Page 216 - DECO502_INDIAN_ECONOMIC_POLICY_ENGLISH

Indian Economic Policy

Notes Then came a time when the government company form was most prevalent. Following the
developments in the international field, particularly in England, corporate form was adopted in India
too.
And a host of corporation was created, both sectoral and multipurpose as well as development
corporations. Lastly, joint ventures came on the scene again taking a cue from the development in the
world.
The management has all along been a problem to tackle. In the first place, there has been a consistent
dearth of managerial skills in the country, both at the initial stages as well in recent past.
The constitution of management boards is the other major problem, which merits attention most.
Here, the government burdens the governing board with the civil servants, undermining the principle
of autonomy of the enterprises. The management board tilts the balance of decision making on policy
matters greatly in government favour and thus reducing the enterprise to, more or less, a department.
Personnel Administration

The personnel management of the public sector is beset with a plethora of problems which are mostly
responsible for it’s inefficient, uneconomic and below standards performance.
The recruitment to public enterprises is done by individual enterprises or by a central personnel
agency for a group of enterprises in a given sector following general guidelines of the government in
matters of reservations, etc.
The tendency to second the civil servants to top management is so rampant in the country that it
negates the initiative of inbreeding and the insiders are disillusioned, not to talk of their disappointment
and disinterestedness.
Remuneration or compensation to the employees is another area, which needs prompt attention.
While compensation to top managers is usually high in most of the enterprises with innumerable
perks and other amenities and benefits, it is progressively lower in the middle and lower level
managements.
The performance appraisal in most of the public enterprises is done only as the annual recording of
character rolls. These results in the low standards of performance and the efficiency of the enterprises
go down progressively.
Financial Management
The prime requirement of majority of the enterprises is the sound and scientific financial management
as they lack financial discipline, consciousness and professionalism.
The financial advisor has to play a crucially important role in the management of finances of the
public sector enterprises.
Budgeting, the most crucial of all the segments of financial management, is not properly practised in
the public enterprises in most cases.
A number of agencies are involved in the planning and control of financial management of public
enterprises in the country, viz., Board of Management, Administrative Ministry, Ministry of Finance,
Bureau of Public Enterprises, Planning Commission, Director General of Technical Development
and Public Investment Board.
Workers’ Participation in Management
With a view to ensure increased productivity for the larger benefit of the enterprise, the employees
and the community, to give workers’ better understanding of their role in the production process
and to satisfy their demands for self-expression leading to better industrial relations, worker’s
participation in management (WPM) was launched.
The process of WPM involves four main steps, viz., information sharing, joint consultations, joint
decision-making and self-management. The workers are involved at all these levels to take the decisions
in the best interest of enterprise.

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