Special issue with the Sunday Magazine
From the publishers of THE HINDU

CONSUMER : October 31, 1999

The right service, at the right time?

V. Y. Yegnaraman

The author is Chairman, SMN Consumer Protection Council, Chennai.

"A businessman to the public is what a honey bee is to a flower. It takes from a flower just the amount of honey it needs with least disturbance to it."

Business ethics? "It is a contradiction in terms." To many an acknowledged economist, ethics have no place in a successful business. But today, every business house preens its feathers over mission statements. To most civil servants, legislators, bureaucrats and even union leaders, demand for standards, accountability and transparency now evoke responses similar to what "business ethics" did to economists, business and trade.

Manoj K. Jain

Experts, the world over, agree that governments will continue to own, control and manage many essential functions including public utilities. Where the service has geographical scope limited to local areas, the state governments and where the area of operation is nation wide, the Central Government retains the utilities under their control. Therefore, it is not surprising that our government after Independence kept basic utilities such as railways, telecommunication, electricity, post and telegraph and public broadcast in the public sector. Later, some more services were brought under this umbrella - banking, life and general insurance and civil aviation.

The main reason why these were in the domain of the public sector was that this sector would be better inclined to offer citizens the right level of service at the right time at the right cost.

Over the past decades, there has been a deep and steady erosion in values and standards among the rank and file of political dignitaries. Most politicians today scarcely recognise or respect the people. The victims to the deep dive in their moral and ethical values, have been accountability and transparency and the understanding of people's needs. All public utilities in the public sector under the control of the governments and therefore parliament/ legislatures have also imbibed the same low standards and selfish values.

If only Jawaharlal Nehru had an insight into the depressing level that our utilities would sink to, he would not have proclaimed that the public sector was not for just profit; it was an avenue for employment to our teeming unemployed. Today, perhaps, the top level management may show some concern for the people. But then, they seldom come into direct contact with consumers. It is only those in mid-management and those at the delivery end who actually deliver the service. They are, unfortunately, not in the least concerned about people's needs. Corruption and a lackadaisical lethargy among them is the order of the day. It is these staff that determine the success of any utility. What kind of initiatives could be taken to instill a sense of service among these staff is an issue that managements have to study and implement.

There is a lack of initiative and enterprise among the top level of these utilities also, from the chief general manager downward.

A Chennai-based registered consumer protection organisation with national and international affiliations was awarded a grant by the Department of Consumer Affairs, Delhi to start an information centre. They needed a telephone and applied for two lines under "special category" as they were eligible for it. But the Chennai Telephones Chief General Manager refused and registered the organisation's application under the general category saying that consumer organisations are not clearly specified in the list. The organisation said that the listing was done before the Consumer Protection Act was enacted and that Chennai Telephones should go by the spirit of the listing. But the General Manager did not budge. Again, when instances of some consumer organisations which had been given connections under the "special category" were pointed out as precedents, the official's unexpected remark was that those lines would be disconnected. This is how responsive and responsible some public officers can be!


There were times when government employees were not well paid, but now things are different. Still, very often, claiming additional rewards, they go on nationwide strikes holding the management and consumers to ransom.

The leaders of their trade unions do not seem to realise that their responsibility is primarily to act as intermediaries between the workers and management to resolve problems amicably, to ensure that the wheels rotate if it is an industry, or the doors hospitably open if it is a service provider. On the other hand, what we see is that some of them are anti-management and belligerent. In due course, these leaders enter politics and thrive by enlarging their subservient flock into vote banks. If they want, by effective interaction, they can improve standards much faster and more purposefully.

The public relations and legal officers of utilities are those who, with sensible, responsible, and timely action can redress the grievances of consumers. Thereby they can not only enhance goodwill but circumvent litigations also. Some typical cases come to mind.

A consumer bought at Chennai, round-trip railway tickets for his family but had to cancel halfway through. The Commercial Department at Chennai, according to the consumer, advised him to apply to the regional office controlling the station where he cancelled his trip. The officials, after several reminders and months, sent the claim to Tiruchi which in turn sent it to Chennai where such claims are to be settled. In the meantime the consumer filed a consumer complaint. The consumers Forum ordered that he should have applied in time to the right office and that the question of refund was within the purview of the Railway Rates Tribunal. The forum ordered costs to be paid by the consumer to the Railways. On appeal to the State Commission the earlier order was confirmed but it cancelled the costs. The consumer then sent an application to the vigilance officer who sent a refund order signed by the Railway Commercial Officer collectable at Mambalam Railway station in Chennai.

Now, when the staff of the commercial department, Chennai advised him to apply to another region, that office forwarded it to Tiruchi which in turn forwarded it to Chennai. How can a consumer know where to apply? If it is a matter under the Rates Tribunal, how did the same Commercial Department pay?

A consumer applied for a telephone connection for the tenant's use. The department authorised tenant's use. When the work order for installation was received from the department both the applicant and his tenant met the engineer who said that the instrument would be connected shortly. Thereupon both signed a letter agreeing to pay rent for the instrument as if it was installed on that day itself. Though the connection happened only after four months, the department sent him rental bills for the period when it was not installed. So he filed a complaint.

While the complaint was pending, the department sent the complainant a notice for unauthorised use of the telephone. He replied that it was authorised for the tenant's use. The forum ordered in favour of the consumer but the compensation barely covered the illegal rent he had paid and the due interest on the sums. Also, the telephone was not reconnected. The tenant who wanted a telephone, terminated his tenancy. Both parties appealed and the State Commission confirmed the lower court order.

Siddhartha Mitra

The utilities staff behave irresponsibly and unbecomingly because they are not made accountable for their deeds. One wonders why such compensations ordered by courts are not debited to the wrong orders. If such compensations are collected from them, such dis-services may reduce and it might deter future wrong doings of others too.

In a vast country like India, it is but natural that some utilities become monopolistic monoliths. Their governance and administration, however much decentralised, have become impractical. Their participation in consumer welfare, accountability to the public and superiors, their transparency in operation which are glaring by their absence have made many wonder what to do.

The Consumer Coordination Council, a group of consumer activists/ organisations, felt the imminent need to make these public utilities responsive and accountable. They resolved to form a working group to establish a public utilities commission, as in the U.S. to go into this issue. The Central Consumer Council, an advisory body to the government under the Consumer Protection Act, did constitute such a working group in 1991 with the following terms of reference:

"The working group shall examine the setting up of a quasi-judicial mechanism on the pattern of the Public Utilities Commission in the U.S. to ensure accountability in public utilities which enjoy monopolies both in State and Central level in order to protect the promotion of consumer interests".

Chaired by Mira Das, an MP, it had five other members. They drafted and sent a questionnaire to all stakeholders. After a study of replies to questionnaires and extensive consultations, the following recommendations were made:

  • In public utilities under the control of the Government and Parliament there is lack of effective control resulting in poor service and unhealthy attitude. Governments alone cannot be the best judges of public interest. Legislatures do not have sufficient time, expertise or resources to regulate public utilities.
  • The response indicated that the Public Utilities Commission could regulate prices, tariffs, rate base/ design, supply and peak demand, standards, quality of service, technology, environmental/ pollution issues, costing and pricing cross-subsidising.
  • The PUC to be a statutory quasi-judiciary body to control public utilities and to hear and pass orders on consumer grievances.
  • To establish separate PUCs for Centre and States with requisite qualified/ experienced staff and funds.

The working group met last in January 1993 and thereafter presented the above recommendations. The government sent it to the ministries and departments concerned. Perhaps they felt that a single PUC to cover all utilities may be a monolith by itself and hence be unable to address all issues effectively. Though the PUCs were not formed we see the after-effects of this exercise in the form of regulatory authorities for some utilities viz: telecom, insurance, electricity and so on, with wide proven powers. Such regulatory authorities must soon be formed for each public utility both at the Centre and the States. They should be statutory bodies with wide powers to plan, control and adjudicate. In such authorities, representation by proven consumer activists should be a must unlike the recently formed Tamil Nadu Electricity Authority with a civil servant as its head and a couple of retired engineers as members. I feel that if they could have the perspective and vision to control and improve utilities, they should have achieved it by now without any need for a regulatory authority. The solution lies in broad-basing the committee.

Citizen Feedback on Public Services in Bangalore
SERVICES Average Rating % Satisfied
% Dissatisfied
Bangalore Development authority (BDA) 2.5 01 65
Bangalore City Corporation (BCC) 2.9 05 49
Bangalore Water and Sanitation Board (BWSSB) 3.0 04 46
Karnataka Electricity Board (KEB) 3.5 06 31
Regional Transport Office (RTO) 3.5 14 36
Telephones 3.6 09 28
Banks 4.0 20 26
Hospitals 4.3 25 19

A report card survey was conducted by the Public Affairs Centre, Bangalore, on public services in Bangalore, Ahmedabad and Pune recently. Convinced that the collective voice of citizens and all stakeholders will have the power to mobilise sufficient noise and muscle to make service providers wake up, the survey was conducted among consumers by the random sampling method. The response was good and the ratings of users were as follows. Even services that fared better such as banks and hospitals got a satisfaction level of only 20 to 25%. The poorest rating was 1% as can be seen in the table.

Spending money on bribes, besides unproductive expenditure such as on gensets for power failure, private water tanks to ensure water supply and so on forced on citizens to compensate for inefficiencies in services. These direct and indirect costs to consumers was estimated at Rs. 100 billion in this city alone. What a high mislocation of consumers' funds for the inefficiency of utilities. As the report was by an independent body with unquestionable credibility, the findings were well publicised by the media. This collective voice was favourably received and acted upon by the utilities. The utilities in Pune and Ahmedabad fared no better.

Our government which has not so far revised the antiquated act and rules on Public Utilities should at least now acknowledge consumer voices and bring about changes in the acts and controls on managements at all levels. Because of these acts, some disservice of public sector utilities do not even come under the purview of the Consumer Protection Act.

The author thanks S. Pushpavanam, Consumer Education and Research Centre Tiruchi for his report on PUC and Samuel Paul, Public Affairs Centre, Bangalore for its publication on Report Card on Public Services.

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