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Telecom, civil aviation and insurance all have government-imposed entry barriers. They must also all hope for a customer with a long attention span. Short-term versus long-term. The analysis always differs. If India is ever to make the ranks of the world's turbocharged economies, let's be clear, the country is going to need millions and millions of people who are in close touch with others, and feel secure. People who needn't think twice before doing some things. Like flying across the country to meet a client at a moment's notice, calling office from the middle of some remote site, and taking a few risks (in the reassuring knowledge of a safety net for their family or even themselves). The million-odd people who are in that bracket already may not know it, but for millions and millions, India is under-networked and insecure. The only way to 'catch up' would be to overcompensate massively for these deficiencies, and that means investing in these sectors so heavily that the world sits up and wonders what the heck is going on. Where exactly the money comes from, to anybody who really cares, should be irrelevant. Irrelevant, irrelevant, irrelevant, so long as accessibility expands, and expands fast. That's the issue, and fostering intense private-sector competition is a method that works better than others that have been tried. So-shall we let all the world's phone services, airlines and insurers storm into India? It's a thought... ... but officials do have some good reasons why that cannot be done. The three sectors are not like markets for colas or burgers, they say, because the government is constrained to impose entry barriers here for varied reasons. Phone services use 'scarce' public property such as the bandwidth, and this necessitates the restriction of players to a few, as also their active regulation. So too airlines; besides, what if somebody starts flying spy planes? Insurers, meanwhile, must be long-term stable if they're not to crash, leaving angry customers for the government to placate. And so on and so forth. Some of those arguments sound reasonable, some of them hollow. But given the challenge India is up against, it would still make sense to err on the side of too many players and too much competition, rather than too little. This means minimizing artificial deterrents to enhanced business activity---of which FDI limits are doubtlessly a part. Regulation, in the long-term, could be left to the force of customer choice---as it gets institutionalised on its own. The thing is, this also calls for long-attention spans. Not customers who flit from one service to another on the basis of some freebie, but customers who actually think hard about their options in a much broader context. How, you might ask, does that favour existing players in any of the three sectors? Very simple. It's about long-term viability, and study after study has shown that businesses are served best by committed rather than whimsical customers. The target audience must develop a sense of trust in the brand. Say, a phone service that would never tap your line; an airline that would never cut safety corners; and an insurer that wouldn't gamble your funds on bad investments. For any private player, a good way to succeed long-term (and call oneself 'globally competitive') would be to outperform rivals in a domestic market that is not just highly competitive, but full of customers who exhibit behaviour that's spousal rather than moronic, to borrow David Ogilvy's famous quotation. These are customers who watch you and your sense of responsibility as closely as any long-term investor would (or ought to). That calls for long-attention span marketing, rather than the clownish gimmicks, ra-ra nationalist appeals or sindoor-dripping emotional baits that have suffused the media in recent years. Putting more thought into marketing would at least set the stage for a serious experiment in letting markets regulate themselves even in the so-called 'sensitive' sectors. India needs the vibrancy of fresh investment quite desperately. Take a look around. It is still under-networked and insecure.
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