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Last updated: 23 Aug, 2022  

f.9.thmb.jpg 'India requires a right mix of public and private sectors'

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Vishnu Makhijani (Source: IANS) | 23 Aug, 2022
India can never be fully dominated by the public or private sectors; there has to be right mix of the two and while the governments privatisation effort "is driven chiefly by the consideration of fiscal deficit", the private sector has not risen to the countrys socio-economic challenges, says Ram Kumar Mishra, Senior Professor at the Institute of Public Enterprise (IPE) and co-author of "Creating, Building and Sustaining an Institution" that traces its contribution over the last five decades to public policy, governance, corporate social responsibility, and management education.

"India is a mixed economy. Both the public and the private sectors are the two parts of the Indian economy. Neither, India could be a full-fledged private sector dominated economy, nor it could be a fully public sector commanded economy. There has to be a right mix. The mix will depend on the public policy," Mishra told IANS in an interview.

"The public sector has to stay in such spheres of the economy where the private sector is not prepared to come in. The privatisation program of the government is driven chiefly by the consideration of fiscal deficit. The private sector has not come up to its expectations of rising equal to the socio-economic challenges," he added, pointing to the energy sector as an example.

"The private sector has not come forward to take over the DISCOMS in the power sector. We can also cite in support instances relating to the coal, steel, and electronics sectors," Mishra said.

Quoting from his experience of serving on the boards of a few public sector defence enterprises and studying their relationship with the three wings of the defence services and the DRDO, he said: "All these organizations continue to depend a great deal on public sector defence enterprises."

"Like the restructuring going on in the public sector defence enterprises, Ordnance Factory Board (OFB) has also gone through one. In my stint on the board of a joint sector enterprise headed by a former Chairman of the OFB, I gathered that the public sector ordnance factories are the spine of our security both internal and external. The private sector needs to come forward to strengthen the country's defence," Mishra asserted.

Overall, he said, "the future seems to be challenging and bright" as today, there is an accent on the efficient sector whether it is public or private.

"There are many areas where the private sector has not forayed. The public sector will continue to be present in the areas of advanced research in the health sector and genetics, energy sectors, railways, provision of welfare services, steel and fertilizers besides banking and financial services sectors, and also as an aggregator in the area of food procurement," Mishra said.

The book, co-authored by Geeta Potaraju, who heads IPE's Centre For Governance and Public Policy, and published by Academic Foundation, details the four phases in the Institute's journey: Evolution (1964-80), Growth (1981-93), Volatility (1993-2004) and Transformation (2004 onwards).

"IPE has been having tremendous resilience. It was in 1991 the Government of India approached the Institute to suggest restructuring models for the public sector. The government intended to earmark the sectors in which public and private sectors could operate. The institute suggested two models: A 2*2 matrix approach and a public purpose, cum financial performance model. Based on these models, a list of public enterprises was submitted to the government," Mishra explained.

"The government has, by and large, implemented the recommendations. While making recommendations, IPE was clear that in no circumstance there would be wholesale privatisation. This can be seen from the fact that the number of SOEs (state-owned enterprises) is increasing year by year," he added.

Pointing out that the investment in these enterprises has also been recording a heavy increase, Mishra said the technology backup and advanced research in this area have provided the leeway to these enterprises in the steel, electronics, services, and consultancy sectors.

"Considering these trends and the proclaimed policy of the government, the Institute diversified its activities in the areas of research, consultancy, training, and management education. Its policy studies and problem-solving skills possessed by the faculty under the dynamic leadership of the board have catapulted it to an unenviable position among think tanks.

"While it continues to serve public enterprises, its activities in the other areas yield about 80 per cent of the income. This diversification has strengthened the Institute over the last 20 years and brought it to the stature of being known in India and abroad," Mishra said.

Vision and mission, and their assiduous follow-up have been the key characteristics of IPE's growth, taking it to the apex position, while the diversity of faculty in terms of their education, locale, languages, religion, and experience (academic, industry, public service, and international experiences) have been the upshot of the institutional building.

While the Institute was set up by the then Cabinet Secretary, S.S. Khera, and Dr. V V Ramanadham, Professor of Eminence, Osmania University, and later Advisor to the United Nations, IPE has been financially self-reliant from its inception on the revenues generated through its activities.

Besides training 50,000 public and private sector managers, IPE has completed around 500 consultancy and research assignments and around 400 and more MDPs (management development programmes). It has trained about 1,600 IAS officers and is connected to a large number of universities, ministries, government organisations, International bodies, and NGOs and has produced more than 100 Ph.Ds.

What next?

His next book with Dr. Sandeep Kumar Kujur (IIT, Chennai) and Prof K Trivikram, Head, Economics Area, IPE titled "Higher Education, Employment and Economic Development in India: Problems, Prospects and Policies" is with a publisher. His other book with Dr. Hilal Ahmed, Center for Development Studies, New Delhi, and Dr. K.N. Jehangir, former Director (International Relations, ICSSR, is also in press. Besides, he is also working on a book titled "Sustainable Tourism" with Dr. P Janaki Krishna, Head, Center for Sustainable Development, and Dr. Ch. Lakshmi Kumari, Professor Economics and Coordinator Center of Excellence in Sustainable Development, Erasmus+, the EU's programme to support education, training, youth and sport in Europe.

Now, that's what's called keeping your hands full!

(Vishnu Makhijani can be reached at
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