With the growth of the public sector in Indian industry in the interest of the country’s Five-Year Plans, and the consequent progressive diminution of the private sector, controversy has naturally arisen over their merits and demerits. The Prime Minister has practically thrown his powerful weight on the side of the public sector, almost in the belief that it is a necessary corrollary of socialism. It may be mentioned here in passing that the British Labour Party, the leading exponent of socialism in the world, is having second thoughts on the necessity of nationalisation of some industries, which was taken for granted only a few years ago. Socialism in India is a mere imitation of British and European socialism and has not produced any outstanding socialist, barring perhaps the late Acharya Narendra Dev.
Prime Minister Nehru is in a class by himself and can afford to lay down the law even on socialism by dwelling on the necessity of adapting it to Indian conditions, while socialists listen with open-mouthed astonishment as if Indian conditions as well as socialism were entirely beyond the scope of their intelligence.
These are the circumstances under which the controversy is developing. Democracy demands continuous debate on every issue before the country, and it is no respecter of persons. In the firm belief that, if not today then tomorrow, reason and commonsense will prevail over dogmatic ipse dixits each one of us must in the interest of the country thrash out the pros and cons of this, perhaps the greatest, problem facing the country. If the growth of the public sector is demonstrably in the interest of the country, then obviously nothing should or can be allowed to stand in its way. But is it?
A pre-requisite
The success of the public sector, it should be obvious to the meanest intelligence, depends entirely on the presence of public spirit in those running it. Is this public spirit—zeal for the public good—present in any appreciable degree in our educated classes on whom the public sector must depend for its very existence? Can any one lay his hand on his heart and say that public spirit is not conspicuous by its absence even in those who have been talking of the need of selflessness in public works. We have the testimony of no less a person than a Congress President, Dhebar, that this prerequisite of public work is almost entirely lacking in those who are running the Congress organisation. If that is the case in the Indian National Congress, the less said the better regarding those who do not place selflessness in the forefront of their ideals.
Let us throw a look around the neighbourhood. What do we find? Here is what is called the Vanmahotsav. The saplings are planted with diligent care by an army of government servants in obedience to the directives of their minister. But how many of them survive the heat of the land, the depredations of roaming cattle and the destructive mischievousness of the rising generation? If you interfere with the latter, as I often do, a crowd gathers to support the query of the mischief-maker: “Is it yours?” Some of the crowd even go farther and make bold to inquire: “What do you lose?”.
I have yet to see a man who would go out of his way to pour a gallon of water occasionally around the trunk of a growing tree to stimulate its growth, even when right in front of his own house it is bound to provide him shade and coolness in summer and purify the atmosphere all the year round. We all behave almost as if the success of the tree-planting campaign will somehow do us incalculable harm.
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Central secretariat
Let us peep into the Central Secretariat, which is likely to provide the model for the offices of the public sector. The fear of the white man left the heart of the clerk with the departure of the white man and the inevitable result was go-slow tactics. Formerly an officer told me, they were expected to expedite work lest the inordinate delay come to the sahib’s notice with the attendant risk of some kind of punishment being meted out to the offender. But now no one is interested in getting things done and delay is the natural result. There are many reasons why this delay is getting longer and longer.
First and foremost is the fact that, all ministers being Indians, they have their “jat-wallas” (men of their community) if indeed not their relatives in their departments which ipso facto prevents action being thought of, to say nothing of being taken, to expedite work. Indeed, if those mentioned have the ears of their minister, their superiors know that discretion demands treating them as friends rather than as subordinates. The process incidentally throws open avenues in which the greasing of the palm becomes possible by those who may be in a hurry to get things done.
The number of employees in the Central Secretariat multiplied twenty times in the first ten years of Indian independence, increasing from about four thousand to eighty thousand. It is likely to increase much farther with the increase in the number of girl typists whose relatives have naturally to be accommodated by the boss of the office!
The question always is: “What do you gain?” or “What do you lose?” Do you gain by flattering the boss or by working hard? The answer in most cases is obvious. If we gain by flattering the boss, it is sheer folly to work hard, the former being so much easier while the latter only results in your being by-passed when the time for promotion comes. You have only to compare the staff of a government weekly with the staff of a weekly run under private auspices to see how, on the least pretext, vacancies are created to provide for relatives or friends.
For, in a government enterprise, the boss says while adding to the staff “What do I lose?” whereas in private enterprise the boss knows that that kind of thing is sheer lunacy because in the long run it will mean sheer bankruptcy. That is why the number in the Central Secretariat is rapidly increasing. They hardly do an hour’s honest work a day now. In other words, corruption is suicidal in private enterprise and therefore out of the question, while it is natural in the public sector. And corruption, of course, means waste of funds.
Also read: The average citizen in India is a victim of all kinds of abuses: KH Subramaniam
Lack of character
That in fine is the difference between the public and the private sector. In the public sector the boss is a trustee, the money comes from an ignorant public whose representatives can themselves be easily fooled, if they are not a party to the corruption prevailing, for, after all, what do they lose? The house of the Right Honourable Sir Tej Bahadur Sapru, when he was alive, was a forum for the intelligent men of the town for discussion of public affairs and almost every discussion boiled down to lack of character among our countrymen, although the subjects of discussion were generally the leaders of the land.
The public sector demands a high degree of character without which it will naturally tend to develop into a white elephant, and of that character there is yet no trace in the country.
The Prime Minister may be justified in saying that he has not been much impressed by the captains of industry in the country, even as the intelligentsia has not been much impressed by the quality of the socialist leaders of the land. But that is no justification for wresting their fields from the hands of the captains of industry and handing them over to those who cannot look after them as their very own business where success and failure is a matter of life and death.
Whoever heard of a government officer bossing over a concern spending sleepless nights because of the growing cost of production? Are these sleepless nights not common enough in the private sector? In the public sector the tendency inevitably is towards squandermania—as government reports themselves consistently show—while in the private sector the tendency, on the other hand, is toward miserliness.
It will be said that what is called squandermania only results in more people being employed and the public money thus goes into the hands of the public—sort of robbing Peter to pay Paul. So where is the harm? Quite true, but the result is rise in the cost of production. And what happens to exports when prices go on rising, to say nothing of inflation within the country? Exports just stop. This is what has begun to happen in the country. And we know what it means for a country, not self-sufficient in all the goods it needs, to have to stop exporting goods.
The profit motive is a natural motive and its unsocial aspect is being daily curbed by an evergrowing number of laws designed to disperse the profits among the producers while taxes take away an evergrowing percentage of the same. Nobody objects to humanitarian laws being passed. But to go on expanding the public sector at the expense of the private sector is to go on increasing the cost of production with resultant inflation as well as increasing an army of government servants who may naturally be expected to support the party in power and thus tilt the balance in its favour in all elections.
This is not democracy. It is not fair either and on both these grounds should be ruled out in a democratic country.
This essay is part of a series from the Indian Liberals archive, a project of the Centre for Civil Society. This essay is taken from the Indian Libertarian with the title “Public Versus Private Sector” published on 15 July 1959. The original version can be accessed here.