The government must ensure public sector autonomy

Public sector,incursions in private sector

In my last column I wrote about the government trespassing on the autonomy of other institutions. This week I am writing about incursions in the public sector. In his biography of PN Haksar, Jairam Ramesh says the civil servant who was so influential, so close to Indira Gandhi that he was described as her alter ego, was a prime mover in the “high noon” of nationalisation, 1972. But only two years later, Haksar angrily denounced the way the public sector was being managed and, in particular, condemned the interference by politicians and civil servants in the management of public sector companies saying, “remote control from the secretariat in New Delhi is exercised by men, both politicians and civil servants, who have no knowledge, and even less experience of running enterprises of any sort, unless self-advancement could legitimately be called an enterprise”.

This chronic trespassing on the autonomy of public sector companies may no longer occur but their use by the government for its own purposes continues. From time to time, the Life Insurance Corporation of India (LIC) has been called on to disguise failed privatisations as successes by buying shares no one else wanted.

Now we hear that the National Small Savings Fund (NSSF) is to be obliged to mount yet another rescue operation for the nationalised Air India, following the failure of the recent attempt to privatise it. The NSSF also plans to invest ~1.3 trillion in government agencies like the Food Corporation of India. Such decisions are always taken to save the government of the day.

Indian Railways has been dealing with its over manning by a policy of natural wastage. But with the election in sight and the government facing allegations that economic growth has not created jobs, the government has told the railways to recruit 127,000 people. Will the new recruits add to the efficiency of the railway or will they just get in the way as surplus manpower always does? The last time the railways advertised jobs, 9.2 million people applied. Applicants frustrated this time may perhaps vent their anger on the government.

The LIC, the NSSF, and the railways are all central government institutions, so the Press brings political interference in their affairs to our attention. Almost forgotten is the interference in the public sector at the state level. Chairmanships are handed out to MLAs as consolation prizes for failing to get into the cabinet.

The chief minister of a northeastern state recently appointed 10 MLAs among the 49 people he chose as heads of government corporations and boards. The chairman of a state-owned company and two MLAs have been given cabinet status. RSS members and former chief secretaries have also been rewarded with chairmanships. How many have any qualifications to head their enterprises?

Haryana has 37 boards and corporations. A sad story from there illustrates my point. Two women made such a success of breathing new life into the Khadi and Village Industries Board while serving as the chief minister’s Good Governance Associates that at the end of their one-year term, the CEO of the board wanted to give them jobs as advisers.

Three times they were called to Chandigarh to discuss terms. Three times they were assured appointment letters would follow. Three times they didn’t. After three months, they are seeking jobs elsewhere. Sources in the board told them the chairperson, a political appointee with no experience in Khadi, refused to sign the letters because she had personal ideas about who should be appointed.

Nobody knows how much government money must be wasted by political interference in the government corporations and boards in states in India all these years.