December 23, 1960 archive of The Times of India: India's Post Office socialism
Economist JK Galbraith sheds a light on the problems of government-owned companies.
The Harvard University professor who, according to reports from Washington, is expected to be the next Ambassador to India under the Kennedy Administration, said while he was impressed by the progress India had made in many directions since he last visited the country three years ago, he was also impressed by the lack of progress in working out a rationale of Indian economic institutions.
India, he said, had a kind of "post office socialism" that was out of date and was working less than it should. While the principal enemy of public enterprise in the old days was those who frowned on socialism, in India it was the socialists themselves, he said.
Galbraith pleaded for greater autonomy and freedom for public enterprises from ministerial control and suggested that officials should never be members of the boards of directors of these undertakings. Otherwise, the autonomy of the enterprises would almost certainly be lost as the board would become links in the civil service hierarchy.
Ministerial supervision must shrink to a minimum. Their principal functions should be confined to the selection of good managers supported by competent but not powerful boards, and provision of firm but workable rules. The expansion and operation of the public sector enterprises should be tied together by the financing function.
There was a good deal of debate over cooperatives, small industries and other such issues, but there was very little public discussion of the organisation of the public sector.
Galbraith said even a brief stay at the actual sites of the new steel mills in India revealed numerous faults ...Competent executives were frustrated and angry over the centralisation of purchasing personnel and financial decisions in New Delhi.
India, he said, had a kind of "post office socialism" that was out of date and was working less than it should. While the principal enemy of public enterprise in the old days was those who frowned on socialism, in India it was the socialists themselves, he said.
Galbraith pleaded for greater autonomy and freedom for public enterprises from ministerial control and suggested that officials should never be members of the boards of directors of these undertakings. Otherwise, the autonomy of the enterprises would almost certainly be lost as the board would become links in the civil service hierarchy.
Ministerial supervision must shrink to a minimum. Their principal functions should be confined to the selection of good managers supported by competent but not powerful boards, and provision of firm but workable rules. The expansion and operation of the public sector enterprises should be tied together by the financing function.
There was a good deal of debate over cooperatives, small industries and other such issues, but there was very little public discussion of the organisation of the public sector.
Galbraith said even a brief stay at the actual sites of the new steel mills in India revealed numerous faults ...Competent executives were frustrated and angry over the centralisation of purchasing personnel and financial decisions in New Delhi.
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