vol tion o the ndian        onom       3.11
     to sell their products in the market due to the lower supposed to put such jobs at the disposal of the
     purchasing power of the consumers. Perhaps, that      goverment which could have been distributed
     is why again the responsibility of developing the     along the decided reservation policy—such
     basic industries was taken up by the government.      reservations were considered an economic tool for
          Out of the six basic industries, the cement      social change.
     industry had some strength in the private sector,          In the highly capital-intensive sectors in
     while in the iron and steel industry a lone private   which the government companies were going to
     company was present. The coal industry was            enter, managing investible funds to set them up
     controlled by the private sector and crude oil        was not going to be an easy task. The government
     and refining was just a beginning by then. The        did manage the funds with sources like taxation,
     level of demands of an industrialising India was      internal and external borrowing and even taking
     never to be met by the existing strength of the       last refuge in the printing of fresh currencies. The
     basic industries. Neither the required level of       government went to justify the high taxation and
     expansion in them was possible by the existing        heavy public indebtness in supplying employment
     number of private players. With no choice left,       to the Indian employable population.
     the government decided to play the main role in            The PSUs were considered by the government
     industrialising the country. In many of them we       as the focus of the ‘trickle-down effect’. The
     as a result, see a natural monopoly for the PSUs,     government did everything to set up and run the
     again.                                                PSUs as the benefits were supposed to percolate
                                                           to the masses, finally reinforcing growth and
     3. Employment Generation
                                                           development in the country. Employment in the
     The PSUs were also seen as an important part of the   PSUs was seen as the effort of the trickle down
     employment generation strategy. A government in       theory, simply said. At a point of time, Nehru even
     a democratic set up cannot think only economics,      mentioned the PSUs as the ‘temples of modern
     but it has to realise the socio-political dimensions  India’. The government went to commit even a
     of the nation too. The country was faced with the     job in every household via the PSUs—without
     serious problem of poverty and the workforce was      calculating the dimensions of the future labour
     increasing at a fast rate. Giving employment to       force in the country and the required resources to
     the poor people is a time-tested tool of poverty      create jobs at such a high scale. But the government
     alleviation. The PSUs were thought to create          went on creating new PSUs without analysing the
     enough jobs for the employable workforce of the       fiscal repercussions—moreover believing them
     economy.                                              to be the real engine of equitable growth. The
          There was also felt an immediacy for a social    employment generation responsibility of the PSUs
     change in the country. The poverty of a greater       was extended to such an extent by the government
     section of the country was somehow connected          that most of them had over-supply of the labour
     to the age-old caste system which propitiated the     force which started draining its profits on account
     stronghold of the upper castes on the ownership       of salaries, wages, pensions and provident funds
     of land, which was the only means of income and       (the latter two had late financial impact).
     livelihood for almost above 80 per cent of the
                                                           4. Profit and Development of the Social Sector
     population. Along with the ambitious policy of
     land reforms, the government decided to provide       The investment to be made by the government
     reservations to the weaker sections of the society    in PSUs was in the nature of asset creation and
     in government jobs. The upcoming PSUs were            these entities were to be involved in production