My elder son, Jhupa, was about 15 months old and the younger one, Chupa was just a year old. My wife had terrible time dealing with the pangs of growth of the little ones. So, I though if I could give her some relief. I had a meeting with Dr. Guha, the economist on deputation from the Indian Economic Service to the Central Mine Planning and Design Institute at Ranchi. A train would take me at around 8 PM from Kolkata (Howrah Railway Station) to reach Ranchi around 7 AM next morning. I took Jhupa along with me: he had his cereal mixed milk at night and slept comfortably beside in the First Class Air Conditioned Coupe. I dropped him at my relative's residence for the day and went to the meeting. After two day's meeting, we returned on the fourth night back to Kolkata. He enjoyed the trip. We had another such trip (free for children below the age of three), but we missed the train on the onward journey for the third trip. He was unwilling to get down from the cab to enter home: he was extremely disappointed. This was the only time I had missed boarding a train because the train departure time was advanced by two hours in the winter season and I was not aware.
I was already aware that the Government was still pegging coal prices below the cost of production. What was surprising is that by pegging coal prices below cost of production, Government India encouraged unscientific and unsafe mining leading to loss of precious coal reserves and corruption. This socialist technique was further consolidated by Mrs. Indira Gandhi by coal nationalisation. Coal price and distribution continued to be controlled by the socialist brained Government: safety improved, modern methods of capital intensive long wall mining and opencast mining was introduced at a rapid pace, coal workers were now together to bargain better leading to galloping rise in wages and benefits. Coal India's cost of production soared. But Government kept the prices of coal below cost of production, bearing the losses of the coal companies and the burden of rising capital expenditure on coal capacity expansion. Experts Committees were formed to recommend price revisions: one would have had to read those Committee reports to believe that such poor quality reports could be prepared for signature by esteemed economists - clearly the coal department must have been staffed by the less brilliant material from the administrati8ve services. Four decades later, India is currently in need to import both coking and non-coking coal.
In the late 1970s and early 1980s, we had argued for a more rational, long-term coal pricing policy. Many notes were prepared and sent to the Government with little effect. When I remarked that these efforts that we were making were sheer wastage, Mr. Nagar, the Executive Secretary to the Chairman consoled me that at a later date in future the value of these notes would be realized. I knew it would be too late then.
Lt. General Grewal of course had another concern at the same time. He pointed out that increase in coal prices to cover cost of production, however desirable would increase the cost of production of coal itself. I understood his point in terms of the inter-industry flow of materials that we learned through the Leontief Input Output Models. I had learnt that the Planning Commission in its attempt to check consistency of the five year plan material balances used some less than 100 by less than 100 industry models. But I did not ever come across evidence of the use of such models for pricing policies. But Chairman Grewal's point was valid. Coal goes as input for both electricity generation and steel making. A rise in coal prices would increase the cost of electricity generation and steel making. This will lead to rise in prices of electricity and steel both of which are needed in huge quantities to extract coal and hence coal costs would rise. The coefficients were known and it would have been rather easy to calculate approximately the impact of letting coal, steel and electricity prices to work themselves out through their inter-linkages. Indian policy makers however were not comfortable dealing with such quantitative analysis in the 1970s or 1980s.
One implication of Chairman's concern over the above price linkages was that each of these sectors conserved energy and materials use to save on costs on a continuous basis. Mr. R.C. Shekhar, the then Director Finance of Coal India was very affectionate to me: he asked me to present a paper on Energy Conservation at the Annual Conference of the Society of Internal Auditors in Kolkata. I had access to various news bulletin and journals on energy conservation published in the UK and the USA. Remember energy conservation had become a priority after the two successive petroleum oil price shocks of 1971 and 1977. I presented a paper on energy conservation and energy audit and Mr. Shekhar liked it enough to refer to me as his protégé in after my presentation at the Conference.
But despite all efforts, we could not produce an empirically valid cost function for coal. Part of the reason was that our team consisted mostly of cost accountants and charted accountants who were more comfortable in computing and allocating costs rather that allow cost observations to throw up a cost function. It was unfortunate that despite having recruited an econometrician in me, they failed to estimate a cost function that had sttistically significant regression coefficients and R square. In retrospect, I knew the reason why I could not contribute to make the project a success. There was no data analysis and validation before mounting on a main frame computer to obtain regression results. The computer time was hired from outside agency. The modelling did not take into account mines of different types: open cast, inclines and shafts or their vintages with proportion of development workings and actual coaf face extraction using different technologies. Nor, was the objectve of estimating a cost function was clear. When I arrived at Coal India, they were already having the comoputer results and I was consulted if the results were acceptable. Those days there were no dek computers available to play with various models and the data. I could provide them very little help except commenting that the results were not statistically acceptable and the possible reasons why the regression results were different from what they had expected. Besides, my knowldge of econometrics was already dated - I was not aware of the advances in econometrics that had taken place in the previous seven/ eight years.
Monday, August 1, 2011
Learning From Observing Colleagues: My Unfolding Voyage 075
In the late 1970s and 1980s, Coal India was still an organization trying to integrate a wide variety of work cultures and management styles reflected in diverse groups of miners, workmen, office employees, managers, engineers of various disciplines, geologists, doctors, accountants and others who got into a single umbrella due to nationalization: the nearly six lakh manpower of Coal India had come from a large number of relatively small and medium coal mining companies, largely in the private sector. And, there was the large number of new recruits in various engineering and professional disciplines that Coal India recruited in the first few years. It must have been a huge challenge to the Chairman Lt. General Grewal and his successor Chairmen.
The managers who came from private enterprises did not like each other because they had all been reduced to the same category with the special images that some of them enjoyed being part of a foreigner owned business group with special privileges and compensation. As a group, they also disliked the importance the erstwhile public sector NCDC managers enjoyed because they were more conversant with the public sector culture the new Coal India had to adopt. Almost all top and senior managers had very little exposure to management functions at the higher levels of an efficient corporate bureaucracy that a large organization like Coal India had to develop. Many of the senior and top managers were now in the headquarters of the holding company and subsidiary company headquarters to work on strategies, business plans, management development, accounting integration, technological up gradation and marketing plans, monitoring the execution of the strategies and plans, and provide analytical inputs for Board-level decision -making. Many of them felt fish out of water having lost the great kingdoms they enjoyed in the far-flung collieries with their bungalows, clubs and cars. Those who remained in the coalfields found their colleagues at the headquarters intrusive and wasting their valuable time in meetings, telephone calls and visits.
This is an environment that gives birth to funny behaviorial patterns, good for keen observers to pick up and entertain colleagues over lunch and tea breaks and at evening get together. I was fortunate to have some of these keen observers as my close friends: one of them was a mining engineer about six / seven years elder to me and another colleague of my age, a brilliant M.Sc Statistics who had a variety of interests and expert in caricature. Some of the interesting episodes they and some other colleagues shared with me are worth sharing on the blog to give a flavour of those days.
A Chairman and Managing Director, Mr. X of a subsidiary had gone on tour to the coalfields. On return to his headquarters, two days later, he found that his Chair has been occupied another person Y who showed him the copies of X's appointment letter and the transfer order served on X.
A Chief General Manager went with his tem to make a presentation to the Chairman & Managing Director. The Chairman criticized him left and right in the presence of his team during the presentation. He kept saying sorry to the boss and at the end when he went back to his own office, he consoled his team. "Do not get upset my boys. Everyday does not go the same way. This was one of those few bad days. We can hope for better days in the future." He had no regrets in his face.
Mr. E, an excavation engineer developed his own style of getting successive promotion every four years by adopting what was referred to as Udipi Strategy by his colleagues. One year before the promotion interviews were due, Mr. E would activate himself and get involved in various kinds f work tat were discussed and monitored by the bosses meetings. He would be able t please the bosses with his hard work, specially his presence around whenever the bosses needed some assistance. He would get good reports and clear the promotion interview with ease. Soon after promotion and generally a posting at a different police, he would suddenly feign incompetence and slow. Bosses would scold him for non-performance but with a smiling face he would promise to rectify errors and do the same work fast again. Frustrated the bosses will tell." are you a dullard? An ass?” With smile he would respond " Yes, Sir.” He would always respond with "Yes, Sir”. Even if he had been asked to keep mum. The bosses would soon stop giving him and involving him in any work. He would spend the next two and a half years without ay work or interaction with the bosses and then he would resurface into activity to prepare grounds for his next promotion.
Coal India subsidiaries used to recruit assistant in large numbers after a gap of two years or so. These were supposed to graduate assistants. One candidate could not answer any question the interviewer asked. So, finally they asked who India’s Prime Minister was." He pleaded ignorance. He was given a clue: the Prime Minister was a woman. He replied, Mrs. Nandini Satpathy", Nandini was a Chief Minister of Orissa a few years back and this candidate did not know the name of Mrs. Indira Gandhi! Another candidate who turned up one day after the day of scheduled interview explained that he could not come the previous day as the local buses went on strike and added that the passengers also protested against that strike by not paying the bus fare on the next day when the buses started plying again!
The list of selected candidates would run into four/ five pages. Even after the Selection Committees had finalized and authenticated the lists, names of some candidates would be deleted and some others added by replacing the pages other than the first and last ones.
Then, there was one on one of my bosses when he was still a manager of a colliery. He had gone down the shaft around 10 AM on his daily inspection of the coal faces where miners were extracting coal. There was some special problem somewhere and he had to solve the problem with the assistance of his colleagues. Message was sent down to him from the pit head that his wife was enquiring about his delay in coming back home for lunch. He sent message that he would return in thirty minutes. Wife sent message again at 12-30. A similar reply was sent by him from the underground to the pit head. This went on for another two half hour intervals. When the fifth message arrived from his wife at2 PM, he sent baclk a message: "Salee ko bata doe aaj lunch off: tong na koray" (tell the sisterin-law not to harras me any longer as I will skip lunch today). Refering to wife as sister in-law!
The managers who came from private enterprises did not like each other because they had all been reduced to the same category with the special images that some of them enjoyed being part of a foreigner owned business group with special privileges and compensation. As a group, they also disliked the importance the erstwhile public sector NCDC managers enjoyed because they were more conversant with the public sector culture the new Coal India had to adopt. Almost all top and senior managers had very little exposure to management functions at the higher levels of an efficient corporate bureaucracy that a large organization like Coal India had to develop. Many of the senior and top managers were now in the headquarters of the holding company and subsidiary company headquarters to work on strategies, business plans, management development, accounting integration, technological up gradation and marketing plans, monitoring the execution of the strategies and plans, and provide analytical inputs for Board-level decision -making. Many of them felt fish out of water having lost the great kingdoms they enjoyed in the far-flung collieries with their bungalows, clubs and cars. Those who remained in the coalfields found their colleagues at the headquarters intrusive and wasting their valuable time in meetings, telephone calls and visits.
This is an environment that gives birth to funny behaviorial patterns, good for keen observers to pick up and entertain colleagues over lunch and tea breaks and at evening get together. I was fortunate to have some of these keen observers as my close friends: one of them was a mining engineer about six / seven years elder to me and another colleague of my age, a brilliant M.Sc Statistics who had a variety of interests and expert in caricature. Some of the interesting episodes they and some other colleagues shared with me are worth sharing on the blog to give a flavour of those days.
A Chairman and Managing Director, Mr. X of a subsidiary had gone on tour to the coalfields. On return to his headquarters, two days later, he found that his Chair has been occupied another person Y who showed him the copies of X's appointment letter and the transfer order served on X.
A Chief General Manager went with his tem to make a presentation to the Chairman & Managing Director. The Chairman criticized him left and right in the presence of his team during the presentation. He kept saying sorry to the boss and at the end when he went back to his own office, he consoled his team. "Do not get upset my boys. Everyday does not go the same way. This was one of those few bad days. We can hope for better days in the future." He had no regrets in his face.
Mr. E, an excavation engineer developed his own style of getting successive promotion every four years by adopting what was referred to as Udipi Strategy by his colleagues. One year before the promotion interviews were due, Mr. E would activate himself and get involved in various kinds f work tat were discussed and monitored by the bosses meetings. He would be able t please the bosses with his hard work, specially his presence around whenever the bosses needed some assistance. He would get good reports and clear the promotion interview with ease. Soon after promotion and generally a posting at a different police, he would suddenly feign incompetence and slow. Bosses would scold him for non-performance but with a smiling face he would promise to rectify errors and do the same work fast again. Frustrated the bosses will tell." are you a dullard? An ass?” With smile he would respond " Yes, Sir.” He would always respond with "Yes, Sir”. Even if he had been asked to keep mum. The bosses would soon stop giving him and involving him in any work. He would spend the next two and a half years without ay work or interaction with the bosses and then he would resurface into activity to prepare grounds for his next promotion.
Coal India subsidiaries used to recruit assistant in large numbers after a gap of two years or so. These were supposed to graduate assistants. One candidate could not answer any question the interviewer asked. So, finally they asked who India’s Prime Minister was." He pleaded ignorance. He was given a clue: the Prime Minister was a woman. He replied, Mrs. Nandini Satpathy", Nandini was a Chief Minister of Orissa a few years back and this candidate did not know the name of Mrs. Indira Gandhi! Another candidate who turned up one day after the day of scheduled interview explained that he could not come the previous day as the local buses went on strike and added that the passengers also protested against that strike by not paying the bus fare on the next day when the buses started plying again!
The list of selected candidates would run into four/ five pages. Even after the Selection Committees had finalized and authenticated the lists, names of some candidates would be deleted and some others added by replacing the pages other than the first and last ones.
Then, there was one on one of my bosses when he was still a manager of a colliery. He had gone down the shaft around 10 AM on his daily inspection of the coal faces where miners were extracting coal. There was some special problem somewhere and he had to solve the problem with the assistance of his colleagues. Message was sent down to him from the pit head that his wife was enquiring about his delay in coming back home for lunch. He sent message that he would return in thirty minutes. Wife sent message again at 12-30. A similar reply was sent by him from the underground to the pit head. This went on for another two half hour intervals. When the fifth message arrived from his wife at2 PM, he sent baclk a message: "Salee ko bata doe aaj lunch off: tong na koray" (tell the sisterin-law not to harras me any longer as I will skip lunch today). Refering to wife as sister in-law!
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