Tuesday, June 15, 2010

Public sector revival in Kerala?

Kerala's Industries Minister, Mr Elamaram Karim, recently announced a working profit of Rs 239.75 crore in 2009-10 for public sector undertakings (PSUs) under the State Industries Department, up from the previous year's Rs 222 crore. The Minister also told a press conference in Thiruvananthapuram that the number of profit-making companies has risen from 28 to 32 between 2008-09 and 2009-10. All the 37 units under the State Industries Department would rake in working profits during the current financial year, the Minister asserted.

In 2005-06, only 12 PSUs were generating profits. But, under the Left Democratic Front (LDF) government, the Minister pointed out, the number of profit-making units has grown steadily – 24 in 2006-07, 27 in 2007-08, 28 in 2008-09 and 32 in 2009-10. The total working profit also rose from Rs 56.38 crore in 2005-06 to Rs 239.75 crore in 2009-10.

The total turnover of Kerala's PSUs has also been burgeoning — Rs 868.13 crore in 2005-06, Rs 1,451.83 crore in 2006-07, Rs 1,533.66 crore in 2007-08, Rs 1,867.96 crore in 2008-09 and Rs 2,130.08 crore in 2009-10.

A day before the Minister's triumphant announcement, the State Cabinet sanctioned a capital investment of Rs 125 crore to start eight new public sector industrial units during the current financial year.
These are: Hightech Spinning Mill at Komalapuram (Rs 36 crore), Hightech Weaving Factory at Kannur (Rs 20 crore), a textile mill at Kasaragod (Rs 16 crore), a cable making unit at Kannur (Rs 12 crore), a tool room at Kozhikode (Rs 12 crore), a unit of Keltron at Kuttippuram (Rs 12 crore), a forging unit at Shoranur (Rs 12 crore) and a meter factory at Palakkad (Rs 5 crore).

Do these jubilant declarations of the Industries Minister indicate that the State's PSUs are finally finding their way out of the woods? Not quite. The State's own Planning Board admits: “Historically, the backbone of modern industry in Kerala was laid by PSUs. The performance of these PSUs has shown a fluctuating trend, some achieving a turnaround in recent years, while others running into recurring losses.”
And these losses – accumulated losses, resulting from high-interest loans – could well sound the death knell for Kerala's PSUs. The Draft Approach Paper to the Eleventh Five Year Plan of Kerala prepared by the State Planning Board admits as much: “Loss-making enterprises are ipso facto inefficient or constitute an economic millstone around the State's neck”.

And yet the solution, feels the LDF government, is not the customary one: “The State, which is already facing severe fiscal strain, cannot afford this loss for ever. At the same time, the State cannot simply close them down or sell their assets at whatever price they can fetch in the market, involving the neoliberal route of ‘privatising the PSUs'.

The Planning Board, therefore, believes in implementing a long-term plan for restructuring the loss-making PSUs on a case-by-case basis. Restructuring and revival packages have to be formulated for PSUs and for this we have provided funds for them.”

The State Planning Board's Economic Review 2009 adds: “The present government, in contrast to the previous government, has taken a very supportive stand, strongly backed by the State Planning Board, and had made financial provision in each year's budget. In the 2009-10 budget, Rs 50 crore has been provided for the rejuvenation and revival of viable PSUs.”

Thus, from what the Industries Minister has claimed, it can be inferred that the current improved performance of Kerala's PSUs – if unequivocally accountable to an honest auditor – can be sourced to some improved monitoring, control and surveillance mechanisms.

But, the way ahead is clear. As the State Planning Board itself admits, the solutions are fundamental: “The performance of the PSUs can be improved by initiatives like imparting professional management skills to managerial staff, regular monitoring of performance, systematic and scientific annual budgeting, strengthening of auditing, harnessing the synergy of PSUs through organising their operations on terms of mutual benefits, combined sourcing of raw materials and components, business collaboration with Central PSUs/government, and, merger and amalgamation.”

Apparently, managing – and even reviving – PSUs is no rocket science. Yet one caveat applies: interfere not politically, for that encumbrance has been the bane of Kerala's PSUs.Savoring the Spice Coast of India: Fresh Flavors from KeralaThe Kerala Kitchen: Recipes and Recollections from the Syrian Christians of South India (Hippocrene Cookbook Library)Curried Favors: Family Recipes from South IndiaKerala Society: Saint Thomas Christians, Syrian Malabar Nasrani, Bunt, Malayali, Ezhava, History of the Saint Thomas Christians, Nambu

Kerala's passion for government jobs

The recent news that the Kerala Public Service Commission (KPSC) received over 12 lakh applications for its advertisement for vacancies in the lowest rank in government service, namely, the last-grade peon post, reveals a mindset of Malayalees that seems to be pretty much fixed – globalisation, liberalisation, industrialisation, whatever.

The average Keralite – and surprisingly enough, a great portion of the youth of the State, supposedly disdainful of sarkari jobs in favour of more glamorous positions in new-fangled sectors like information technology (IT) – seems to still favour government jobs over those in the private sector.

And this, at a time when the State government is working overtime to promote Kerala as a favoured IT destination. Witness the recent brouhaha over the proposal to set up Technocity, an integrated complex of IT infrastructure, residential apartments, shopping malls, hospitals, hotels, educational institutions and other support facilities, a satellite adjacent to Thiruvananthapuram, the State capital and home to Technopark, Kerala's pioneering IT park. Billed as the largest IT township in India, the Technocity, the mega-project envisages an investment of over Rs 6,000 crore and is expected to provide direct employment to over one lakh persons and indirect jobs for another four lakh.

And yet, the recent KPSC advertisement managed to woo 12,31,499 applicants. According to a report by K P M Basheer in The Hindu, this is the largest number of applications the KPSC has ever received for a job advertisement. Not surprisingly, Thiruvananthapuram district – the quintessential abode of Kerala's babudom – produced nearly 1.75 lakh applicants; followed by Kozhikode (1.25 lakh) and Ernakulam (about 1.11 lakh). Behind them came Wayanad (35,000) and Kasaragod (40,000).

According to The Hindu report, the total number of applicants for the KPSC advertisement is roughly four per cent of Kerala's population. “If you consider the fact that the applicants are in the 18-40 age group, more than 10 per cent of the young population in the State have applied for the lowly peon's position, which is a relic of the British Raj,” writes Basheer.

And even more ironically, most of the applicants are overqualified. While the minimum educational qualification for the job advertised is the ability to read and write Malayalam, the majority of applicants are those who boast college and professional degrees; there are even some M Phil and Ph D researchers. According to the 2001 population census, 63.4 per cent of Kerala's population was in the age group of 15-59, who make up the labour force. The labour force projected for 2011 is 237.30 lakh. Keralites comprise 2.6 per of the country's total labour force.

Of Kerala's labour force of 102.91 lakh workers, 16.54 lakhare agricultural labourers and 3.65 lakhwork in household industries. The organised public and private sector together employ 11.33 lakh persons, with the private sector accounting for 46.33 per cent of the employment in the organised sector.

According to the Kerala State Planning Board, of the total of 6.07 lakh employed in the public sector during December 2008, 0.63 lakh were Central government employees, 2.66 lakh State government employees, 2.56 lakh quasi-government employees and 0.26 lakh local government employees.

According to the Kerala State Planning Board's Economic Review 2009, an analysis of the sector-wise growth of employment in public and private establishments in Kerala in 2009 revealed that the highest employment is in the community, social and personnel services (44.11 per cent), followed by manufacturing (23.24), financing and business services (9.02), transport (8.51), agriculture (7.03), electricity, gas, water and sanitary services (2.45), construction (1.9) and mining and quarrying (0.436).

If the recent deluge of applications for the peon's post indicates anything, it is that in the average Keralite's mind, there is still a special place for the hallowed government job. Not only does it offer assured security of tenure and attendant perks like pensions and travel allowances (not to mention the leisure time to pursue other interests !), it is also a source for securing loans from financial institutions and employee's co-operative societies.

It seems like all the ballyhoo of “new economy” and IT jobs has not made any significant dent in the Malayalee's penchant for a safe and secure government job.