The Hindu Business Line : A downsizing dream

THE PROPOSAL OF the Standing Committee of Parliament on Industry for consolidating the Ministries of Coal and Mines, Oil and Petroleum, and Steel under one composite ministry may appear, on the face of it, revolutionary. But on closer reflection, it is clear that this is not so. The proposal now mooted by the Committee merely takes the administrative arrangement back to the one prevailing until 1962. Between 1957 and 1962, as the Expenditure Reforms Commission had noted, a composite ministry handled all policy and operations issues in the steel, mines and fuel industries. That, over the years, it was hived of into smaller and, hence, more homogenous islands of ministerial responsibility is an unfortunate facet of bureaucratic expansion of public administration in the country. This is no doubt due largely to India adopting a policy of an enhanced and intrusive role for the state in economic development.

But now, as the Standing Committee has rightly pointed out, the scope for state intervention is considerably reduced. The market decides issues of product pricing, industry structure and growth strategies, leaving little need for a hydra-headed administrative apparatus of governance. If the constituents of a competitive and privatised oil industry are themselves best equipped to decide on the strategies that each one should adopt for promoting growth and improved profitability, there is very little for the Government to do in such a situation. Similarly, if a globally integrated market is going to determine the demand supply-equations in the steel industry there is no need for bureaucratic intervention in pricing or product allocation as the joint plant committee of the steel industry was engaged in doing at one time.

Viewed thus, one cannot fault the rationale behind the Committee's recommendation for a merger of these administrative functions. But it is difficult to see the proposal being taken to its logical conclusion. If the policy environment then prevailing gave the initial impetus to the proliferation of ministerial responsibilities, the phenomenon drew its sustenance from a situation in which the leader of a ruling combine had to accommodate the vaulting ministerial ambitions of a growing number of senior politicians. The political realities in a parliamentary system of governance are unlikely to change any time soon.

Added to this, the senior bureaucracy is not likely to look with favour on any attempt by the political class to trim career opportunities in the higher echelons of administration — inevitable in any proposal of downsizing, such as the present one — and so they can be counted upon to stymie the process. It is more than two years since the expenditure reforms commission made a similar proposal and it is still doing the rounds of various ministries with little, if any, progress. Unless there is a strong leader with a deep and abiding conviction about the necessity for cutting administrative flab and a popular mandate to go with it, recommendations such as this would remain merely on paper.