Public Sector has been a focus of
acrimonious debate over a considerable period of time. Divergent
views have been expressed by distinguished Economists, Politicians and
the captains of Industries scanning its merits and de-merits. Started
with only 5 Central Public Sector Undertakings in the year
1951, over the last four decades the number of PSU has
crossed now 250. With an initial investment of Rs 29 crores
only, today the investment figure stands at more than Rs 1
lakh crores. All these were done with a sole objective at attaining
a commanding height by the Public Sectors in
Indian economy and also to give a thrust to the process of Socio - Economic
Development in the country with a noble objective of improving
the quality of life of the people in general. Undoubtedly,
with the enormous size of the Public Sector and its multi - faceted activities,
it not only acted as a catalyst to economic and technological advancement
in the country, it has also acted as a trend setter for creating
opportunities for the Private Enterprise.
Although, Public Sector gave
a tremendous boost to the Indian economy up
to a certain stage but its deterioration became so palpable
that it attracted criticism from all corners. The great
task assigned to the Public Sector in generating wealth
for improving the quality of life of the
common people remained more a dream than a
reality. A huge investment in Public Sectors
could fetch a meagre return for ploughing it
back for its expansion and diversification.
Instead of becoming self-reliant it
started depending more and more on Government
subsidy thereby creating undue pressure on
the public exchequer. There was virtually
very little accountability of the Public
Sectors for their failures. The symptoms of
mismanagement were manifest in its over
manning, under-utilization of capacity, low productivity, high inventories,
over capitalization, time and cost over-run in implementing projects and
indifference to quality of it services and products. Till MOU concept was
borrowed from abroad and instilled in major PSUs, the Public Sector had
hardly any accountability and they also functioned with a very little autonomy.
A remarkable progress, however, is noticeable in this regard during last
3 years. Dis-investment of Public Sector shares as pronounced as a policy
decision by the Govt. of India is also expected to inject greater sense
of accountability in the PSUs.
The Pubic Sector which worked under
the umbrella of full protection of monopoly have a better track record
than other public undertakings, who operated in a competitive scenario
right from the beginning. Even those PSUs who faced limited competition
in an oligopolistic situation did better. One of the wrong decision taken
by the Government in taking over hundreds o sick Units, which were left
moribund by private owners, has undoubtedly told upon Govt. Exchequer heavily.
Majority of such sick Units had nothing to do with fulfilling any special
social objective but they were simply manufacturing either consumer products
or engineering goods and they could not be nursed back to health despite
heavy dose of investment by the Govt. Such taken over PSUs either have
already been referred to BIFR or contemplated to be referred to BIFR but
the outcome is not at all encouraging. The political consideration over-ruled
the economic consideration in taking over such a large number of Public
Sector Undertakings. All these have contributed to slower economic growth
which was expected to be much more faster with the massive support the
Public Sector received from the Goverment at initial stage. One of the
clear objectives of Public Sector was to create enough employment opportunities
for the country. But such employment opportunities could be ensured if
there was generation of adequate surplus for modernization, expansion and
diversification of the PSUs. Public Sectors could do little headway
on this score and hardly 22 lakhs people are employed in Public Sector
Undertakings today. As against a prohibitive figure of more than 3 crores
registered unemployed today a figure of 22 lakhs sound ridiculous. So the
objective of the Public Sector has been met with a very limited success.
It is true for not only in India, the same situation has been experienced
all over the world where Public Sector took a dominant role.
In the developed countries in Europe
and Northern America, there was a good deal of pressure to privatize the
existing Public Sector Undertakings on the ground that the private enterprises
are more competent to manage their affairs. In Britain during the tenure
of Labor Ministry, many key industries were nationalized. But, when Mrs.
Thatcher came to power there was a drastic change to reverse the trend
and it is believed by many that the Britain's economy could be revived
mainly because of this reversal. To cite an example, British Airways which
was incurring heavy losses year after year is now earning sizeable profit
after de-nationalization.
The new wave of liberalization and
market economy have invaded the whole world. The red bastion in Russia
tumbled down, the Berlin wall was demolished and a concept of integrated
global economy emerged. The impact of such a drastic global change also
swept across all the developing countries and India was not an exception
to it. So, in July'91, the historic Industrial Policy on liberalization
and market economy was pronounced by Goverment of India. The measures proposed
for liberalization and strengthening market economy have been amply reflected
in successive two budgets. Now, there is a million dollar question which
agitates
the minds of people right from the intellectual to the common man. Will
the Public Sector survive in such an environment of fierce competition?
The competition is fierce in the sense that not only the indigenous private
owners are coming more and more in the fray to compete with the PSUs but
also the industrialists abroad now easy access to Indian market.
Having my long association with
Telecommunication Industry in India, I would like to give vent here to
some of my personal experience on this score. Prior to Independence, telephone
connection was limited to few principal cities in the country and these
facilities were enjoyed by a few privileged subscribers. There was no indigenous
manufacturing facilities for telecommunication cables or equipments in
the country. To overcome the situation, the Goverment of India decided
to set up Indian Telephone Industries (ITI) in the year 1948 for manufacturing
exchange equipments and telephone sets. The Goverment also decided to establish
Hindustan Cables Limited in the year 1952 for manufacturing Telecommunication
Cables. These two Public Sector Industries provided the telecommunication
cables, exchange equipment and telephone sets to Department of Telecommunication
(DOT) for expanding and updating the telephone network in the country.
With a limited resources of the Goverment success in the field of telecommunication
in India is noteworthy, which will be evident from the following figures
:
-
The number of telephone exchanges in
the year 1948 in the country was 321 which was increased to 12084 in the
year 1987.
-
The telephone set in the country was
only 0.168 million in 1948 which was increased to 4.420 million in the
year 1987.
-
The effective trunk telephone call in
1948 was only 4 million whereas it was 287.21 million in the year 1987.
Hindustan Cables Limited established
in 1952 commenced its production in 1954 with an initial capacity of 1.5
lakh CKM of Paper Insulated Dry-Core Cable and with sales turnover of Rs
16 lakhs only. As against the above they produced 39.7 lakh CKM of Jelly
Filled Cables and 25536.09 Fibre KM of optical Fibre Cables in the year
1992-93 with a total sales turnover of Rs 523 crores. Although started
with Dry-Core Cable with advent of new technologies they lost no time to
align themselves with the needs of technology and progressively set up
manufacturing capacity of different types of cables of newer generation
viz., Coaxial Cables, Aluminum Sheathed Cables, Jelly Filled Cables, Copper
Coated Steel Wires and Fibre Optic Cables. It earned reasonable surplus
throughout its lifetime barring three years and created reasonable surplus
for ploughing back. Since the rapid discontinuity of technology has been
the recent phenomenon the old products like Dry-Core Cables, Coaxial Cables
became obsolete. The Company, therefore, had to embark upon a quite a number
of modernization and replacement projects to meet the situation arising
out of technological obsolescence of products. Since, new products like
Jelly Filled Cables, Fibre Optic Cables are being manufactured with the
state-of-the-art technology the manpower requirement became lesser as compared
with the past. To tide over the situation the Company has taken up a number
of diversification projects. Having been in the monopolistic position over
decades the Company enjoyed price preference and the purchase preference
simultaneously and worked under a protected environment. But with the emergence
of more than 15 competitors from within the country, the price is now decided
through the process of lowest bidding which has brought down the price
of the products substantially affecting the sales turnover. On the other
hand due to emergence of large number of competitors, the country appears
to have under-utilized its built-up-capacity, as there is no matching demand
against supply. Like other Public Sector Undertakings, the burden of the
social cost in Hindustan Cables is too much, which the company is unable
to afford in this competitive scenario. The cumulative results of all these
have forced the Company to tighten their belt and the Company is fighting
tooth and nail to adjust itself from the protected business environment
to "Market Friendly" economy in the shortest possible time. Series of measures
are being taken to increase productivity by reducing cost in all fronts,
be it material, capital or labor. Quality awareness is all pervading now
in the company. To gear up with the new situation workers are being trained
and retrained in a massive way for re-deployment in newer machines. Voluntary
Retirement Scheme has been introduced to take care of the redundant people.
The Company is confident to remain market leader in the field of telecommunication
cable of the Country having served it for more than four decades with distinction.
But, there is no denying the fact that the Company needs some breathing
time for confronting so many hurdles, for which it requires unstinted support
from the customers and overall support from the Goverment, who till today
is believed to be the saviour of the Public Sector. |