Does BSNL exist only for employees’ sake

The employees’ union of Bharat Sanchar Nigam Limited (BSNL) have threatened to go on an indefinite strike if their demands are not met. The action taken by these employees has raised certain pertinent questions regarding the role of BSNL in India and more importantly, the larger role of public sector undertakings in the country.

One must understand that ever since India became independent there has been the policy and practice of mixed economy as the infrastructure in those days was underdeveloped. Even today it is not in a very good state. However, efforts have been made over the decades to better infrastructure. Telecommunication is one aspect of infrastructure which has seen rapid technological advancements. Revolutionary changes in telecommunication have been made available to the masses. With changes in public policy related to telecommunication, private companies too have played a major role in making services accessible to the people at competitive rates.

The major role of the public sector is to strengthen a country’s framework and provide skeletal support to all kinds of services but, this has to be fleshed out by the private sector and it is very difficult to defend the survival of the public sector at the cost of growing private businesses. The public sector is needed in areas where geographically it is not possible for the private sector to perform. In this regard, it becomes the duty of the public sector — since it is state-owned — to reach out to the people in these places as well as in areas where services are not commercially viable and out of the private sector’s list of objectives.

Now, this has been the role of telecommunication company BSNL, and state-owned airlines Air India. Both the entities have not been doing well financially and have been seen as a major burden on the state exchequer. The financial burden could have been taken care of had there been no other service provider, which, fortunately is not the case and there is no dearth of private sector companies willing to provide services even in remote areas. Not to forget, there are regulatory measures put down by the legislature and the executive that compel private firms to provide services in remote areas.

In such a situation, it does not make any sense for a public sector company like BSNL to continue providing services and also threaten the country with indefinite strike. There has to be a balance between the public sector and the private sector and one must realise that the public sector does not exist for the sake of the employees. A public sector entity exists only to provide services to the people and if technologically or commercially or for any other reason, this can be done as well or any better by the private sector, there is no need for the public sector to exist. There is no moral high-ground here.

There can, at times, be an essential role to be played by the state enterprises in times of distress and disaster management. In that light, it is really wise for the country to maintain certain services but, only in a small measure. In such trying situations, the basic network and framework created by the public sector can be utilised along with taking control of the private enterprise, which the administrative and constitutional law permits in situations of extreme national emergency and importance.

Policy formulation ought to provide a level playing field to both private and public entities. However, the public sector has to be pruned according to the changing times. BSNL, Air India, ITDC hotels, and so on are in the “fast extinction” category. The state need not save them on the lines of “save tiger” campaign. Let them die a natural death, without pumping in oxygen. Withdraw the life-support system.

The author is a professor at IIM-A, 
akagarwal@iima.ac.in