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Jul 22, 2003
A fresh insight into changing India

After being a placid lake with no ripples on it for decades, India’s telecom scene is now a raging sea. Assisted by deregulation, entrepreneurial spirit and discerning, demanding consumers, waves of change that originate anywhere in the technological world arrive on India’s shores in no time at all.

Look at the changes since a domineering state ran the service barely 10 years ago. We have come to expect choice, efficiency and falling costs. Private sector pushed the state on the backfoot. Then Public Call Offices [PCO] popped up everywhere and integrated the country. And now we are in the throes of a mobile revolution that threatens the PCOs.

Ila Patnaik writing in captures the scene in a racy article that is easily the best potted telecom history of the last two decades.  She says, threatened by cell phone industry’s falling tariffs for long distance calls, PCOs are reinventing themselves into computer based information service providers offering net access, video conferencing etc. A new phase is emerging.

But obliquely she also makes some perceptive observations on our labour markets. She says, “This is a striking example of flexibility in the Indian economy. Relative prices have changed, so an industry will die. It will be replaced by new and cheaper ways of getting the same work done.... the bulk of India’s labour market is based on sound market principles, where hire and fire is an everyday reality, where firms are born and die, based on pure competitive forces, where trade unions do not exist, and labour is genuinely mobile and adaptable… Labour market flexibility in India is reality for all but a small labour aristocracy.”

To read this informative article click here.

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