one that I give to my creditors.”

“A number that doesn’t exist?”

“No, its caller tune is the sound of a lion roaring. Very effective!”

dmurali@thehindu.co.in