INDIA SURVEY: Corporatize and downsize railways, postal services
New Delhi–Feb. 23–The Indian government’s Economic Survey has recommended
corporatization and downsizing of departmental enterprises like Indian
Railways, India Post and state-run broadcasting corporations like Doordarshan
and All India Radio. The survey for 2000-01 (April-March), presented in
parliament by Finance Minister Yashwant Sinha, also suggested selling
government stake in these newly formed corporation to public at a later stage.
* * *
The funds generated from the sale of shares could be used to repay debt
incurred by these departmental enterprises, the survey said.
Departmental enterprises like railways and posts are the largest employers
in the country. The government has already converted the Department of
Telecommunications into a company–Bharat Sanchar Nigam Ltd.
It also suggested setting up an independent regulatory authority to cover
‘natural monopoly’ segments like the rail track network.
“Many observers have noted the large size of the government in terms of
number of employees. Few, however, realize that this is largely due to the
bloated size of departmental public enterprises whose staff are technically
employees of the government and are shown in budget documents as such,” it
said.
“The conversion of departmental enterprises into companies is essential
for infusing them with commercial culture and subjecting them to market
incentives and competitive pressures,” the survey said.
In comparison with these departmental enterprises, downsizing of the
government would not result in much fiscal saving, the report said.
“The primary purpose of such downsizing is to eliminate bureaucratic
controls and to change the anachronistic command mentality still prevalent in
the system,” it said.
The report further said all departments, divisions and ministries, whose
primary purpose was to control and direct the economy, should be abolished.
Once this is done, the survey said that government would be forced to
become a facilitator of economic growth and investment. End
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BRIDGENEWS GLOBAL MARKETS, 23rd February 2001
