Social Scientist. v 17, no. 198-99 (Nov-Dec 1989) p. 30.

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Rationalizing Losses in the Indian Coal Industry:

A Revaluation of Relative Responsibilities

At least one incontrovertible fact about the public sector in India has been its inability to generate an adequate quantum of redeployable surpluses. Despite the ever-growing magnitude of public investment, it continues to lie deeply and irretrievably enmeshed in a state of acute unviability. The coal industry is typically representative of this situation, with the trends being particularly discernible since nationalisation. As such, it has been the constant endeavour of researchers and industry experts to enquire into the causes of its constantly accumulating losses, one major consequence of which has been the spiralling of coal prices. Not only does coal, as a domestic, fcommodity, still remain beyond the reach of the majority; the prices of most other commodities, many of them common consumption items, have been rising steadily and uncontrollably on the plea of rising fuel costs—despite the fact that the state has been making the input available to industry at prices unable to cover its own costs of production. Such indirect subsidies have managed to result in a redistribution of incomes in a manner quite obviously opposed to the proclaimed socialistic goals.

It is a commonly accepted argument that the aspect of social responsibility as implied by the programme of nationalisation, has prevented economically viable operation of the industry. The two major dimensions of this social responsibility, in this context, have been for one, the continuous upward revision of wages, which has directly added to the cost of production;, there has been the emergence of an allegedly arrogant labour class—its 'arrogance' being fanned by the substantial wage gains and the security of service effected by the programme of nationalisation on the one hand, and a rather misplaced political consciousness on the other. The latter has been particularly manifest in the loss of mandays, through strikes1 and other forms of labour unrest, while the former has generally encouraged labour absenteeism, both affecting in conjunction, the effective labour supply and the intensity of work contributed by each individual

* Department of Economics, Jadhavpur University, West Bengal.

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