In 1970, the Government started a populist program under the influence of Socialism. It had started the nationalization of businesses. It had with one stroke of ordinance detached the soul of business with its body by nationalization Banks, Insurance, Coal Mines and whatever came in its way of populism. There was no economic consideration, and unfortunately, there was no concern for the welfare of the society either. The decisions were solely to gain on political mileage, to pocket poor people’s vote by showing them a circus of socialism, that was not to provide them bread or employment.
Smt. Indira Gandhi, the Prime Minister nationalized banks, coal mines and putting more restrictive controls. By doing this, the growth of the economy got suffocated and unfortunately, corruption in high offices also got into place and became an accepted norm.
There was a tone of accusational social exploitation on the business community, they were termed as greedy persons amassing wealth for themselves and acting as villains to the poverty eradication program of the Government. The word Profit had become a dirty word and the Government was advocating for nationalizing and imposing strict controls for the sake of social welfare and generation of more employment.
The gainers were bureaucrats and the politicians by enjoying fringe benefits from those nationalized businesses. In order to milk those cows, they assured the employees of their job security and pay packets even they don’t do their best, and thus burdening Businesses to a state of irrecoverable sinking cost to the society.
Businessmen lost their businesses, nurtured and built brick by brick with great efforts and national sentiments. Growing and profitable Businesses were taken away from Businessmen, not for better management or for producing better values, but for the sake of socialism and political populism. The Nationalized businesses had even given the least priority to productivity and quality, what to say of innovation and updating its technologies.
Furthermore, the monopolistic market position and non – accountability of management and employees created a total mess within the businesses as well in the market. For every product, whether it was steel, cement, paper, sugar and anything important for living and doing business, there was a restriction and control for production, trading and consumption. There was a full-fledge quota and black market Raaj in all business spheres. The erstwhile businessman became a hoarder and black marketer. The spirited entrepreneur was forced to become a fixer and pusher of licenses in the Govt. citadel.
The Government undeterred by its populist ‘’socialism’’ got into the business of putting controls on business, rather than doing business. To check the concentration of economic power, the Government had abolished the Managing Agency System and introduced MRTP Act. By doing this, the business houses got a threat of losing control on Group companies; so a new system was devised by floating nos. of investment companies to hold the ownership in a pyramid manner. That one could only generate a lot of paperwork for company secretarial consultants, stockbrokers, and tax consultants. The Business became no longer a human activity, rather it became a playground for cat and mouse play, and shrewd tactic of circumventing laws and contained a black chapter on democracy of emergency clamp by the government in 1975.
The great Indian Elephant was got chained and gagged by its own independent government. During the 1940s and 1950s, when the other developing countries, which had also emerged as independent and sovereign countries in the 1940s and 1950s, were making consistent economical progress, India was only busy in restricting and controlling its people.
In the process, old companies were deserted causing huge losses in cotton, jute, and other traditional companies becoming sick since their funds were siphoned off into diversified activities and for NRI capital. The funds even got out of the country. The age-old traditional relations and linkage got out loosened and started coming to cities for new jobs and gradually a new economic order of the middle class emerged, which was semi-urban and semi-rural.
Businesses in India are employing at least twice as many managers and professionals as do similar jobs in the west. People have spent their working lives as paper pushers- writing regulations or endless reports or negotiating with the ministry and the central planners about quotas, production targets, plan allocation and sanctions. Moreover, they have to make their career as ‘fixers’; chasing files and bosses for transfers, promotions, or even answering various show causes and departmental inquiries. The skill needed to make a business perform is not required in socialism, what is required are agitation and not administration.
Infinitely more difficult also infinitely more critical will is the needed revolution in the managerial culture of Indian bureaucracy. No one is in the habit of understanding the real position and report to his higher-ups or take decisions himself, with true grits and honesty, in the interest of the common man. They hold an endless meetings on a heap of files and documents, which the huge ‘British Raj’ nostalgic system churns out and still decisions and actions are delayed or deferred at the minutest behest. The way our republic has worked and survived is almost unimaginable and inconceivable by outsiders, even by our own non-resident Indians.
The role of the Government has also been defined and categorically placed in Indian Society. The role assigned to Kshatriyas in the Varna system is running and administering the government. It should be guided by the wisdom and laws framed by the judiciary and scholars used these for the welfare of the masses and to ensure discipline in society.
The style of foreign rule of Mughals and British had a significant effect on the role of Government. With it, the psyche of the Indian society pr remained neutral towards the changes in the approach of the government. The Indian society was still being lead by the varna system and the doctrine ‘’Yato Raja Tato Praja’’, which means the people are the same as the King.
An elderly and respected by all Ministers while suggesting to amend wrong state policies, reminded his King of the Royal Place having a pond full of milk contributed by all and sundry in its courtyard, as a symbol of people-friendly policies during his forefather’s regime, which did no longer exist because of his wrong policies. The King told the Minister that he could do the same thing once again overnight.
The King issued a fiat to the effect that every citizen of his Kingdom would be pouring one pot of milk in the night so that by the next morning the pond should be full of milk. The servant of the King took one pot full of milk and was about to pour it into the pond the King stopped him and ordered him to pour one pot of water instead. ‘Why should I pour water nobody could find out my contribution.’ – He quipped.
The next morning the king was shocked to see that pond was full of waste and effluents. Like him everybody in his kingdom thought that others would be putting milk and what happens if he poured water in the pond; he will save his share of milk.
Therefore, it is very essential for an administrator to have honest and sincere aptitude regarding public welfare and the common good.