Cause of Sickness

Data on sick industrial units assisted by Banks in the country, is compiled by Reserve Bank of India. According to the RBI report, numbers of causes, both internal and external, often operating in combination have been responsible for industrial sickness. The main causes include deficiencies in planning, Management, marketing etc. The RBI report mentions change in Government policy as one of the external factors. Interestingly, as per RBI data only, 3% of the causes for industrial sickness is attributable to labour unrest.

Work Culture

In the above context, it is high time that the oft-repeated term of "Work culture" which is, I am afraid, being used quite loosely specially in the context of West Bengal, is rationally analysed. For those to whom the work culture means the work ethics or pattern of work of only the workers in an industry, the cause of industrial sickness is attributable to lack of this work culture particularly in West Bengal and sometimes in public sector as a whole. In this connection, it is interesting to go through the Board of Industrial & Financial REconstruction BIFR’s performance review for 1997-98 on the sick industrial units, which says,

"Of the 2145 companies registered with Board since 1987 till March 31, 1998, 660 companies were from Western India, 639 companies from the South, 532 from the North and 314 from the East." (Economic Times Ahmedabad dt. 08/10/98)

If you read West Bengal newspapers, probably this will not be believable. Incidentally, small scale companies are not registered with BIFR and the latest break-up is not available. The figures as available for all types of sick industrial units at the end of March, 1995 show 50,724 sick units in West Bengal, and 36,159 in Uttar Pradesh. BIFR performance review also indicates that Textiles and Metallurgical sectors account for 30% of all cases. Hence a question arises. Is the sickness zone-specific, industry-specifica or work culture-specific? Whether bad work culture as is being propagated from the roof top in many quarters, is the main cause of industrial sickness and West Bengal can be treated as an ideal example? Had it been so, then what is the answer to the widespread sickness of textile units in U.P., Gujarat and Maharastra? If sickness of public sector is attributable to bad work culture, then how is it that apart from sick public sectors, lakhs of private sector units are sick all through the country? If ownership is the only criteria for a good work culture and resultant healthy industries, why then blue chip companies like IISCO, Jessop, Braithwaite, Burn, Elgin Mills (UP) and Richards & Crudas (Maharashtra) etc. had become sick and had to be nationalised. As a matter of fact, 40% of the present sick public sector units were originally private sector units, which had to be nationalised because of the sickness caused by the administrative and financial mis-management including siphoning of funds. The case of Dunlop is the glaring example before us. After showing a comfortable profit in 1996-97, the company enlisted itself as a sick company in BIFR sequel to some reported manipulation of balancesheet figures. The Department of Company Affairs, Govt. of India, have approached the Company Law Board with the Inspection Report showing diversion of funds, making a healthy company sick on the paper. If ownership and location are the factors, Haldia Refinery and NTPC; Farakka or Kolaghat Power Plant, all in West Bengal to cite a few, apart from the companies like BHEL, ONGC, HAL etc. in public sector could not have performed so well so far.

MOTIVATED CAMPAIGN

Motivated Campaign : The genuine reasons for sickness of industries are technological obsolescence, lack of planning, timely modernisation, loss of market and over and above the work culture, which comprise good corporate culture, good management culture and of course, committed workers led by a responsible Trade Union. The work culture, therefore, cannot be talked in isolation of workers leaving aside the corporate and management practices. What has happened to the jute sector in West Bengal? It is an example of corporate culture of the worst kind. The engineering and jute sectors were the main areas where West Bengal stood in the fore front in the country after independence. The succeeding Indian Corporates sucked out every bit of the profit from the industry without investing anything for technological upgradation or modernisation of the units. Traders without any industrial experience of any kind came in the jute industry and brought the situation to where it is now. In an all India scenario, in the textile sector, similar things have happened and when companies became sick, it is not only West Bengal but in Gujrat and Maharashtra also, militant trade unionism and bad work culture were made the main scapegoats. In the case of West Bengal, after 70s since the Left Front, backed by workers, came to power, this became political weapon to deprive West Bengal its original share in the new investments in the country. Unfortunately, the local Press had become an willful instrument for this purpose and remains to be the same even now. To cite a recent example, in the last week of September ’98, there was a week-long strike in the Hazira Plant of Kribhco. During the strike, number of officials were physically beaten by the striking employees in presence of Gujrat Police. The strike was settled after 7 days after acceeding to the workers’ demands. This happens in industry. But, look at the contrast. How an incident of reported physical mishandling in Bata became an all-India news, more or less during the same period, thanks to the motivated campaign by the Press and some other vested interests.

INDUSTRIAL CULTURE: Professional Management & Workers' Participation

It is widely recognised that the feudal traditions still play a major role in the day-to-day management of Indian companies. In a modern management, sharing of information with workers and transparency of information are supposed to be basic for good ingradicats industrial relations. In the Indian context, barring a few good companies, both in private and public sector, average Managers still have a feudal and not professional approach. They are not inclined to recognise participation of workers in Management through organised Trade Unions. That is why, the focal point of corporate thinking about the good work culture actually means a "shop floor without union" commensurate with "job less growth". If a good work culture means a work spot without Trade Union, our answer is no. If a good work culture means a good INDUSTRIAL CULTURE, of responsible owners, management and workers for a commonly shared objective of the growth of industry, we will always say yes. One recognised Trade Union in a factory, professional management participation of workers in Management for a targetted growth not only in financial terms but also in terms of technology upgradation and a long-term corporate planning with transparency of information sharing at all levels, can lead to healthy industry avoiding sickness and inculcating, I repeat, a good industrial culture for an industralised nation.