ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Working of State-Level Manufacturing Public Enterprises-Promise and Performance

Public Enterprises Promise and Performance T L Sankar R K Mishra R Nandagopal The manufacturing State-level public enterprises are operating in vital areas of the economy. Their efficiency and effective working would strengthen not only their functioning but also the effectiveness of State governments as a whole. However, these enterprises suffer from many infirmities which call for suitable policy and operational reforms not merely at the State level but also at the enterprise level in each State. The structural reforms suggested in the paper could go a long way in helping them turn the corner MANUFACTURING enterprises arc a very fascinating area to study in the domain of the State-level public enterprises (SLPEs). With the direct involvement of the various State governments in the industrialisation process of the country, such enterprises are being set up in increasing numbers by every State. The budget allocations provided for equity support for these enterprises have registered a phenomenal growth. However, their working has become a matter of great concern to policy-makers in view of the non- fulfilment of their objectives to a large extent. An intensive study is required to dissect this phenomenon and to suggest measures for the turn-around of the manufacturing SLPEs. We propose to investigate in this paper the genesis, growth, objectives, investment, financing, physical and financial performance, and problems of these enterprises. The information contained in the paper has been collected from the data base on the SLPEs set up by the Planning Commission and the Ninth finance Commission at the Institute of Public Enterprise, GENESIS, GROWTH AND OBJECTIVES The manufacturing SLPEs have a long history of working to their credit. Even before independence the princely states of Travancore and Mysore had set up rubber, soap and oil factories and encouraged sericulture. The success of this direct intervention encouraged the princely States of Rajaputana, Jammu and Kashmir, Vijayanagaram and Hyderabad to set up more and more of such units. After independence and with the onset of the planned era it became obligatory on the States forming the Indian Union to participate in industrial reformation and restructuring. Many States as a result of this deliberate policy started setting up manufacturing units in the middle of the 1960s, Between 1955 and 1965, 180 manufacturing SLPEs were set up by the various States. The period 1965 to 1980 saw a great spurt in the number of and investment in these enterprises. It was in this period that the base of such units was widely diversified from soaps, detergents, sericulture, paper, mining, cement and sugar units to light and heavy engineering, steel and scooters. Many such units were set up by the Industrial Development Corporations (IDCs) in Andhra Pradesh, Gujarat, Tamil Nadu, Maharashtra and Haryana to produce steel, paper, scooters and engineering items. It was during this period that the States in the north-east set up manufacturing enterprises to exploit the agro and forest based local resources while States such as Uttar Pradesh and Maharashtra started cement, fertiliser, textiles and sugar units as a part and parcel of their area development programmes. The 1980s were a decade of consolidation for these industries. During this period, manufacturing SLPEs have come up in the area of electronics, drugs and phar maceuticals, telecommunications, beverages and computers. The takeover of sick units has also added to the portfolio of PEs in this decade as many State governments decided on socio-economic grounds on the acquisition of such units from the private sector. These units mostly include textile, tea, chemical and engineering enterprises taken over by the West Bengal, Maharashtra, Gujarat, Kerala and Tamil Nadu State governments.

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