Small is beautiful

The promise of ever cheaper cars — Tata Motors’ Rs 1 lakh car; Maruti is promising to respond, others are interested as well — coupled with easier access to financing that has already happened, opens up interesting possibilities of equity. Just as Japan found in the late fifties and sixties, possession of three goods — in that case, a refrigerator, colour television and washing machine — gave the people a sense of entitlement and participation in the country’s economic turnaround, three products are becoming markers in India today. Possession of two of these is already growing at a fast clip: mobile telephones and television sets. The third — an automobile — remains out of reach for vast chunks of the population.

A clarification is in order here. Talk of economic liberalisation and access to consumer goods is usually seen as being relevant only to the rich and upper middle classes. But any analysis of first-time owners of mobile phones and television sets today shows that they come from income groups not usually seen to be part of the consumer revolution. The communications and information benefits from acquisition of these goods are also seen to make a marked difference in their production lives as well as leisure.

But mobile phones and TV have one advantage over cars — their supporting infrastructure is low cost and easily supplied by the private sector. Automobiles require roads; and road building, directly or through incentives for the private sector, is primarily a government business. Therefore, a lot of small affordable cars, a marvellous thing in itself, becomes a dreadful problem without a lot of good roads. It is bad enough there’s slow progress in the highway project. A bigger worry is that rural and small-town roads are often no better than dirt tracks. Many potential buyers of cheap small cars will use these roads. The success of electoral campaigns based on bad roads shows it is an issue with popular resonance. So just as affordable cars are good aam aadmi economics, motorable roads are good aam aadmi politics. If only politicians would understand.