Estimates Commi1tee 1960-61

, --

ESTIMATES COMMI1TEE 1960-61

HUNDRED AND FIFTH REPORT (SECOND LOK SABHA)

MINISTRY OF TRANSPORT AND COM.MUNICADONS (Department of CommDDicadoas) Action taken by Govenunent on the recommendations contained in the Eleventh Report of the Estimates Committee (Second Lok Sabha) on the Ministry of Transport and Communica- tions (Department of Communications)-Indian Telephone - Industries Ltd.

LOK SABHA SECRETARIAT NEW DELHI Janucay, 1961 Pausa, 1882- (Saia) Price Re. : 1"05 n. P. CORhIGENDA

Hundred and Fifth Repnrt ~f the Estimates Cl")mmittee (Sec~nd 10k Sabha).

Page 37, Cl")l. 3, 1 ine 11: E2r. II pRper II r.~ II pl"),~ er II Page 37, col. 4, last Ij ne: F'1r "national" read II n"t: i'1n81". Page 59, c')l. 1: E')r "32 1i read "82". Page 62, col. 5, line 10: F'r,r lI()n" reac I!')fll. FEIge 6~, c')l. 4, 1 ine 21: [21:. II the" :!:!23.1 "be" . CONTENTS

Composition of the Estimates Committee (iii) Introduction ('Y) I. Report I II. Recommendations that have been accepted by Government 3 ); III. Replies of the Govemment that have been accepted by the 31 , IV. ~=:~ the Government that have not been accepted by the I Committee . . 60 ,I V. Recommendations on which final replie! of Go'Yernment are still awaited 73 APPENDICES I. Copy of Letter No. I(14)-CL.VI/59, dated 16-4-1959 issued by the Ministry of Commerce and Industry (Deptt. of Co. Law Administration) 74 II. Chart showing the 'Y8lue of Production of I.T.I. Ltd. w-a-vis Ex- penditure 77 III. Copy of d.o. letter No. 15~-MI/58, dated 3rd/4th Aueust, 1958 from Shri Manubhai Shah, Minister of Industry, to Shri B.G. Mehta, Chairman E.C. (1958-59) 79 IV. Copy of O.M. No. 2(1)-P.C!59, dated 10-6-1959 from the Ministry of Finance (Project Coordination Cell) ...... 8 I V. Analysis of action taken by Government on the recommendationa COII- tained in the Eleventh Report of the E.C. (II Lok Sabha) . 83

1117 (Ail) Llt.-l. '. ESTIMATES· COMMITTBE 1960-61

CHAIRMAN Shri H. C. Dasappa

MJ!MBBM 2. Shri Premji R Assar 3. Shri C. R. Basappa 4. Shri Chandra Shankar ~. Shri Panna Lal· 6. Shri Shambu Charan Godsora 7. Shri H. C. Heda 8. Shri Yadav Narayan Jadhav 9. Shri D. A. Katti 10. Shri Khushwaqt Rai 11. Shri Bhausaheb Raosaheb Mahaiaonkar 12. Rani Manjula Devi 13. Shri Bibhuti Mishra 14. Shri G. S. Musafir 15. Shri M. Muthukrishnan 16. Shri K P. Kuttikrishnan Nair 17. Shri J agan." N ath Prasad Pahadia 18. Shri P. T. Thanu Pillai 19. Shri P. T. Punnoose 20. Shri Raghunath Singh 21. Shri T. Nagi Reddy 22. S~ri Vutukuru Rami Reddy 23. Sarrlar Amar Singh Saigal 24. Shri Satis Chandra Samanta 25. Shri Kailash Pati Sinha 26. Shri Tayappa Hari Sonavane 27. Shri Sunder Lal

·Elected w.e.f. 25th November, 1960 vice Shri Dlnesh SiOirh resigned.

"(ill) (iv) 28. Shri A. M. Tariq 29. Shri Mahavir Tyagi 30. Shri M. G. Uikey.

SECRETARIAT Shri A. K. Ray-Deputy Secretary. Shri M. C. Chaw-la-Under Secretary. INTRODUCTION

I, the Chairman of the Estimates Committee, having been authorised by the Committee, present this Hundred and Fifth Report of the Estimates Committee of the Second Lok Sabha on action taken by Government on the recommendations contained in the Eleventh Report of the Estimates Committee (Second Lok Sabha) on the Ministry of Transport and Communications (Deptt. of Communications)-Indian Telephone Industries Ltd.

2. The Eleventh Report of the Estimates Committee was presented to the Lok Sabha on the 23rd April, 1958. Government furnished their replies indicating action taken on the recommendations contained in this Report and other information required in this connection between the 8th March, 1960 and 9th November, 1960. The replies were examined by a Study Group of the Estimates Committee on the 9th September, 1960 and 21st December, 1960. 3. The Report has been divided into five Chapters: I-Report. II-Recommendations that have been accepted by Government. In-Replies of Government that have been accepted by the Committee. IV-Replies of Government that have not been accepted by the Committee. V-Recommendations on which final replies of Government are still awaited. 4. An analysis of action taken by Government on the recommendations contained in the Eleventh Report (Second Lok Sabha) is given at Appendix V. It would be observed therefrom that out of 83 recommendations in the Report, 53·6 per cent of the recommendations have been ~ccepted. Of the rest, the replies of Government in respect of 33: 1 per cent of the recommendations have been accepted by the Committee while those in respect of 13·3 per cent of the recommendations have not been accepted by the Committee.

NEW DELHI; H. C. DASAPPA, January 17, 1961 Chairman, Pausa 27, 1882 (Saka) Estimates Committee.

(v) "';q. I CHAPTEIl I REPORT Production In 1948, Government of India entered into an agreement with Mis. Automatic Telephone and Electric Company Limited, Liver- pool (U.K.), hereinafter referred to as A.T.E. for providing essential know-how and technical assistance for the purpose of establishing a Telephone Factory in India. Clause 13 of the Agreement provided inter alia for various payments to A. T .E. on account of patent rights, royalty, know-how and manufacturing data, and services of technicians and other experts to be made available by them to the Indian Telo- phone Industries Limited hereinafter referred to as I.T.!. It was contemplated that about Rs. 87 lakhs would be paid to A.T.E. during tho 1~ years of the agreement. No project report was, however, prepared and submitted by the A.T.E. to the Government of India. In para 24 of their 11 th Report (Second Lok Sabha), the Committee, therefore, observed that they were not in a position to comment on the actual progress of production in the I.T.1. From the estimated figures of payment of Rs. 2 lakhs* on account of royalty which was based on the invoiced output of the I.T.!., to be made to the A.T.E. for the period 1949-50 to 1957-58, it appeared to them that the actual production of the company had fallen short of what was contemplated at the time of signing the agreement. 2. In reply, Government admitted that the estimate of Rs. 87 lakhs on account of payment to be made to the A.T.E. during the course of 15 year~ of the agreement had proved to be very much on the high ~ide, but that it was not due to any short-fall in production as originally estimated. No other reasons have been put forth by Government :lor such a high estimate· Government, however, stated that the exact procedure for the calculation of royalty had not been finalised at tho time of framing of the original estimates, which were, therefore, based on rough calculationit-. 3. In the absence of a Project Report and the break-up of the figure of Rs. fl.7 lakhs, referred to above, the Committee find it difficult to accept Government's contention that there was no shortfall in

• At the time of factual verification of the Report, the Mini.try of Transport and Com- munications (Department of Communications) invited attention to its Office Memoran- dum No. 19-TF(4)/58 dated the 5th October, 1960, wherein it had furnished to the Committee the following revised figures of payment on account of royalty :- From 1949-50 to 1956-57 Rs. 2,89,055 Estimated payments for 1957-58 and 1958-59. Rs. 5,45,000 Total :- Rs. 8,34,055 2 production as originally estimated. They are surprised that important matters like the procedure of calculation of royalty and total amount to be paid therefor should have been left undecided while finalising the agreement. The fact that the estimate of Rs. 87 lakhs has proved to be excessive also indicates that adequate thought was not given to the question in working out the details of the agreement. The Com- mittee trust that greater care would be exercised by Government in iluch matters in future. 4. As the agreement with the A.T.E. is due to expire in 1963, the Committee would like the Government to settle their accounts with the finn expeditiously. Project Report 5. With regard to the absence of a Project Report pointed out by the Committee in para 7 of their 11 th Report (Second Lok Sabha), Government replied that had there been a Project Report from the very beginning, that would have led to the purchase of plant and machinery much in excess of that actually purchased in the absence of any project report,. since in that case, I.T.1. would have ordered all plant and machinery on the basis of the Project Report. The Committee are surprised at this explanation. In their opinion, it should have been the normal and prudent practice to get a Project Report from the Collaborators. A Project Report would undoubtedly help in keeping a watch on the timely and proper execution of the Project at various stages, its cost, programme of production, etc. They trust that, in future, Government will ensure that a Project Report is invariably obtained from the Collaborators before launching upon any Project. . ... tHAPTBR It ! RECOMMENDATIONS THAT HAVE BEEN ACCEPTED BY GOVERNMENT

.....~ Serial Reference t'" No. of to para No. en recom- of the Summary of Recommendations Reply of Government '1 menda- Report ,. tion as in Appendix V of lIth report

I 2. 3 4

2. 10 The Committee feel that the limitations referred to in The recommendation has been noted and is being ~ clauses I and 10 of the Agreement with the A.T .E. brought to the notice of all other Ministries and have precluded the I.T.1. from extending its ope- Departments of the Government of India. rations to other areas where it could find a ready market especially now that the I.T.1. has the ca- In this connection it may, however, be noted that so pacity and means to undertake production for this far as the I.T.1. Ltd. is concerned, clauses I and purpose. They were informed in this connection 10 have not in fact operated to I.T .1's disadvantage that the ATE had already been addressed by the considering that even in respect of the territories LT. I. to modify these clauses so as to include to which it was open to them to export their pro- some more territories for LT. I. to do business for ducts, it has not been possible for them, for various a specified period. While the Committee hope reasons (e.g. competition from other older and that these efforts will meet with success, they well established foreign firms), to export any would nevertheless suggest that in similar cases sizeable quantity of their products, let alone es- where the Government of India may enter into tablishing themselves therein. agreements with foreign firms for the establishment ofindustries in the country, due care should (Ministry of Transport and Communications O.M. No be taken not to fetter themselves by restricting IC)-TF/4-58, dated 5-9-1960.) the territory of operation. 4 ,.

3123 12 While the dauses (4 and 5) appear quite statisfactory While the A.T.E. have'been giving to I.T.I. in- from the Jegalistic point of view, the Committee formation from time to time about patents and feel that in their practical operation, these have I.T.I. have been meeting the cost of their applica- placed the I.T.I. in a disadvantageous position tion and maintenance, there has been no occasion inamwchas: so far for the I.T.I. to passon to A.T.E. informa- (a) theseclausesvirtuallypreventthel.T.I.from tion regar<:ti.Oginv~tio~s or developments m~de getting any technical know-how from any oth- by them or 1Oforman

• I S The Committee fail to understand why information'is The recommendation has been noted and is being not available in the Ministry to show how clauses brought to the notice of all other Ministries and 4 and S were included in the Agreement. They Departments of the GQvernment Qf India for would auggat that while examining the implica- guidance. tions of various clauses ~ontltinedinlll8feements

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23 58 In reprd to the amounts provided for depreciationlProViSiPn for depreciation is now made on the straight the Committee observed variations which seem line basis at the rates based on the lives of dif- to have no relation to either increase in machinery ferent types of assets which have been fixed. or in production. The Committee suggest that In addition, the Company has a Replacement this should be examined by the Management. & Renewal Reserve to which appropriations are made when profits permit. The balance in the 24 59 The Committee consider that provision for replace-J Fund at the end of 1958-59 is Rs. 12' SO lakhs, malt .hould be basedon some scientific formula. which is considered adequate. The suggestion made by the Estimates Committee for evolving some scientific formula is being pursued.

(Ministry of Transport and Communications O.M. No. 19-TF/4-58, dazed 8-3-1960.) -- 25 60 The Committee would suggest that, as a rule, pro- The recommendation of the Estimates Committee vision should be made for General Reserve since has been noted by the Indian Telephone Industries sud! reserves go to strengthen the internal finan- ces of an undertaking. (MinUzry of Transport and CDlllttlUnicationsO.M. No. 19-TF/4-58, dated 8-3-1960.)

26 61 ThcCommittee do not feel happy that a cotnmercial The matter is being pursued actively. The out- undertaking like I.T.I. should have allowed outstandings have been substantially reduced in- st8DdingsoftheorderofRs.138 lakhstoaccumu- asmuch as the amount was brought down from late especially from a department whose repre- Rs. 130 lakhs in March, 1957 to Rs. 92'7 lakhs sentative functions on its Board of Directors. in March, 1958 and allowing for payments made· They consider this as particularly unbusinesslike by the Posts & Telegraphs in March, 1958 blat in view of the fact that because of this locking up received in April, 1958, the amount would stand offunds, the I.T.I. had to borrow from the Go- at Rs. 79' 7 lakhs. For the year 1957-58, the total venuueDt and the State Bank of India. These amount billed against Posts and. Talecrapm was. bortoWittgs amounted to :as.121 lakhs as on lb. 256 lakhs and the tt>ta1 payments received 31-3-57 and the interest was about Rs. 5 lakhs. amounted to Rs. 356lakhs including payments in The Committee recommend that action to liqui- arrears. date all the outstandings should be vigorously pursued by I.T.1. with the concerned depart- The amounts due from P.&T. Department have been ments. reduced further. They stood at Rs. 65 lakhs in March, 1959 and have gone down to about Rs. 57 lalths in August, 1959. An arrangement has also been recently evolved whereby I.T.I. will get full payment from P. & T. within 20 days of submission of bills. This is expected to improve the position further.

(MinistTyof Transport and Comrmmicalicm.s O.M; No. 19-TF/4-58, dated 8-3-1960.)

(0 28 63 As regards the 90% value required to be paid to An agreement has very recently been reached by the I.T.I. on despatch of goods, the Committee I.T.I. with the Posts and Telegraphs Department would suggest that since there is already P. & T. under which they have agreed to pay 100% of inspection staff stationed at the I.T.I. the desira- the cost of goods within 20 days of presentatidn bility ofsending immediately a copy of the I.T.1. of bills by I.T.I. to the Posts and Telegraphs Cost delivery Challan accompanied by the inspection Check Unit attached to the Indian Telephone certificatc;s to the D.A.G., P. & T. concerned, who Industries. The Director Gent:ra1, Post and could on its receipt arrange payments to the I.T.I. Telegraphs, will ensure that the terms of the should be considered. agreements are acted upon by the various paying units. Payments to I.T.1. are authorised by the Paying Units and not by the Dy. A.G., P. & T.

(Minimyof Transport and Communications O.M. No. 19-TF/4-58, dated 8-3-1960.) ,

I 2 3 4 ______---4------29 64 If is . wrong for any authority to place an order for Suitable instructions have since been issued by supply of goods without being in a position to pay D.G., P.&T. to all Heads of Circles and Adminis- for them which is also no ground for not paying trative Offices to ensure that prompt action is for an obligation incurred. The Committee re- taken to issue sanction to the estimates which commend that the D.G., P. & T. should examine are WIthin the competence of the Heads of Circles all such cases and issue strict instructions in the and the Subordinate Offices. It has also been matter. enjoined therein, that the estimates which require sanction by the P. &. T Directorate should . be submitted promptly by the Heads of Circles and Administrative Offices to enable Directorate to issue sanctions to the estimates, by the time equipments orderd for, are despatched. ~ o ~o 65 As regards sales-tax the Committee fail to under- The Director General, Posts and Telegraphs, issued uand why its payment should continue to be necessary instructions to his subordinate units objected to by the P. & T. units even after the in the matter on 26-4-1958. As regards the inter- question of lOter-State sales tax has been settled mediate period, the matter is still under consi- and particula::ly for the periods prior to 6-9-55 deraion of the Law Ministry. and after 1-7-57. They suggest that immediate instructions should be issued in the matter by the (Ministry of Transport and Communications O.M. No. D.G.,P.&T. in regard to these periods. As regards I9-TF/4-58, dated 8-3-1960.). intermediate period the matter was stated to be under consideration of the Law Ministry. The On 5-10-1960, the Ministry informed that it has Committee hope that an early decision will be been held by the Ministry of Law that during ~hed in the matter~ the intermediate peIiod from 7-9-1955 to 30-6-1957 the States were not competent to levy sales tax on Inter-State transactions. (Ministry of Transport and Communications O.M. No, I?-TF/4-S8, dated 5-Io-I~.) 1-1 ~t 66 As reg4rds non-payment of aills 011 Ilccount of re- The procedure suggested by the Committee wouid ! jections, the Committee would suggest that ins- now be followed. tead of disallowing bills and holding up payment, ~ the feasibility of first making full payment of Bill (Ministry of Transport and Communications O.M. No. '-' and thereafter making adjustment for rejections 19-TFI4-58 dated 8-3-1960). r- by means of credit notes should be considered. This procedure they understand exists in the case t of sppplies made to the Railways and Defence. 36 74 The Committee do not appreciate wide variations The Committee's recommendation has been noted between the actuals and Budget figures, in the and the LT.I. are trying to ensure that variations case of an undertaking like the I.T.1. which has between Budget figures and actuals are reduced to an assured business on the basis of the cost of the minimum possible. production. They feel that such wide variations render effective financial control difficult and that (Ministry of Transport and Communications O.M. to minimise them the standard of budgeting which 19-TF14-58 dated 8-3-1960). in turn depends on proper accounting and ...... costing should be improved......

39 78 The Committee consider it desirable that the Annual The question raised by the Committee regarding the Accounts and Reports of public undertakings form of presentation of the annual accounts and placed before the Parliament should be made far the reports of Public Undertakings was brought more detailed and exhaustive than at present. to the notice of the Department of Company 1.£w These should clearly bring out the financial work- Administration who have since issued instructions ing of the undertaking as well as of its various in the matter 'Vide No. 1(14)-C.L.VI/59 dated the manufacturing departments and branches, an 16th April, 1959 (Appendix I). analysis of account with particular reference to administrative expenses, overheads, staff strength (Ministry of Transport and Communicalions O.M. No. and measures to control them, actual production 19-TFI4-58, dated 12-8-1960). of various items and its costs and trends, relations with users, personnel and training matters, etc., together with illustrative graphs and charts wherever possible. In .this connection, the Committee 1 2 3 4 ¥

would suggest that the Annual Report and' Ac- counts of the Nationalised Industries in U.K. might be considered as a model. Further, in order to enable Parliament and Parliamentary Com- mittees to make a proper study of these undertakings, their annual accounts and reports for the preceding financial year should be laid before the Parliament before the commencement of Budget discussions.

41 86(i) The Committee would recommend that the I.T.1. The position is now much better and the P. & T. should impress on the P.& T. whose representa- Department are placing order in advance. .... tive functions on the Board of Directors of the N I.T.1. the necessity of intimating actually the (Ministry of Transport and Communications O.M. No. firm requirements sufficiently in advance and of 19-TF!4-58 dated 8-3-1960). not making changes in them frequently. They feel that this should be possible by undertaking proper planning in the P & T. In this connection it is important to point out that for economical working schedules once fixed should not be frequently altered since such changes result not only in decreased productivity but also in loss of work- flow and insufficient use of man-power and machines. 42 91 The Committee feel that the manufacture of the It may be pointed out that the Indian Telephone transmission equipment needs to be given greater Industries had no experience of manufacture of attention in the LT. I. than at present specially Transmission Equipment and even the Automatic ~nsideringits r~venue-earning capacity as well Telephone and Electri~Co., which is a firm as future demand. The Committee understand of very long standing, had to struggle hard before that in the export field also, there are greater their equipment came up to the required standards. chances of marketing transmission equipment It takes considerable time to establish any new than telephone exchange equipment. They, there- type of manufacture. For meeting the entire fore, suggest that the programme of transmission requirements of the P. & T. Department, a much equipment of the LT.L should be reviewed in the larger factory would have been needed and it light: of the above remarks. would not have been possible to find suitable trained personnel for the factory. Training in the new lines of manufacture and setting up of manufacturing and inspection processes take time and the Indian Telephone Industries has been trying to complete these processes in as short a time as possible. (Ministry oj Transport and Communications O.M. No. 19-TPI4-58 dated 8-3-1960). ~ CoO 43 92 The Committee suggest that the feasibility of The utilisation of surplus capacity is kept constantly further production of screws and die-casts and in view by the Indian Telephone Industries. similar other items should be explored so as to During 1957-58, the factory secured commercial utilise fully the spare capacity . orders amounting to a production of 30,817 machine hours and the number of components pro- duced was about 75 lakhs. The factory also took up some other jobs like Die Casting, Plating and Heat Treatment etc.

(Ministry oj Tratl.ffJOrt and Commamications O.M. No. 19-TP,4-58 dated 8-3-1960)

44 94 The Committee understand, that some difficulty There is at present considerable co-ordination bet- is being experienced by the B.E.L. and LT.!. ween the I.T.I. and Bharat Electronics Ltd., in regard to the manufacture of certain parts and in this matter. The LT.L is manufacturing the components for each other since B.E.L. follows Channel terminating equipment in' certain wireless I 2 3 4

the metric system while the I.T.I. follows the systems for the Bharat Electronics Ltd., as their traditional F.P.S. system. They suggest that this sub-contractors. matter should be expeditiously examined with a view to standardisation as well as production. (Minimy of Transport and Communications O.M. No. Ig-TF/4-S8 dated 8-3-1960). 48 103 The Committee recommend that further efforts to This has been noted and neceasary a(jtion is being tap export markets on commercial lines should be taken. vigorously pursued by the I.T.I. (Ministry of Transport and Communicationl O.M. No. Ig-TF/4-S8, dared 8-3-1960)

49 106/ 107 The Committee are concerned to observe that the In a growing factory organisation, some spare I.T.I. purchased from A.T.E. more plant and machine capacity is inevitable. This is particularly .... machinery than was required for the production, so when emphasis is placed on cutting down the • as a result of which c01L

(a) substantial increase in production; and (b) by the addition of a few machines to minimi. the imbalance. (Ministry 01 Transport and Communications O. M. ... No. 19-TF/4-58, dated 5-10-1960). ;~:14;~•

51 III The Committee consider that it should be possible The recommendation has been noted by I.T.I. to minimise overstocking and yet avoid bottle- •..,,," ; ..~, 1 ~.~ 1 necks by proper planning and by stipulating In spite of precautions the stores are not received realistic delivery dates for materials and by in time either due to difficulties on the part of imposing penalties for failure on the part of sup- manufacturers or difficulties in transport etc. pliers to supply the materials in time. At the So long as it is necessary to import raw materials same time, a commercial organisation like the from abroad, it is necessary to keep a much bigger I.T.I. should also take full advantage of periods stock than is done by the manufacturers in the when thej'rices of materials are at a low level to Western countries. The stocking is to be done obtain an stock them and for this purpose, the with due regard to the time involved in the pur- Board of Directors should exercise latitude with chase of raw materials, the quantities in hand and proper discretion. the consumption of stock upto the date of receipt of fresh supplies with sufficient margin given for various contingencies. 1 :a 3 4 • In regard to indigenous materials also, due allowance is to be made for supply of correct raw materials etc. It frequently. happens that the materials actually supplied do not conform to the specifications approved at the time of placing of orders, with the result that the materials have to be returned to the suppliers which causes much dislocation of work. Further, the delivery periods are also uncertain with regatd to certain types of materials like indigenous steel items. The suppliers in such cases are not prepared to accept penalty clauses as the programme of manufacture of steel has often to be revised ..... according to the priorities allotted from time to time. Sufficient margin has to be kept for all - these factors in stocking raw materials. (Ministry of Transport and Communications O.M. ~No.I9-TF/4-S8, dated the. 8-3-1960).

54 123 The Committee would suggest that the P. & T. Statistics of waiting list in all exchange areas are Department should undertake a survey of tele- being compiled every quarter by the P. & T. phone requirements of the country at regular Department, which give an idea of the size of intervals. the pending demands of telephone requirements in the country. (Ministry of Transport and Communications O.M. No. IIj-TF/4-S8, da,~the 8-3-1960)......

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2 2 1 1 The above expansion programme of the Hindustan Cables Limited part of which has already been § completed as stated above is the minimum required for meeting the increased requirements E of the P. & T. Department. (Min. of Transport and Communications O. M. f No. 19-TF/(4)-58 dated the 21-10-1960). 61 134 While the Committee are in no position to com- The P. & T. Department have noted the recom- ment on the technical reasons adduced for mendation of the Committee and have initiated replacing the auto Exchanges of Bhavnagar, suitable action in the matter. They expect Gwalior and Mysore by manual one, they con- that by 1962-63 the necessary Auto Exchange sider it most unfortunate that even 7-8 years after Equipment will be brought into service at these this change was made the reconversion to auto places. exchanges has not been made. The Committee trust that no further avoidable time would be (Ministry of Transport and Communications O.M. lost in restoring this facility which existed in No. 19-TF /4-58, dated the 8-3-1960). . to these places till 1950. 63 139 For the successful running of a telephone industry Action is being taken for setting up of a proper it is of utmost importance that Research Unit Research Organisation for the Indian Telephone ~houldwork as a close adjunct to the manufactu- Industries. The nucleus organisation has al- ring Centre so that developments made could be ready been set up in the shape of a Development quickly translated into production units. The Wing which, during the short period of its exis- Committee would suggest that this question tence, has done very good work. It may, how- should be examined further. ever, be mentioned that while research work in the long run will result in the lowering of the cost of production and improvement in the quality of equipment, it is bound to increase the overheads to some extent. (Ministry of Transport and Communications O.M. No. 19-TF /4-58, dated the 8-3-1960). 1 2 3 4

64 141 The Conunittee urge that greater attention should There is very close co-ordination between the be given to Research activities. For this pUr- Indian Telephone Industries and the Posts & pose, they would suggest that the I.T.I. and Telegraphs Research Centre in all matters con- P. & T. should concentrate first on building up cerning tele-communication research, design and a nucleus of adequately trained research staff development. This co-ordination is maintained who could build-up a research organisation gra- not only by way of exchange of information in dually. Simultaneously a phased and co-ordi- the formulation and final stages, but close liaison nated programme for expansion of research ac- is maintained at all stages and exchange of in- ti.,ities in the I. T. I. as well as in the P. & T. formation takes place regularly at appropriate Departm.!nt should be drawn up. In this pro- levels. TheA.T.E. have also started sending reports lI'amme, due stress should be laid on the utili- to the I.T.I. about some of their develop- sation of indigenous raw materials as well as on ment and research activities. improving the production processes in the I. T.I. Finally, every effort should be made to maintain (Ministry of TramlJurt and Communicatiom O.M. ~ contacts with A.T.E. and other Tele-Commu- No. 19-TF /4-58, dated the 8-3-1960). nication ManufactUrers in regard to their research activities. 65 1,p The Committee feel that the existing coordination There is no objection to the proposal for setting up for Research is not adequate. They would, a Tele-Communication Research Council to therefore, suggest that there should be greater integrate the research activities in this field and integration between the research activities of to ensure that the available resOUrces and facilities the I.T.I., P. & T., Railways, Defence and Uni- are put to the maximum advantage. The Mi- versities so that limited resources and facilities nistry of Scientific Research & Cultural Affairs in this field might be used to the best advantage. will be requested to take necessary steps for For this purpose the Conunittee would suggest working out details etc. in reiard to the estab- the setting up of a Tele-Communication Re- Iishment of such a Council. search Council consistin, of experts drawn from these orianisatioIll. (Ministry of Transport and Communication, O.M. No. Ip-TP/4-SS, tltlt,. ,h,6-10-1960). 68 IS:1 The Committee suggest that the question of taking All employees who are given training are required suitable undertaking from those especially trained to execute an agreement according to which they for employment in I. T.1. should be considered. have to serve the Factory for a limited period. However; in one case it was held by a Court that these agreements cannot be enforced after appointment and that further employment would, thereafter. be governed by the provisions of Standing Orders and that an employee cannot be compelled to serve the Company or pay an) compensation which is not in consonance with the provisions of the Standing Orders. Legal advice is being obtained for amending the agreement suitably with a view to making a provision for payment of liquidated damages to the I.T.I. in such cases. (Ministry of Transport and Communications O.M. No. IC)-TF/4-S8, dated 8-3-60). -N 70 ISS The Committee fail to understand the justification Orders have since been issued discontinuing for the grant of a conveyance allowance to 6 the grant of Conveyance Allowance to the officers senior officers of I.T.I. and the entertainment of the P. & T. Deptt. on foreign service with the allowance to the Managing Director. In this I T I. w.e.f. 1st April, 1960. In view. however, connection. reference is invited to para 66 of of the increased responsibilities that these officers the Committee's 27th Report (1st Lok Sabha) are required to undertake while they are serving on the Hindustan Insecticides Ltd. with the ITI, it has been decided to grant them a Duty Allowance in addition to their pay, at 20% of pay, subject to a ceiling of Rs. 300/- per month. As regards entertainment allowance, Govt. of India have decided that w.e.f. 1-4-60, all Govt. undertakings should adopt the system of debiting' expenditure on official entertainment directly I 2 1 3 4

to-the . 'accounts of the undertaking instead of granting entertainment allowances to individual officers mde Ministry of Finance Office Memo- randum NO.9 (40)-Bst. II (B)/58, dated the 2nd November, 1959. In respect of e:lristing officers, who are already drawing entertainment allowance, it has been decided that they should be given option to continue to get entertainment allowance, if they so desire, during their incumbency. (Ministry of Transport and Communications O.M. No. 19-TF/4-S8 dated 12-8-1960). "&I 71 156 The Committee trust that the I.T.I. would before The incentive Scheme has been introduced from long introduce the Wage Incentive system on a the 2nd June, 1958, in some of the Shops and scientific basis and thus stimulate production. is being progressively extended. (Ministry of Transport and CommunicatWm O.M. No. 19-TF/4-68 dated 8-3-1960). 73 IS8 The Committee would suggest that the workers A scheme for payment of Attendance Bonus was and staff should be educated to reduce absentee- approved by the Board at their meeting held on ism and that recognition should be given to those the 26th September, 1959. who are prompt and always on the job. In this connection they would invite reference to the (Ministry of Transport and Communications O./tf. recommendation made in para 99 of their 67th No. 19-TF/4-58 ~ated198-~-I96o). Report on the H.A.L. for the introduction in aU State Undertakings of an 'Attendance ~u~ Scheme' as in the H.A.L, ~ rs9 'the Committee 'Would suggest that the schemes 1'he suggestion scheD1e is weU pubUcised, but th~ of rewarding suggestions as well as the awards rewards paid are at present not very attractive. so far made may be better publtcised so as to The question of increasing the amount earmarked e~bleth.e workers to appreciate the types of for rewards is under consideration and it is hoped I~tionsthat they sh(;>uld. make e.g"! those that thi.s will lead to i~crease.in.the .num?er of wh;i~~'Would make for savmgs 10 labour, tune and suggestlons. [Reference IS also 10vlted 10 this con- ~te~lds.accident p~evention.increased sales, nection to Railway Board's Office Memorandum'" etC. Further when a suggestion is not accepted, No. 58-B(C)-6000/II/Ilth Report, dated the the 'r~onmay be giyen to the employee submit- 21st August, 1958, to the Estimates Committee.] tida the sllgiestion if possible. The Railway Board stated as below :- "Necessary instructions have been issued to the Railway Administrations under Railway Board's letter No. E(G)58PTI-12 dated t 10-7- 1958." ri~ tt, (Ministry of Transport and Communications O.M. No. 19-tTF/4-58 dated 8-3-1960).

76 164 The Committee would suggest that it might be Reference is invited in this connection to Railway impressed on the Railway Administration to Board's Office Memorandum to the Estimates attend to the late running of workmen's trains Committee No. 58-B(C)/II/Ilth Report, dated so as to minimise detention and consequent the 7th June, 1958.* The train is now running loss of production in I.T.I. much better and the loss during a period of recent three months was :-

May, 1959 94 man hours. June, 1959 183 man hours. July, 1959 41 man hours. -The Railway Board stated as below:-'

"Presumably, the reference is about the un- punctual running of No. 328 Bangalore City- Bangarpet Passenger between Bangalore City and Krishnarajapuram Stations, by which train the workers employed in the Indian Telephone Industries travel daily.

The Southern Railway Administration have already been asked to take special and etfec- ~ tive steps to improve the performance of the train."

(Ministry of Transport and Communications O.M No. 19-fl'F/4-S8 dated 8-3-1960).

77 167 The Committee would recommend that the I.T.I. There is a phased programme for training the should formulate a phased programme for the technical personnel and for taking full advantage training of their technical personnel in the ex- of the offer made by the Automatic Telephone panding sphere of tele-communication equip- and Electric Company. ment in the A.T.E.'s Works and also establish with the assistance of the A.T.E. training pro- ~e in the I.T.1. itself for the purpose. (Ministry of Transport and Communications O.M. No. 19-TF/4-$8 dated 8-3~196q). 7« I~ The Committee would suggest that the desirability The 8u~sestionmade }'J' the Committee that. more of putting a more senior officer. serving or retir- senior officer shoul be put in charge of the ed with experience of Tele-communication En- Training School is being pursued by I.T.I. gineering in charge of the I.T.Is. Training School should be considered. (Miniltry oj Traruport and Communicatiom O.M. No. Ig-TF/4-S8. dated 8-3-1960).

79 169 (i) In view of the expansion of the I.T.I. and the Arrangements would be made for training a laraer need to correlate the number under training to number of persons. the number of employees. which is now over 4,600 the Committee would suggest that the (Ministry oj Transport and Communications O.M. adequacy of the training schemes should be No. Ig-TF/4-S8 dated 8-3-1960). reviewed. 170 (i.) They would also suggest that the I.T.I. should I.T.I. has started a Technical School where some recruit and train qualified apprentices, drafts- theoretical classes are being conducted. This men. tool-makers. designers and that for this will be extended to include draughtsmen, tool- purpose necessary training schemes should be makers and designers. bl started. (Mini5try of Transport and Communications O.M. No. 19-TF/4-S8 dated 8-3-1960).

~ 171 The Committee would suggest that there should be This suggestion is accepted and will be followed. a continuous reviews of the training schemes and programmes so as to introduce modern (Ministry of Transport and Communications O.M. methods of productiol'l and work. No. Ig-TF/4-S8 dated 8-3-1960).

81 172 The Committee would suggest extension of the sch- This suggestion is accepted and will be followed. erne known as "Training Within Industry" which they understand is invaluable. In addition, they would also suggest that courses for executive (Ministry of Transport and Communications O.M. development need to be encouraged in order to No. 19-TF/4-S8, dated 8-3-1960). ensure an adequate supply of persons,

~ ~

of of

six six

for for

the the the the

the the

the the not not

the the

plus plus

per-

such such

have have

some some

figure figure

, ,

figure figure

taking taking

would would

of of

figures figures

outside outside

by by

and and

1954-55 1954-55

41, 41,

carry carry

year year

the the

that that

the the

Report Report

assumption assumption

half half

the the

out out

This This

to to

outside outside

No. No.

this this

always always

+33.3

85% 85%

years years

be be

percentage percentage

deducting deducting

way--by way--by

the the

S. S.

and and

a a

This This

of of

from from

percentage percentage

are are

was was

Taking Taking

and and

assumed assumed

previous previous

and and

1956-57, 1956-57,

worked worked

three three

attempt attempt

+45.

would would

lakhs lakhs

be be

manufacturers manufacturers

gives gives

87 87

as as

against against

the the

This This

different different

year. year.

the the

I.T.I. I.T.I.

year year

4 4

investment. investment.

a a

there there

can can

year year

in in

I.T.I. I.T.I.

and and

others others

obtained obtained

1,023 1,023

in in

that that

a a same same

average. average.

It It

the the

which which

+62.69. +62.69.

87%. 87%.

as as

84 84

at at

production production

but but

during during

2 2

in in

an an

remarks remarks

or or

capital capital

.7 .7

Rs. Rs.

the the

Forthe Forthe

to to

telephone telephone

one one

70, 70,

lakhs lakhs

on on

during during

from from

the the

106.7

total total

obtained obtained

used used

2 2

was was

total total

arrived arrived

in in

slightly slightly

of of

nearly nearly

comes comes

Paras Paras

stock stock

164.1 164.1

components components

be be

377 377

the the

33.3+

production. production.

'which 'which

production production

method. method.

in in

production production

of of

obtain obtain

very very

Rs. Rs.

reasonable reasonable

obtaining obtaining

in in

value value

also also

1956-57 1956-57

a a

or or

indicated indicated

total total centage centage

items items

to to other other 84, 84,

components components given given

to to

components components 377 377

months' months' is is

half half

use use

improve improve

components components

cost cost

the the

41% 41%

actual actual

can can

As As

a a

to to

of of

an an

to to

the the

and and

may may

with with

each each

at at

make make

and and

to to

along along

during during

of of

done done

Workshops. Workshops.

industrialist industrialist

desirable desirable

capacity capacity

it it

consisting consisting

available available

Engineers Engineers

Workshops. Workshops.

be be

Committee Committee

I.T.I. I.T.I.

P&T P&T

that that

this this

assignments assignments P&T P&T

made made

working working ability, ability,

the the

so so

Parliament Parliament

the the

would would

under under Accountant

of of

and and

that that

it it

of of

the the

experienced experienced

Committee Committee

3 3

Cost Cost

of of

Technical Technical

report report

enable enable

course course

an an

that that

arises. arises.

I.T.!. I.T.!.

affairs affairs

necessary necessary

its its

managerial managerial

of of

due due

by by

working working

feel feel

This This

the the

and/or and/or

would would

need need

for for

Tele-comrounication Tele-comrounication

in in

and and

Technical Technical

recommend recommend

the the

into into

a a

made made

the the

assessment assessment

two two

also also

da,te da,te

as as

possess possess

decade. decade.

Report Report

or or

look look

review review

Committee Committee

Chatjtered Chatjtered

eXpenoess eXpenoess level level

who who

ChairmlilnsPip ChairmlilnsPip

last last a a

to to

cop-ect cop-ect one one early early

thjs thjs

progress progress appoint appoint They They

Parliament Parliament

also also

The The

:a :a

17,4 17,4

1 1 83, 83, .... a. co is considered very good. In fact, in other coun- -.J tries telephone factories depend on others to a much larger extent. ~ '-' There have been delays in the manufacture of t"' Ul transmission equipment but considering the com- plicated problem that had to be faced, the trans- ?'", mission division has done a very good job. The LT.L is manufacturing Single Channel, 3-Channel and 12-Channe1 Open Wire Systems. It has also taken up the manufacture of part of the equipment required for the Co-axial Cable Scheme and a number of other items for special needs. Considering that a beginning was made in the transmission field only in 1952-53, WiJ that the first production was in 1953-54, the progress made so far is satisfactory. Efforts are being t.:l made to effect economies wherever possible and -J though there may be scope for improvement, there is no scope for substantial economies. The fact that it has been possible to make substantial reduction in the price of the equipment would substantiate the claim of the Indian Telephone Industries that this aspect is receiving due consideration.

The Committee, in para 70, have stated that the ioncrease in salaries and wages do not compare unfavourably with the increase in production. The expenditure trend on staff cannot be regarded as unfavourable to the undertaking. It has also been stated earlier that the accounting system is well suited to the requirements of the Factory.

00 00 t.I t.I

a a

to to

in in

an an

the the

not not

of of

the the

pro-

gone gone

com-

been been

P&T P&T

subs-

so so

period period parti-

appre-

recom-

of of

A.T.E. A.T.E.

quality quality

various various

such such

are are

arrange-

assess assess

proposed proposed

the the

competi-

or or

not not

the the

Kamanis, Kamanis,

have have

also also

the the

apt, apt,

the the

and and

the the

at at

for for

comparison comparison

factory factory

to to

into into

and and

a a

not not

were were

1961 1961

suitable suitable

have have with with

etc. etc.

kind kind

The The

recommendation, recommendation,

appointment appointment

before before

able able

quite quite

supplying supplying

under under

and and

time time

in in

parts parts

continuance continuance

LT.L LT.L

Government Government

rates rates

Workshops Workshops

be be

is is

the the

would would

make make

Kirloskars, Kirloskars,

not not

same same

the the

T.1. T.1.

high high

enquiring enquiring

the the

I. I.

the the

is is

mechanised mechanised

for for

to to

A.T.E. A.T.E. the the

proper proper then then

be be

the the

if if

in in

agreement agreement

turned turned

overheads overheads

P&T P&T further further

LT.!. LT.!.

for for

sometime sometime

by by

4 4

Electricals, Electricals,

of of

to to

appointed appointed

the the

while while

able able

the the

behind behind

any any

concerns concerns of of

like like

to to

the the

be be

would would

be be

made made

The The

In In

present present

goods goods

that that

bound bound

with with

suggestion suggestion

United United

Workshops Workshops

purchases purchases

overheads overheads

I.T.I., I.T.I.,

These These

regarding regarding

may may

the the

also also

Committee Committee reasons reasons

are are

the the

relating relating

of of

factories factories

the the

would would

the the

because because

quantities quantities

LT.L LT.L

progress progress

and and

these these

earlier. earlier.

the the

of of

Cycles, Cycles,

consider consider

Committee Committee

rates. rates.

the the

for for

expiry expiry

regards regards

petitive. petitive.

tive tive

in in

T.!. T.!. private private

Technical Technical

gress gress

manufacturing manufacturing

tantial tantial

as as

they they

ciate ciate

cularly cularly

ments ments

full full

mendations mendations Department Department

of of

The The

between between collaboration collaboration

enquiry enquiry Committee Committee

overheads overheads

given given

As As

Comments Comments

3 3

2 2

I I ~------give sufficient time for a review being mad.e before the expiry of the agreement in 1963. This Committee can als review the working of the P&T Workshops, with a view to bringing a larger measure of co-ordination.

In this connection it may be added that a number of eminent Tele-communication Engineers, Scien- tists and Experts, who have visited the I.T.!. have all commended favourably on its working. One of them, the late Dr. J. C. Ghosh, stated in his inaugural address before the Annual General Meeting of the Institution of Tele-communication Engineers in New Delhi on the 29th December, 1956, "the Indian Telephone In- t& dustries, whose present weekly production is 1000 telephones, 750 exchange lines and more than one carrier telephone system, is a concern which in efficiency and provision of amenities to its employees may serve as a model for others in both public and private sectors." The production has since gone up to 1800 telephones, 800 main exchange lines, seVen small exchanges and more than four channels for carrier equipment per week.

(Ministry of Transport and Communications O.M. No. 19-TF/4-58, dated 12-8-1960). 1 2 3 4

In O.M. No. 19-TF(4)/58 dated the 9th November, 1960 the Ministry of Transport and Communi- cations informed the Committee that "Production has now gone up further at the Indian Telephones Industries Ltd., and the figures of the present weekly production (1960-61) are as follows (I) Telephones 2,300 (2) Exchange Lines 1,557 (3) Long distance transmission channel equipment 29 Channels.":' ~ t HAp T E R-III REpt.rEs OF GOVERNMENT THAT HAVE BEEN ACCEPTED BY THE COMMITTEE

S. No. Reference Summary of Recommendations/ Conclusions Reply of Government as per to para summary No. of the Report

I:" .... I 2 3 4

8 2S The Committee suggest that the provisions entitl- The financial interests ofthe A.T.E. in the I.T.1. ing A. T.E. to one seat on the Board of Directors are to the extent of Rs. Io;oo,soo-roughly 2· S% of the I.T.I. may be reviewed and discussed if of the total share capital of Rs. 4 crores. The considered desirable with A. T.E. in the light of agreement with the A. T.E. provides inter alia the changes made in this regard in the Agreement that A.T.E. may, at any time, relinquish their entered into by the HMT Ltd., and Hindustan share capital at par in favour of Government. Steel Ltd., with their forciiD consultants, as a Despite the fact that dividend has been paid by result of which the latter function only as Tech- LT. 1. only during the last 4 years, and that the nical Consultants. rate of dividend has been ranging between 2 ana 21%, the A.T.E. have'not chosen to exercise the option provided in the Agreement. Further- more, A.T.E.'s representative on the I.T.I.'s I 2 3 4

Board has generally been helpful and LT.L has been able to gain by the longer experience of A.T.E. in this line of manufacture.

In this connection it may be added that the circums- tances in which the financial participation of the foreign firms in H.M.T. and Hindustan Steel Ltd. was terminated were peculiar and bear no similari- ty to I.T.rs case.

(Ministry of Transport and Communications O.M. No. ~ 19-TF/4-S8, dated 12-8-1960)

IS 40 The Committee consider that while important finan - The Board of Directors consider that in actual practice. cial matters should be considered by the Board of the discussion of various financial matters by the Directors, there should be sufficient delegation of Finance Committee makes the work of the Board authority below that level for which purpose they much easier and works for considerable saving in have already recommended a Board of Manage- time and smooth functioning of the Board. ment. They, therefore, suggest that the conti- Recently one of the·non-official directors has also nuance of the Finance Committee may be re- been included in the Finance Committee of the examined. Board. The Board Members consider it highly desirable that the present arrangement should be continued. (Ministry of Transport and Communications O.M. No. 19-TF/4-S8, dated, 8-3-1960) 16 43 The Committee feel that it might perhaps be more The work of clearance of stores has in fact been en- economical to entrust the work relating to the trusted to the Clearing and Shipping Agents, clearance of stores received from abroad and for- approved by the Government of India. The warding them to the Head Office, at present Branch Offices or the Regional Offices as they handled by the three Branches of LT.I. to the are now called, serve a different purpose. They clearing and shipping agents approved by the separate out the various items received in one con- Government of India. They would suggest that signment, and send them to the various this question may be examined in consultation customers distributed throughout India. All with the Ministry of Transport and Communica- this work of distribution would have to be done .ions. at Bangalore which would have involved considerable delay and extra expense if there were no Regional Offices at Calcutta and Bombay. There is considerable follow-up action to be taken with regard to these consignments which work is also handled by these R.egional Offices. The continuance of these Regional Offices is, therefore, considered necessary for the proper functioning ~. of the Indian Telephone Industries' sales and distribution organisation. (Ministry of Transport and Communications O.M. No. 19-TF/4-S8, dated 8-3-1960).

I7 44 The Committee feel that the justification for the The staff at the various branches has been kept continuance of Delhi Branch may also be re- absolutely to the minimum necessary for the examined to see whether this work can be done functioning of these organisations. It is necessary through some other agency, such as one that the PAX maintenance work should contint'e to of the Committees discussed in the Report. be handled by the Indian Telephone Industries as 18 46 While the Committee agree that under the drcums- it is an essential part of Sales Organisation that tances it might be necessary for the I.T.!. to keep good service and proper maintenance of the PAX some maintenance staff to look after the PAXs equipment should be ensured for the subscribers installed in the areas served by its various Bran- much of the success of the Sales Organisation ches, they would suggest that the LT.!. should depends on the after sales service and proper

:if :if

a a 8 8

is is of of

of of

be" be"

for for

net net the the

the the

was was

cost cost

only only

of of

a a

1948, 1948,

O.M. O.M.

necl;!s-

proper proper

also also

further further

1957-5

marked. marked.

items items

the the

in in

was was

efftciency efftciency

downward downward

the the

account account

may may

a a

output output

showed showed

1957-58, 1957-58,

been been

manufacture. manufacture.

more more

that that

production production

the the

other other

Telegraphs Telegraphs be be

It It

during during

continuance continuance

index, index,

instnlment instnlment

of of

into into

has has

& &

considered considered

even even

an an

year year

shown shown

price price

The The

cost cost

as as

4 4

take take

certain certain

value value

approximately. approximately.

Communications Communications

Telegraphs Telegraphs

judging judging

1958 1958

should should

Posts Posts

been been

8-3-1960). 8-3-1960).

has has

the the

of of

the the

mentioned mentioned

production production

organisation organisation

the the

not not

telephone telephone

for for

& &

74/-

the the

in in

and and

cent. cent.

be be

therefore, therefore,

have have

this, this,

equipmer.t. equipmer.t.

dated dated

by by

that that again again

the the

prices prices

does does

is, is, Rs. Rs.

telephone telephone

during during

October, October, per per

it it

may may

the the

Posts Posts

out out

to to

the the

paid paid

8 8

production production

it it

as as

yardstick yardstick

of of

the the

automatic automatic

in in

Against Against

reduction reduction

which which

that that

Transport Transport

maintenance maintenance

10' 10'

since since

the the

rate rate

Branch Branch

judging judging

equipment equipment

of of

down down

to to

of of

19 19

pointed pointed of of

and and

I9-TF/4-58, I9-TF/4-58,

for for

proper proper

be be

instance, instance,

79' 79'

Delhi Delhi

108/-. 108/-.

a a

lowest lowest

imported imported

reduction reduction

production production

an an

No. No.

profit profit

sary. sary. Factory. Factory.

the the brought brought

Quantitative Quantitative

charged charged

trend trend Considering Considering

an an Rs. Rs.

the the Rs. Rs.

telephone telephone

may may

basis basis

mentioned mentioned

maintenance maintenance of of

service service

not not

element element

The The

(Minisl1Y (Minisl1Y

As As

It It

to to

by by

the the

only only

as as

made made

to to

manu-

agents.: agents.:

be be

strength strength

well well

to to

maintaInIng maintaInIng

and and

I.T.Lis I.T.Lis

as as

economical economical

have have

clearing clearing

3 3

of of

form form

the the

production production

home home

the the

undertaking undertaking

will will

ill ill

found found

at at

to to

their their

is is

and and

present present

ratio ratio

use use

efforts efforts

question question

it it

work work

items. items.

for for

their their

that that

increase increase

case case

in in

outpn outpn

markets markets

whole whole

to to

in in

handling handling

ancillary ancillary

capacity capacity

evident evident

the the

export export

capital capital

is is

the the

of of

I.T.I. I.T.I.

it it

Branches, Branches,

the the

by by

720/0, 720/0,

entrust entrust particularly particularly

these these optimum optimum examine examine

facture facture

tapping tapping

Since Since

2 2

53 53

1 1 20'· 20'· -.

19) the

Rs.

that No. I08!

State

lakhs lakhs lakhs lakhs 1akhs basis,

capital

because

and indicate

Posts

the

400

487

O.M.

this

against

borrowings Production

(108/79'

RS.76 Rs.

rates Rs. RS.434 Rs.

lakhs

from

the given

•

cent

would

against

lakhs.

appro~imately

necessary

factor

464

appropriate

per

that

participating (476)

Committee.

earlier

Rs. 586 98

1957-58

the

factor

total

become

reduction.

earlier

Rs.

payments borrowings Communications

only

capital 8-3-60).

to instrument, by

Bank for

the conversion

had

Capital

would

these

value State based Government

datul come

Bank

same

explained

conversion

figures

would

ratio

arrears

the

telephone Transport

'2.

TOTAL mentioned

excluded, from from

the paid-up the

State production

been

participating

would

The

1:1 time

results

per are of

the

cent

output

also

1956-57

Loans Loans Total certain

Production production,

It}-TF/4-50,

108/-

79' of the has per

of Bank from Telegraphs. year. for ratio applying better value

(586)

Ratio

Applying

It (Ministry

W: § ~ --~ 21 56 The Committee doubt whether the declaration of a The payment of dividend at 21 % and 2 % for these dividend by the Board of Directors in 1955-56 and years cannot be considered unreasonable having 1956-57 without making provisions for Royalty regard to the fact that no dividend was paid by to be paid to A.T.E. for 1954-55 and selling price Indian Telephone Industries to the share-holders variation for 1955-56 was in consonance with the since its formation in 1950. Moreover, adequate accepted commercial practice. provision for rebate to P. & T. Department had been made under materials variation and Cost variation and selling price variation accounts. Profits shown were, therefore, real and were available for distribution. The royalty to be paid for 1954-55 had not been finalised and no payment has so far been made to the A.T.E. on Coei this account. .. (Ministry of Transport & Communications O.M. No. 19-TF/4-58 dated 8-3-1960).

27 62 The Committee consider that the main reason for The large outstanding against Posts & Telegraphs the outstandings is the lack of promptness on the Department in previous years were partly due to part of the !.T.!. in rendering bills or in chasing want of an agreed rate list for the checking up of those which are not paid within a reasonable time the prices charged. With the introduction of the and also on the part of the P. & T. units in paying new rate list by the l.T.!., these difficulties have or taking any action on the bills rendered to them been removed to a large extent which has been for supply of goods. The Committee recommend reflected in the reduced outstandings. Part of that strong action should be taken against those the outstandings relating to Sales Tax could not who allowed the dues to accumulate both in the be settled due to certain legal difficulties. These I.T.I. and in the P. & T. units and that there have also since been resolved and the Director should in future be greater co-ordination between General, Posts & Telegraphs, has issued the two in the settlement of dues. instructions in this matter to his subordinate ~

to or

the

un-

61).

out-

cost

fully

O.M. O.M.

write- of

officer. indian equip- LT.L,

increase

value

the effort

remarked

improve- not of

explained

invited

(Para

the

fall

production the

instrument

prevailed

compare

that

negligence 1953-54, in

because also

value

every

this

definite ptices

national not

is individual

actual

this

may

No. the

the

in which

in it

However,

themselves

the

any satisfactory

telephone

Communications

satisfied

12-8-1960).

fall Communications 108/-

making

over, II).

been

Serial

case,

is have

prices

production

is 8-3-1960). &

wages

and

due reference

high.

Rs.

manufactured

1957-58.

has

part a

increases in tum

dated any account,

the

been

not reflects

dated

In to cost

Chapter the

the quantitatively,

example, reply

value

into

has

total

there

Ministry

on during

Industries Transport

Transport

the were

with

the For considered

increases

equipment

down.

there in taken

connection

the Committee The

only

effort).

used

otherwise

not of No.

compared

the

19-TF/45-58, 70

although

19-TFI4-58

79 that

production this

carelessness standings In

Government's (Item units. in

para No. Telephone (ITI's offs keep favourably No. reflected that 1953-54. which ment, that Rs. ment prices fact which

(Ministry Considering [Ministry

do the

and

bud-

many

showed

annum)

revenue 1957-58

fuel

that

the in

Board

abnormal action wherever

trends

Committee

expenditure

per

total year the

this

figure

carefully. take

wages,

The

the

picture

the

1954-55

see

the

and

45,000

to them

and

increases have

also

expenditure

since

Rs.

would suggest

higher.

production

the

salary

since

29%

examine

analysed

satisfactory

and

concerned that

(about total

regularly

much

Management

are about

very the

feel

should the

were

a of especially

depreciation

shouJd carefully

disproportionate

company

noticed.

that

write-oft's

and

expenditure

though

of are

reveal

the

I.T.I. increase

Committee

rate management not an directions, when paper geted

expenditure suggest they Directors control of

The

3$ I a 3 4

production will be found to compare favourably with the increase in wages and salaries. This position is clearly depicted in the statement (Appendix II) which shows the increase in the value of production for the years 1954-55, 1955-56, 1956-57 and 1957-58 along with the percentage increase in the number of employees, revenue expenditure and staff expenditure.

[Mimstry of Transport & Communications O.M. No. 19-TF/4-58, dt. 8-3-1960]. \,/.J 00

37 The Committee regret that till this report was Detailed comments on the report of the Chief Cost finalised, information in regard to action taken Accounts Officer are contained in Appendix 4 to l' by the Government on the 2nd Report of the the report of the Committee. It has been men- Chief Cost Accounts Officer of the Government tioned there that Indian Telephone Industries of India was not made available to them by the did not agree with many of the views expressed Government. They however feel that sufficient by the Chief Cost Accounts Officer and it was action has not been taken thereon by the LT.!. desired to discuss the various recommendations Even the Board of Directors do not seem to with him. But unfortunately no discussion could have taken any specific note of the two Reports of take place before he retired from service. It the C.C.A.O., which is rather unfortunate. They may, however, be pointed out that the present would, therefore, recommend that the Board of cost accounting system in vogue in Indian Tele- Directors should arrange for immediate action phone Industries is under constant vigilance of the in regard to these recommendations of the Statutory Auditors of the Company, the Direc- C.C.A.O. tor of Commercial Audit under the control of the Comptroller & Auditor General of India and the Cost Check Unit of the Posts & Tele- graphs Department. They have not so far commented adversely on the system in vogue in the Indian Telephone Industries. The cost accounting system in vogue in Indian Telephone Industries takes into consideration the agreement between the Indian Telephone Industries and Automatic Telephone & Electric Co., and the agreement between Indian Telephone Industries and the Posts and Telegraphs Department and is functioning smoothly having regard to the financial clauses of these two agreements. However, to get another opinion regarding the soundness of the Cost Accounting system of the LT.!., the Ministry of Finance will be requested to ask the new Chief Cost Accounts Officer in that Ministry to go into the Cost Accounting w Organisation of the Indian Telephone Industries \0 again and make any suggestions for improvement which may be considered necessary, after consultation with the Management of the Industry.

[Ministry of Transport & Communications O.M. No. 19-TF/4-S8, dated 8-3-1960].

.p &6 (;,) In the last three years the actual production (the The figure of Rs. 1,023 lakhs mentioned by the I.T.L's efforts) has b!en Rs. 110 lakhs, Rs. 139 Estimates Committee as total production during lakhs and Rs. 176 lakhs respectively, i.e. Rs. 425 the three years includes the cost of tools and other lakhs which comes to only about 41% of the total capital items manufactured in the factory an also ,redaction of Rs. 1023 lakhs during the period. the cost of components made for building up The Committee, therefore, recommend that of stocks. The figure of Rs. 1,023 lakhs cannot,

~ ~

in in

of of

be be

are are

the the

and and

also also

870 870

new new

only only

into into

man-

much much

41. 41. O.M. O.M.

of of

items items

is is

which which

factory factory

arrived arrived

fact fact

shift shift

Rs. Rs.

of of

The The

output output

some some

very very

Room Room in in

percentage percentage equipment equipment

to to

taken taken

has has

capacity capacity

lakhs lakhs

of of

self-sufficient self-sufficient

capital capital

capacity capacity

single single

of of

growing growing

excess excess

it it

are are

machines machines

of of

instead instead

have have

42S 42S

down down

The The a a

Tool Tool

come come

spare spare

an an

future. future.

should should

no no

to to

for for

is is

cost cost

Rs. Rs.

make make

these these

surplus surplus

standards standards

Committee Committee

C01IfIIHIIficaliOftl C01IfIIHIIficaliOftl

has has

working working

near near

Shop; Shop;

would would

to to

Some Some

effort. effort.

brought brought

If If

exclusive exclusive

which which

with with

there there

& &

the the

8-3-1960). 8-3-1960).

The The are are

the the

The The

4 4

which which

necessary necessary

in in

necessary necessary

order order

been been

figure figure

that that

how how

Shops: Shops:

approximately, approximately,

I.T.I. I.T.I.

shift. shift.

T.I.'s T.I.'s

dated dated

production production

figure, figure,

in in

which which

be be

above. above.

Machine Machine

I. I.

high. high.

85 85

also also

I.T.I. I.T.I.

by by

Shop Shop

compared compared

total total

clear clear

always always

Transport Transport

be be

are are

the the

T.I. T.I.

the the

is is

installed installed

has has

single single

be be

the the

shops shops

I. I.

round round

the the

Machine Machine

0/ 0/

would would

in in

conclusion conclusion

as as

quite quite

then then

in in

it it

the the

mentioned mentioned

factory factory

19-TP/4-S8, 19-TP/4-S8,

Assembly Assembly

the the

not not

like like

working working

machines machines

machine machine

is is

and and

power power

Miscellaneous Miscellaneous

the the

at at

Jobbing Jobbing

machines machines

account, account,

lakhs lakhs

taken taken

would would

represents represents

etc. etc.

No. No.

manufactured manufactured

therefore, therefore,

The The

It It

(Milnitry (Milnitry

a a

in in

the the

For For

and and

well well

them them

made made

items items

these these

order order

many many

deter-

by by

as as

extent extent

be be

capacity capacity

by by

as as

in in

conduct conduct

to to

such such

available available

of of

the the

imports, imports,

clearly clearly

that that

all all

produce produce

possible. possible.

capacity capacity

sllrplus sllrplus

to to

on on

for for

as as

should should

first first

surv.::ys surv.::ys

already already

idle idle

this this appointment appointment

improve improve

I.T.I: I.T.I:

3 3

manufactured manufactured

pro:iuction pro:iuction

such such

the the

of of

to to

fields fields

tele-communication tele-communication

I.T.I. I.T.I.

should should

the the

be be

demand demand of of

reco_n:n~nl reco_n:n~nl

the the

machinery machinery

capacity capacity

the the

in in

dependence dependence

the the

enable enable

made made

can can

in in

the the

I.T.I. I.T.I.

the the

of of

survey survey

would would

To To

of of

b:! b:!

unlertake unlertake

suggest suggest

utilisatiell utilisatiell

a a

the the

both both

items items

view view

the the

in in

minimise minimise

Thereafter Thereafter

survay survay

production production

should should

would would

what what

should should

capacity capacity

items items

making making

to to

country. country.

purpose, purpose,

C:l:nnittee C:l:nnittee

ensure ensure

the the

they they

the the

mine mine

keeping keeping

market market

after after

other other

I.T.I. I.T.I.

items. items. to to

and and as as

non-telecommunication non-telecommunication this this

eflbrts eflbrts

ofactual ofactual

Th~ Th~

:I :I

9' 9'

., ., I I Government of a Committee analogous to the in more and more items of components. The ~' Engineering Capacity Survey Committee which machine utilisation figures have ~howna pro- had been appointed by Government some time gressive increase as indicated below:- back. Finally, the I.T.1. should draw up necessary plans for starting manufacturing opera- 1952-53-35%; 1953-54-56%; 1954-55- 82% j tions on the basis of the survey. 1955-56-91%; 1956-57-1120/0;1957-58--1310/0 [Ministry of Transport & Communications O.M. No. 19-TF/(4)-58 dated 12-8-1960].

The Estimates Committee's recommendation regarding the setting up of an Engineering Capacity Survey Committee for the Indian Telephone Industries, was based on the assumption that there was surplus capacity available st the Indian Telephone Industries, which needs to be utilised. &: In the reply furnished by Government to S. No. 4S vide this Ministry's O.M. No. 19-TF/4-S8 dated 12-8-1960, it was explained that the stand- dards of the out-put of the factory were high and that there was a progressive increase in the machine utilisation also. The need fur installing new machines was also indicated there. In view of the position explained there, the necessity of setting up a Committee analogous to the Engi- neering Capacity Survey Committee would not, therefore, arise.

lMinistry of Transport & Communication! O.M. No. 19-TF/(4)-58, dated:u-IQ-1960]. I 2 3 4

4' 97 The Committee recommend that strenuous efforts It may be explained that higher the mechanisation should be made to reduce the overheads to a in a factory, the higher will be the overheads as the reasonable figure and thus to reduce the cost of direct labour utilised will become less and less production. This, they feel can be done by with the increase in mechanisation. No com- increasing production and simultaneously under- parison can, therefore, be drawn between the taking a review of the staff position. In this I.T.I. and P & T. Workshops. Further, the connection they would invite attention to their P. & T. Workshops have no organisation for sales, recomn\endation at S. No. 37 above. purchase and stores-keeping, which work is done by the Chief Controller of Telegraph Stores and and the Office of the Director General, Posts & Telegraphs. Moreover, the I.T.I. has to do the ~ engineering of automatic exchanges while the N P. & T. Workshops are not required to do this work in the case of manual exchanges which they manufacture.

The overheads in the case of 1. T.I. have come down to 500 and a further reduction may be expected now that a scheme of Wage Incentives has also been introduced. It may be further pointed out that the important thing to take into consideration in this matter is the total cost and not the percentage of overheads.

[Ministry of Transport and Communications a.M. No. 19-TF/4-S8, dated 8-3-1960]. t

that

sold

own

have were

other

LT.L O.M.

O.M.

control

that

opinion !Je

out

Commi-

arrange-

associat-

intending the

their

the

preference

equipment

firms the particularly

and

Department

commission.

of is

good

are

importer.

for

Company

best

pointed

present giv{O

selling

high are

Purchase

through

they

gained

rdiable the

the

notice

are have of

the problem.

they

of nc to

very Communications that

orders

national 8-3-1960).

done

the Communicaticns 8-3-1960]. equipment Stores may

the

satisfactorily that

the

work

be and

of & to

abroad

that

the

would

the

the view

dated

but quite

official

out

side

Company with

Directors intimated

arrangement the

example, Indonesian

question

where residing

brought

Transport

of the

has

except

their

imports

Transport

take

for working advantage

the

the possible, pointed

0/ services are

present

as being

Board

their are

19-TF/4-58,

the non-official

enabled

the

nationals

countries

far

forward

I.T.I.

Indonesia

may No.

The

willing

equipment reviewed

No.

ing that Ministries. ttee. over

prefer as particular ments of the nationals,

through

This

[Ministry

The

[Ministry,,/

Indian

for

that

the

------

desi-

Stores

advan-

negotia-

given

very reasonable

associating

possible

Committee

be Committee

with suggest and

be as

the

appointment

purchases

would

------

should

existence

LT.L

adopted

Purchase

should

crores,

LT.I. abroad.

payment

the

be annual

the feasibility

5-3 regards

on the advertisement

the Stores

may the

that

Undertakings.

Committee by preference

resident

the

Rs.

As that

consider

feel

that

the

proper

State

Agents

which

with

fact

Committee

possible

the

find

examined

other

Nationals

suggest

abroad as

amount

feature

Committee

LT.L Committee

far

view

Indian as Purchase

rable LT.L tage

agents would remuneration. non-officials may

the tions

The

100

108/

99/

:t :t

it it

of of

to to

be be

the the

but but

any any

and and

No. No.

sub-

as as

such such

touch touch

deter-

on on

of of

factory factory

can can

number number

of of

lead lead

available available

and and

a a

O.M. O.M.

when when

sources sources

the the

Ministry Ministry

present, present,

market. market.

not not

progressively progressively

to to

achieve achieve

will will

at at

one one

making making

constant constant

at at

is is

limitations limitations

as as

the the

where where

which cannot cannot which

is is

materials materials

to to

in in Factory. Factory.

open open

Committee Committee

dependence dependence

of of

and and

being being

items items

experience experience

is is

happy happy

Tele-Communication Tele-Communication

the the

sevefe sevefe

the the

raw raw

is is

the the

indigenous indigenous a a

able able

present present

from from

in in

the the

type type

and and

Wing Wing

Railways Railways

at at

are are

the the

Communicattons Communicattons

4 4

and and

alternative, alternative,

standards standards

be be

of of

Industries Industries

been been

& &

the the

as as

no no of of

locate locate

sub-contracting sub-contracting

12-8-1960]. 12-8-1960].

made made

Industries Industries

whether whether

special special

there there

will will

materials materials

not not

is is

imported imported

obtained obtained

most most

a a

to to

be be

utilislltion utilislltion

materials materials

Industry Industry

unlike unlike

of of be be

on on

has has

dated dated

results results

raw raw

& &

can can

is is

there there

Transport Transport

Telephone Telephone

raw raw

Development Development

though though

lowering lowering

Further Further

of of

can can

eliminated. eliminated.

doubtful doubtful

efforts efforts

of of

to, to,

machine machine

envisaged envisaged

Telephone Telephone

the the

also also

manufacture manufacture

forecast forecast

Indian Indian

items items

is is

Commerce Commerce

itself. itself.

contracting contracting

mined mined

imports imports

supply supply

dependence dependence

reduced, reduced, with with

no no

agreed agreed

involves involves

lesser lesser

to to

type type

entirely entirely of of

19-TF/4-58, 19-TF/4-58,

commercially commercially

appreciable appreciable

equipment equipment

The The

It It

Indian Indian

[Ministry [Ministry

be be

the the

raw raw

feel feel

plant plant

taken taken

locate locate

better better

of of

Wing. Wing.

of of

bound bound

of of

manu-

on on

present present

suggest suggest

be be

should should

is is

to to

telephone telephone

Telegraph Telegraph

from from

view view

at at

also also

a a

improve improve

made made

obtain obtain

in in

imports imports

should should

to to

Committee Committee

apart apart

other other

to to be be

position position

Committee. Committee.

of of

that that

would would

which which

purchases purchases

indigenous indigenous

measures measures

o,mmittee o,mmittee

of of

the the

appoint appoint

Development Development

also also

the the

(even (even

as as

to to

3 3

sources sources

only. only.

that that

the the

They They

extent extent

that that

etc. etc.

However, However,

well well

encouraged encouraged

cent cent

matters matters

should should

feel feel

the the

Equipment Equipment

concerted concerted

and and

recommend recommend

with with

as as

be be

Equipment Equipment

desirable desirable

per per

decentralised decentralised

I.T.I. I.T.I. use use

these these

indigenous indigenous

of of

be be

more more

sub-contracting sub-contracting

five five

the the

gradually. gradually.

Railway Railway

all all

components components

should should

supplies supplies

to to

regarding regarding

by by

of of

in in

of of

the the

Committee Committee

would would

system system

machinery) machinery)

Telephone Telephone

of of

it it

a a

develop develop

increasing increasing

co-ordination co-ordination

improve improve

The The

position position

equipment, equipment,

materials, materials,

and and

system system

and and in in

An An that that

facturers facturers results results amounts amounts

adopted adopted lines lines quality quality

that that

to to

(i) (i)

(ii) (ii)

2 2

115 115

1 1 52 52 53 119 The Committee would suggest that the need for A common management for the I.T.II and the P. & T. streamlining the organisational set-up ofP. & T. Workshops is not possible because of different Workshops with a view to ensuring greater co- locations, historical background, development, ordination with I.T.I. even if common manage- practices and procedures regarding finance ment for the two be not immediately feasible as operations, staff, etc. Even thdugh both the well as of rationalising the manufacturing opera- organisations are manufacturing concerns, the tions in these units to fit in with the Telephone P. & T. Workshops are meant primarily to cater to Expansion Schemes of the P. & T. Department the needs of the P. & T. Department, and for should be constantly kept in view while making repairs of telegraph and telephone equipment in the reorganisation. use in the P. & T. Department and also to undertake any special jobs of manufacture or installation for the P. & T. in times of emergency. This requires certain amount offtexibility. Even though the Workshops are managed by a separate Board, they are closely linked with the P. & T. Department to ensure maximum co-ordination with that Department. With the formation of the .. P. & T. Board the Workshops Board will function ... as a sub-Board.

In the case of the I.T.I. though the main customers are the P. & T., the Company being the sole manufacturers of Tele-communication equIp- ment 10 the country, has also to meet the demands of other Government Deptts., public bodies and private individuals and firms. The requirements of the P. & T. Department are, no doubt, taken into account by the I.T.I. in fixing the company's production programmes. Otherwise also co-ordination between the Workshops and the I.T.I. is ensured through the Production Co-ordination Committee consisting of representatives of P. & T. Workshops and LT. I. set-up to co-ordinate matters relating to production at the two organisations and to avoid duplication. Further, the Chief Engineer of the P. & T. Department, who is a Director of the LT.!., is also the Chairman.' L of the P. & T. Workshops Board.

[Ministry of Transport & Communications O.M. No. 19-rJ'F/4-58, dated 12-8-1960].

57 129 The Committee would suggest that to facilitate eff- A reference in this connection is invited to D.O. ective co-ordination, the desirability of placing letter No. 1524-MI/58, dated the 3rd August, ~ the Hindustan Cables Limited under the adminis- 1958 from Minister of Industries to the CJ) trative control of the Ministry of Transport and Chainnan of the Estimates Committee. (Appen- Communications (Department of Communica- dix III). tions) should be considered.

[Min.try of Transport & Communications O.M. No. 19-TF/4-58, dated 12-8-1960].

58 13 1 The Committee feel that with better planning it The posmon regarding prOVIsIOn of sub-lines in should be possible to reduce the time lag bet- auto exchanges is as follows;- ween the installation of capacity wad its utilisation considerably, to see that capacity is utilised Ordinarily, as a matter of economic planning prin- simultaneously with its isstallation. They' ciple, the installation of exchange ellluipment recommend that this matter should be carefully is done in blocks. In large exchanges, the examined. increment may be a few thousand lines at a time. In a telephone system, exchange capacity should be provided in advance to meet

1 2 3 4

Here a very large manual system was replaced by 15 new automatic exchanges and the entire area redemarcated. The last manual exchanges were replaced in January, 1958. The rate of giving new connections showed a significant rise after the conversion was' completed. As against about 500 connections per month in 1957, an average of nearly 700 connections have been given in 1958. This is further being stepped up.

(ii) Due to foreign exchange situation there is ~ some difficulty in getting adequate supplies of underground cables. (iii) The work involved in giving new connections is considerable. The size of establishment and organisation for this purpose is, in a normally functioning telephone system, determined by the average rate of giving new connections. Expenditure in wiring and fitting subscribers' premises can be incurred only after the applicants make a definite commitment and pay the charges in advance. It is: therefore, not possible for the Department to start the work at subscribers' premises very much in advance of the actual availability of equipment. On the other hand, the size of establishment and organisation cannot be increased disproportionately to give all possible connections in a very brief period of time, i.e., just before, and after the cut over of exchange equipment. If that is done the establishment would lie idle until the next large instalment of exchange equipment is brought into service. Thus, economy necessitates that even where there is pending demand, the installation of connections is carried out progressively. To the extent possible, delays are of course, reduced. 4. As regards the four specific systems men- $ tioned by the Committee, the figures as on 31-12-1958 are as follows:- System Equipped Estimated Working capacity Connec- connec- table cations pacity' (Appro- ximate)

Calcutta' . 58,210 52,300 46,404- Bombay 42,305 38,100 37,23 1 Madras 12,510 II:300 9,S2.1 Delhi 26,060 23.500 23,696 , 2 3 4

The Bombay exchanges are working practically to full capacity after keeping a reserve for emer- gencies. In Delhi, the safe capacity has already been exceeded and P. & T. have been forced to stop connections in practically all the exchanges. In Calcutta, the rate of giving new connections is being stepped up. In Madras, some capacity has recently been added aad new connections are being given.

[Ministry of Transport & Communications a.M. No. g 19- TF/4-58, dated 8-3-1960].

59 13 2 The aim of the Posts & Telegraphs Department The P. &',T. Department is working on the basis that should clearly be to keep these five elements (as the balancing of the 5 elements in telephone net- stated in para 132 of the Report) in balance rela- works is an ideal which must be aimed at. This tive to each other for any imbalance would result involves coordination of hundred of component in inefficiency either in the form of poor service items. There are severe restrictions encountered or in uneconomic utilisation of capital equipment like paucity of suitable accommodation, limited such as idle capacity etc. financial allocations, difficulties of foreign exchange tending to hold up supply of important items of components, from abroad e.g., underground cables, switch-board cables, power plants, air-conditioning plants etc. The progress in regard to the execution of the Co-axial Cable scheme intendeq to provide for an adequate tnmk service between ail the important clues in the cOlmtry has been slow because of foreign exchange difficulties and the scheme is now being executed only by sections. A balanced and co-ordinated programme also depends on the adequacy of trained personnel The P & T Department has taken note of theie problems and is trying to overcome them as best as possible.

[Ministry of Transport & Communications O. M. No. 19-TF/4-S8 dt. 8-3-1960) Recent assessment indicates that automatic equip- 60 133 The Committee would suggest that the scheme to provide auto Exchanges in replacement of ment is more economical for exchanges with manual Exchanges should be expedited. capacities above 300 lines. Below 300 lines, the automatic equipment would also be cheaper, = provided a trunk circuit is not required to be connected to the exchange. As automatic exchange equipment involves more initial capital expenditure (about three times the manual equipment) and also requires special buildings, it has not been possible to attend to the early large scale conversion of manual systems into auto systems. Further, priority is also required to be given to the extensions of the existing automatic systems over conversion of the manuals into autos, as demands in the existing automatic systems are found to be rising rapidly.

[Ministry of Transport & Communications O.M. No. 19-TF/4-S8 dt. 8-3-1960) I 2 3 ..

62 135 The Committee recommend that the question of With the Federal Financial Integration, the rural restoring the Rural Auto Telephone system in telephone systems in Saurashtra became the pro- Saurashtra, as well as expanding it elsewhere perty of the P. & T. Department.:,:t The P. & T. should be urgently examined. maintain these rural telephone systems but t~e actual cost of maintenance, including repatrs and renewals, is being recovered from the State Government. Recently, the rural telephone systems were renovated at a cost of nearly Rs. 9 1akhs. These rural telephone systems are operated by the State Government. It is understood that the Bombay Government have not found these systems to be remunerative and they have appointed .~ . a Committee to go into the working of these systems and the report of this Committee and the decision of the Bombay Government are awaited. 2. The question of replacing any of the exchanges in the rural network by automatic exchanges was not taken up at Hny stage and it is not also proposed to take up this question unless asked by the State Government as they will have to bear the cost. Except in two towns, Bhavnagar and Porbander, the entire system consisted of only magnets telephone exchanges and single wire earth retUrn circuits. The automatic telephone exchange at Porbander was old and had to be replaced by a manual board with trunk facilities.The automatic exchange at Bhavanagar had suffered damage by tire and had to be replaced by a manual board with trunk facilities. Considering the importance of Bhavnagar the Department has already approved of the replacement of the existing Bhavnagar Manual system by a 1000 lines automatic exchange. This Automatic Exchange system is likely to be cut into service by about 1961-62. In a number of places where rural telephone exchanges exist long distance public call offices have been opened to provide access for the people to the general trunk system. Since the time of taking over of the rural systems by the P. & T., no portion of these rural systems has been abandoned or closed. 3. Apart from the rural system which was taken over from the State Government, there was another telephone system in Halar District in Nawa- nagar State which was purchased by the Depart- == ment in 1961 from the Nawanagar Electric Supply Company Ltd. This consisted of 2 urban exchanges at Jamnagar connected to II magneto exchanges at various places in the District. This entire rural system consisted of earth return ! circuits and magneto switch boards. None of these exchanges were automatic exchanges.' fJ .... So far as the urban exchanges at Jamnagar were concerned, the system was modernised and replaced by a C.B. system some time in 1954 and was connected to the general trunk network. The rural magneto exchanges were, however, allowed to remain connected to this C.B. exchange system at Jamnagar. This rural system I 2 3 4

is not at all remunerative to the Department. The matter was discussed with the earstwhile Government of Saurashtra and with the approval of that Government it was decided that this system in Halar District,will be departmentalised that is, departmental public call offices connected to the trunk network will be opened at all the places where rural magneto exchanges exist and the exchange connections from these rural exchanges will be transferred to the public call Offices as PCO extensions. P. & T. have already opened 3 PCOs according to the Scheme and the ~. proposals for opening PCO(at 3 other pieces have been approved. ~;'

5. It will thus be seen that" while the P. & T. Depart- ment has every intention to modernise this rural Halar telephone system as well, there is no intention on the part of the department to shut down any of these systems if modernisation cannot be brought out immediately. P. & T. have at present no plan to open any rural aut0matit exchanges in any of these places as such exchanges cannot be financially justified. Installa- tion of rural automatic exchanges in replacement of eXisting exchanges will depend upon the traffic and financial justification of each case and the concurrence of the State Government in so far ,as the systems operated by them are concerned. However, the Department has not and is not considering the abandonment of the _,rutal K telephone networks'" at present. 6. The"'rural telephone system ot the type obtaining ~in Saurashtra has very limited local useful- ness and is unsuited for being connected with the National Trunk system. These systems cannot, therefore, form a model for the P. & T. Depart- ment's expansion programme of telephone facilities to small towns and rural areas where the trunk call facility is quite important. 7. The Department has all along been keen on extending telephone facilities to the rural and undeveloped areas. Wherever justified, P.C.Os.g: with trunk facility or small telephone exchanges of the automatic or manual type are being provided. The policies with regard to the expansion of telephone facilities in the rural and undeveloped areas have been liberalised so that telephone exchange facilities at the District headquarters towns and P.C.O. facilities at Sub-divisional and tehsil headquarter stations (including corresponding units in the States of Bihar, Orissa and West Bengal which have no tehsils in their administrative set up) can be provided on a loss basis provided the aggregate loss is kept within -certain specific limits. In addition, it has been decided that during the Second Plan) 100 P.C.Os. should be opened in remote localities I 2 3 -4

which are far away from the existlni telephone net-work. The following figures will1.indicate the progress made in th.i8 direction:-

As on As on As on 31-8- 1951 31-12- 31-12-1958 i.e. begin- . 1957 Ding of the Pint Plan. !

Public Call QffiCe8 338 I,SS-4 I,'P3 Telephone Ex- changes. 464 981 1,01S1 (Ministry oJ Transpor, and CommsmicGlionsO.M. No. Ig-TF/4-58, dl. 8-3-1g(0).

66 145/146 The Committee {eel that in an industrial and In para 70, it has been observed that the increase commercial undertaking it should be possible to does not compare unfavourably with the increase control increases in man power especially when in the actual production (that is Indian Tele- the overheads are high. They recommend that phone Industries' effort). The Staff utilised in vigorous and determined attempts should be the factory is kept at the minimum and any in- made to control staff 8tren&th and to correlate it crease in the itaff is allowed only after a detailed with production. examination and full jU8tification. It will be observed from the Chart at Appendix It furnished in reply to para 70 of the report that the overheads and other expenses are rising at a Ilower rate than production. It will also be seen from the reply furnished to para 70 of the Report that the rise in the proportion of salaries and wages is higher than in the case of the total revenue expenditure. It has also been stated in the sam~ paragraph that the increases in the salaries and wages do not compare unfavourably with the I.T.I.'. efforts. __"l .; (Ministry of Transport and Cormmmicatiom O. M. No. Ig-TFI4-S8 dt. 8-3-1960). 67 148/149 (.) The Committee consider the abnormal increase (i) The increase in non-supervisory/factory staff, of Fru.:tory staff without corresponding increase provided it is not disproportionate with the in- in production an indication that the productivity crease in production, is not an unhealthy sign in of labour has been on the decline in the I.T.I. an industry. As indicated in paragraph 70 of the !I They recommend that the management should Report, the increase in salaries and wages of staff live urgent attention to this problem. For this is not incommensurate with the increase in pro- purpose) the Committee would suggest that a duction. Detailed job analysis and proper time detailed job analysis and proper time and motion and motion studies have already been conducted ltudy be undertaken immediately in the various in the I.T.I. and all this information is available shops in the I.T.I. since only then can the opti- for each job, small or big, and the factory strength mum efficiency of an operative business be mea- is sanctioned on the basis of this information. lured. Incentive Scheme has also been introduced on the basis of this information with effect from June, 19S8. (i,) Since the present system of fixing standards in (i.) As explained above, the staff strength is effec- the I.T.I. has not succeeded in effectively con- tively controlled, based on proper job analysil trolling staff strength the Committee would re- and tim~and motion study. commend a review of the methods adopted. (Ministry of Transport and Commrmications O.M. No. 19-TF/4-S8 dt. 8-3-1960). I 2 3 4

74 162 While the committee appreciate the welfare measures The present arrangement is working very well. In existing in the I.T.I. they would suggest that the fact, the Co-operative Society was running the I.T.I. should consider the desirability of creating Canteen in the Factory and the Stores in the a separate Welfare Fund to be managed by a Township. Due to mismanagement, this Society Committee consisting of workers only. incurred heavy losses and at the insistent request of the workers, the Management had to take over the working of this Society. In view of the past experience it is not considered desirable to have a welfare fund managed entirely by a Committee consisting of workers only. However, as has been mentioned by the Committee in para 160 _. of the report, the employees are encouraged to '0 'i: take more and more responsibility by associating them with the Managing Committee of the various Clubs and Societies. (Ministry of Transport and Communicatio1ulO.M. No. 19-TFI4-S8, dt. 8-3-1960).

75 163 The Committee would suggest that the proposal The nurrtber of buses hired from the Hindustan to buy more buses should be carefully examined Aircraft Ltd. has been reduced from 24 to 13. by the I.T.I. especially, when transport facility However due to the fact that the charges for bus is causing a heavy recurring financial loss to the hire had to be reduced in view of the reduction I.T.I. In this connection they would suggest that effected in the Hindustan Aircraft, the amount of the feasibility of having a common pool of trans- subsidy for transport has gone up. port for all the Government concerns in Bangalore or some of them located in neighbouring localities The suggestion regarding having a common pool of ~hc;>ql~be ~nsi~er~4! transport is difficult to implement as the F~ori~ are situated (ar from each other. For example, Hindusthan Machine Tools is about IS miles (rom I.T.I. and on the other side of the City. Another difficulty is about the timings. With a common pool, the factories will have to stagger the timings with the result that some factories will have to observe inconvenient timings which would lead to considerable dissatisfaction amonglt the workers. However, the transport is co-ordinated as (ar as possible and at present I.T.I. are taking 13 buses from Hindustan Aircraft and in return giving them 19 buses. Considering that I.T.I.'s fleet numbers only 24, this figures is very good.

(Ministry of Transport and Communications O. M. IS No. 19-TFI4-S8, dt. 8-3-1960).

32 173 The Committee desire that their suggestion for a The suggestion to have joint training classes for the joint training scheme for I.T.I. and P. & T. I.T.I. and the P. & T. Department has been exa- should be expeditiously examined by Govern- mined. It is seen that the Type of training given ment. to P. & T. personnel is purely on the operating and maintenance side of equipment, whereas for the I.T.I. it relates to production, methods and design. The scope of training for these two categories does not in any way overlap and it is therefore, felt that having Joint training classes will not be beneficial. (Ministry of Tramport and Communications O.M. No. 19-TFI4-S8 dl. 12-8-1960) CHAPTBR IV REPLIES OF GOVERNMENT THAT HAVE NOT BEEN ACCEPTED BY THE COMMITTEE

S.No. (as in Reference Summary of Recommendations/ Reply of the Government Comments Appendix V to Para- Conclusions to the tIth graph No. Report) of the Report

I 2 3 4 5 g

I 7 The Committee feel that it would While this Ministry do not entire- The Committee truSt that have been advantageous to get ly agree with the view that Government shall, in future, a project report from the these initial difficulties would ensure that a Project Report is A.T.E. not merely to serve have been altogether elimina- invariably obtained from the as a short term and long- ted if there has been a Project Collaborators before launching term plan but also as a means Report, they agree that similar upon any project. of watching and judging the difficulties arising in future progress made from time to in the operation of the Agree- time and that in its absence it ment should be settled by is somewhat difficult to make a mutual discussion between the correct assessment of the Indian Telephone Industries actual progress. and the Automatic Telephone & Electric Co. Ltd., The Min- istry feel that if there had been a Project Report from the very beginning, this probably would have led to purchase of Plant and Machinery mach in excess of that actually purchased in the absence of any Project Report, since, in that case, Indian Telephone· Industries would have ordered all plant and machinery on the basis of the Project Report. The estimated requirements of Plant and machinery given by the Automatic Telephone & Electric Co. Ltd., in the Report would not have been different from those which they gave to the Indian Telephone 0\ Industries for the purpose. ... As pointed out earlier, Indian Telephone Industries departed from Automatic Telephone & Electric Co.'s advice and ordered machinery according to its requirements as it gained experience of the Factory. (Ministry of Transport and Com munications, O.M. No. I9-TP/ 4-58, dated 12-8-1960).

7 24 It would appear that the actual While it is admitted that the The Committee are surprised that production in the !.T.!. has estimate of Rs. 87 lakbs on important matters like the proce- 1 ~ 3 .... S -.------fallen short of that contem- account of payment to be made dure of calculation of royalty plated at the time of the to the Automatic Telephone and total amount to be paid Agreement. The Committee & Electric Co. Ltd., during the therefor should have been left therefore, feel that there is no course of IS years under undecided while finalising the reason to feel complacent in clauses 13(a), (b) and (c) of the agreement. The fact that the regard to the progress made by Agreement has proved to be estimate of Rs. 87 lakhs haa the I.T.I. so far. They reco- very much on the high side, proved to be excessive also mmend that this matter may be the Ministry are unable to indicates that adequate thought re-examined by the Mana- agree with the conclusion that was not given to the question ,ement. this is due to short fall in the in working out the details on production as originally esti- the agreement. The Commit- mated. The exact procedure tee trust that greater care would for the calculation of royalty be exercised by Government had not been finalised at the in such matters in future. AI 2- time of framing of the original the agreement with the A.T.B. estimates which were, there- is due to expire in 1963, the fore, based on rough calcula- Committee would like the tions. It may be pointed out Government to settle their that the I. T. 1. has been accounts with the firm ex- closely keeping to the peditiously. production targets set for it from time to time. The original production targets set for I.T.I. were 25,000 telephone instruments and 20,000 exchange lines per year. These targets were very much exceeded in 1954-55 and since then production hu been on the increase. The actual production figures for the year 1957-58 were in excess of 60,000 telephone and 43,700 exchange lines, and for 1958-59 they have been more than 84,000 telephones and 51,000 exchange lines. The !.T.!. has also been gradually taking up other lines of manufacture which were not thought of at the time when the estimates were framed; for example. manufacture of Transmission Equipment. An inference drawn regarding production on the basil of 0\ figures relating to royalty pay- w able to the A.T.E. will. therefore. the erroneous and it would be desirable to go by quantitative production, i.e. actual volume of production of the different items of .equip- t ment manufactured in the !.T .1. (Ministry of Transpor! & Com-J munications O.M.No. 19-TP-41 58 dated 8-3-1960)

10 30 The Committee recommend that The Indian Telephone Indus - The Committee would reiterate early action be taken to ap- tries was established primarily the recoIIUllendation made in I 2 3 4 s

point a Chairman with requi- to meet the requirements of para 6 of their 19th Report site qualifications and apti- the Posts & Telegraphs Servi- (2nd Lok Sabha). tude who holds no post in the ces. It was, therefore, consi- Secretariat or has served his dered that the Secretary of the connection with the adminis - Ministry of Communications, tration. They would further would be in the best position, suggest that persons with busi- as Chairman of the I.T.I. to ness experience who might secure for the Company the have no interests in private required amount of co-opera- undertakings and also persons tion and co-ordination from of experience in financial mat- the P. &T. Department. Go- ters and in telecommunica - vernment have already infor- don engineering should be as- med the Estimates Committee sociated with the Board in in reply to the general ques:' terms with the recommendation raised by the Committee .: tions contained in the Com- in its Sixteenth Report that mittee's Sixteenth Report. (1St as sufficient experience1 has Lok Sabha.) To the extent not been gained with the work- possible, they could also act as ing of the present system, they functional advisers in various proposed to continue the sys- Iilatters and provide technical temfor some more time before services in the fields of pro- reviewing it. duction, performance, mea- Pl~ surement, etc. ~t1 It will also have to be pointed outl that there are at present two non-official Directors on the Board who have been appointed on the basis of their Industri.t experience. As far

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37 37 13 13 I 2 3 ... s

ments in the I.T.I. at least in other Government under- officer) with the help of one e.g., the Transmission and takings, particularly those at General Manager should not be Engineering Departments to Bangalore. Although one of able to look after the whole work function directly under the the officers has been designated ofI.T.I. Nowthatthe Govern- Managing Director, especially as General Manager and ano- ment have placed the head of since the present incumbent is ther officer as Manager ( this the Transmission Research De- himself a technical officer, designation has si11ce been partment under the managing while the General Manager changed to Joint General Director. One General might control the other im - Manager without any change Manager can reasonably be portant Departments. Under in his duties and responsibilit- expected to coordinate the work this arrangement, it might be ies or emoluments), there is no of about a dozen Heads of the possible to abolish the post overlapping of responsibility Departments of the Co. of Manager. The Committee between them as they are in- Further the practice of having would recommend that the or- charge of separate departments a Joint General Manager also ~ ganisational set up of the I. of the factory. The Manag- seems to be a special feature T.I. should be reviewed in the ing Director is in overall char- of the I.T.I. For these reasons light of the above remarks, as ge of the entire factory and it and those given in para 37 of the well as of the position obtain- will not be possible for him to 11th Report (2nd Lok Sabha) ing in modern undertakings undertake direct responsibility the Committee reiterate their elsewhere. for some of the departments at recommendation. present coming under the control of the Joint General Manager (previously called Manager) or the General Manager. Some re-organisation has, however, been effected under which the head of the Transmission Research Department hu been placed directly under the Managing Director.

0\ .....;j 1-4 38 To ensure better coordination, It is not clear why the I.T.I. Ltd., the Committee would suggest should find it djfficult to form the formation of a Board of a Board of Maf'agement Of' the Management as in the H.A.L., lines of H.A.L. and B E. etc. consisting of the Manag- The ComtT1ittee reiterate their . ing Director and Senior Offi- recommendation. cers of the I.T.I. to assist the Managif'g Director in the exercise of his powers, functions and responsibilities not in an informal manner but by holding meetings at regular in~ tervals maintaining records of proceedings, etc. In this connection, they might mention --,-

1 2 3 4 5

that the practice of having Boards of Management which It is understood that in the involves collective and to that Hindustan Aircraft Ltd., also, extent considered decision- the Board of Management is making and encourages joint largely an advisory body responsibility among senior and the present system of the officers, has become extensive Indian Telephone Irdustries, in most enterprises. under which the Managing Director convenes weekly meetings of Heads of Depart- ments to discuss individual problems of the various de- 0\ partments substantially ser- 00 ves the same purpose.

(Ministry of Transport & Com munications O.M No. 19/TF/ 4-58, dated 8-3-1960).

19 50 The Committee feel that the The requirements of the various If a Sub-Committee is constituted present system of having diff- departments have practically for each of the USer depart- erent Co-ordinatIon Commit- little in common. The rail- ments, the Main Committee tees and procedures for P & T ways are interested mostly in can deal with certain common Railways and Defence is not Control Equipment and the problems of all depart- quite sati5factory. They, requirements of the Defence ments. Such a procedure the therefore, feel that a better Ministry are also peculiar to Committee hope will go a long arrangement might be to have them. In fact, the Defence way in ensuring better coordi- one co-ordination Committee authorities have asked. that nation between the varioU$ with 3 to 4 Sub-Committees the assembly of their equip - users departments. The Com- each dealing with the require- ment should be separated from mittee therefore reiterate their ments of different User Dep- the general equipment. A recommendation. ,artments and also a small offi- Common coordination com- ce since that might ensure a mittee for all these depart- closer co-ordination in pro- ments with 3 or 4 sub-com- duction as well as in research mittees will be a very un- programmes between the I.T.I. wieldy affair. It would also on the one hand and the be most difficult to fix suitable different user departments on dates of the meetings to suit the other. the convenience of all the three departments. Since all these departments are interested in different types of equipment, their interests are best served by having separate co-ordination committees for g. them. (Ministry of Transport & Com m.micatimu O.M. No. 19/TF/ 4-58: dated 8-3-1960)·

32 67 In respect of arrears of pay - The question of clearing the out- Though about 3 years have pas- ments, due to LT.I. from standings in the case of Rail - sed, the position regarding out· Railways and Defence, the ways and Defence is also being standings has not improved Comnuttee would suggest that pursued very actively. Both which is regretful. The Com- the existing procedure followed these departments are being mittee recommend that the in the case of P .&T. together persuaded to agree to 100% matter regarding the clearing of with the above suggestions payment on receipt of proof outstandings from the Rlys. I 2 3 4 s

---.,------~------should be made applicable in of despatch on the lines of the and Defence and 100% pay- their case also and that the ne- agreement reached with the ment to I.T.I. on receipt of the cessary discussions for the Posts & Telegraphs Depart- proof of Despatch in future purpose be undertaken imIne - ment. be taken up at higher level for diately. an early decision. (Ministry of Trmuport & Com munications O.M. No. 19-TF/ 4-58, dated 8-3-1960).

33 68 The Committee observe from the In view of the assurances given Charging of interest on late pay- terms and conditions of sup- by the Departments and the ment of Bills is usual business ply that no interest is levied by instructions issued by them to practice. The I.T.I. should ~ the I.T.I. on delayed pay- subordinate units and the eff- introduce such a charge, more ments on account of supplies orts being made to secure 100% so because it has to pay interest of goods etc. They would payment on proof of des- to State Bank of India, on its suggest that the desirability of patch, it is not considered ne- cash-credits, some of which it levying a charge of this nature cessary to press for the pay- can be said are necessitated by in accordance with normal ment of interest charges on non-payment of Bills in time. commercial practice should be the outstanding dues. The Committee reiterate their considered. recommendation.

38 77 (i) The Committee recommend The Committee's recommenda- The Committee understand that that the entire system of action for the setting up of an an Expert Committee has been counting-financial, cost and expert Committee to go into appointed by Government to store-should be urgently got the system of accounting- look into the various aspects of ~~ afresh b>, an expert finance, and stores~-inI!ll the ~ccounting.They woul~ the; .. team especially to be set up State Undertakings with Ii refore suggest that this Con1~ for the pUrPose. view of making it fool-proof mittee may keep this recom- and achieving standardisation mendation of Estimates Com- (ii) Incidentally the Committee of accounting procedures to mittee in view. would observe that during the the extent possible, was examination of various State brought to the notice of the undertakings they invariably Ministry of Finance, who found that the costing system have since sent a reply to the followed by them was not al- Lok Sabha Secretariat (Es- ways what it should be in a timates Committee) vide their commercial and industrial un - Office Memorandum No. 2(1) dertaking. They therefore, -P.C./59, dated the loth June, suggest that the Government 1959-(Appendix IV). should urgently consider the setting up of an expert Com- (Minimy of Transport & Com mittee to go into the system of munications O.M. No. 19-TF/ Accounting-Finance, Cost 4-58, dated 12-8-1960).

and Stores-in all the State -....J Undertakings with a view to .. making it fool-proof and achieving standardisation of Ac- counting Procedure, to the extent possible, at least in all manufacturing units.

69 153 The Committee consider that the This matter has been very care -' The Committee hope that Gov- real reasons for the large num- fully investigated by LT.L ernment will devise suitable ber of resignations in the and it has been found that measures to make the terms of I.T.I. should be carefully in- the main reason is that the sca- appointment of technical per- vestigated with particular ref- les of pay in the LT.L do not sonnel in the LT.l more attrac- erence to the conditions of compare favourably with those tive. 1 z 3 4 s

service enjoyed by the person- in force elsewhere, particularly nel and remedial measures ta- in Bangalore. ken to the extent possible so as to avoid recruitment and (Ministry of Transport & Com personnel difficulties. They munications O:M. No. 19-TF/ would also suggest that other 4-58, dated 8-3-1960). Central Government Un- dertakings at Banploreand represallatiyes of staff might be asSQciatedwith this inves- tigation.

-...J.., CHAPTBR V RECOMMENDATIONS ON WHICH FINAL REPLIES OF THE GOVERNMENT ARE STILL AWAITED

s. No. as in Ref~nce Appendix V . to Para- SUmmary of Recommendations/Conclusions Reply of Government to the lIth graph Report No. of the Report

-....I W

40 80 The Committee would suggest that the justifica- The matter is under consideration with Comptroller tions of a separate cost check staff maintained and Auditor General of India.! by the P. & T. at the I.T.I. might be examined by the Ministry of Transport & Communica- (Ministry of Traniport & Communications O.M. No tions (Department of Communications) in I9-TF/4-S8 datedS-Io-IC)60) consultation with the Ministry of Finance and the Comptroller and Auditor-General of In- dia. .

NEW DELHI; H. C. DASAPPA, January 17, 1961. Chairman, Pa,"sa 27, 1882 (Saka) Estimat~sCommittee, APPENDIX I (Vide S. No. 39 Chapter IT) No. 1 (14 )-CL.VI/59

GoVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY (Department-of Company Law Administration) Reserve Bank Building, Parliament Street, New Delhi-I, the 16th April, 1959/Chaitra, 1881 OFFICE MEMORANDUM

~SuB.TECT: Government companies-annual reports to be placed before Parliament-section 639 of the Companies Act, 1956.

The undersigned is directed to invite a reference to paragraph 4

2. The National Coal Board, U.K., in its report for the year 1955, the pattern of which has been commended by the Estimates Committee has furnished details under the following heads:- (i) Results of the year, financial and production, etc.; (ii) Demand and distribution e.g., position and prospects of imports and exports, consumption of coal, etc.; (iii) Technical progress e.g., research works, techniques of management, mechanisation, etc.; (iv) Organisation e.g., general and policy of management; (v) Men in industry e.g., Manpower, welfare works, training schemes, conditions of service, etc.; (vi) Summarised financial results for the year i.e., the annual accounts with the necessary schedules, etc.; (vii) Statistical tables and graphs indicating- (a) output of coal; (b) output per man hour; (c) number of wage earners on the books; (d) percentage of absentees; (e) average number of shifts per man; (f) age distribution of men on the books; (g) fatal and reportable accidents; (h) consumption and stock. of coal: (i) average earnings etc. While the Administrative Ministries will no doubt consider in due course to what extent and in what manner the pattefR of the annual reports of the nationalised undertakings in the u.K. can be followed in this country, this Department would suggest that having regard to the fact that information on many aspects of the· working of public wndertakings registered as companies under the Companies Act, 1956 would be already available in their balance sheets and profit and loss accounts and their Directors' Reports, the Annual Report required to be submitted by the Administrative Ministry concerned for submis- si@n to Parliament under Section 639 of the Companies Act may ,contain only such additional information as may supplement the 76 information already available in the aforesaid documents. The precise form and content of this Annual Report would, therefore, vary not only from industry to industry but also from company to company and it may be diOicult to prescriPe a standard form for such Reports. Nevertheless having regard to oft-expressed desire in Parliament, as evinced by the latest recommendations of the Estimates Committee for mller information about the working of Government companies, this Department would stress the need for making the Annual Reports prepared by the Ministries on Government Companies in accordance with the provisions of section 639 of the Companies Act, 1956 as informative as possible so as to render the financial accounts of these Companies more intelligible and meaningful to the public in the con- text of their management policy. In this connection, this Department trusts that the pamphlet (Annual company reports--Simplified Presen- tation of Statutory Accounts) already circulated to Government companies and the suggestion of the Director of Commercial Audit in regard to the desirability of preparation of manufacturing accounts l\'hich had been brought to the notice of all Administrative Ministries in this Department Office Memorandum No. 1(1l)CL-VIIj59 dated the 30th March, 1959 will facilitate the supply of the requisite additional information by Government in a form and manner which would highlight the more significant aspects of their. operations and render them more readily intelligible to outsiders.

T. S. MENON, Under Secretary to the Govt. of [ndill, To

All Ministries of the Govt. of I.d~. APPENDIX m (Vide S. No. 57 Chapter III) No. 1524-MI/58 MINISTER OF INDUSTRY Now Delhi, 3rd & 4th August, 195!L My dear Shri Balwantbhai, In the Eleventh Report of the Estimates Committee for the year 1957-58 on the Ministry of Transport and Communications, the Esti- mates Committee had suggested that, to facilitate effective coordination, the desirability of placing the Hindustan Cables (P) Ltd. under the administrative control of the Ministry of Transport and Communi- cations (Department of Communications) should be considererd. "This question as to which Ministry should exercise administrative control over a particular factory or industrial project was very carefully gone into early last year in connection with the reorganization of the scope of some Ministries and the view was taken then that, excepting where special considerations come into force, as in the case of some projects like Hindustan Aircrafts under the Defence Ministry or the Hindustan Steels under the Ministry of Steel, Mines and Fuel, all Government industrial projects should be generally under the Com- merce and Industry Ministry, in view of their basic importance as Government managed industries and also to facilitate integrated development in different public sector projects."

It may also be pointed out, in this connection, that Hindustan Cables is not the only case where the administrative control vests in this Ministry, while the consumer Ministry is another viz., Transport &: Communications Ministry. I will give two more examples to illustrate this point. The D.D.T. factory and the Pencillin Factory at Pimpri are also under the control of this Ministry, while the consumers art' different. Again, in the case of fertilisers, both the Sindri and Nangal Fertilisers are under this Ministry, though their entire production is supplied to the Fertiliser Pool administered by the Food and Agri- culture Ministry. In all these cases, the principle accepted is that, in 1Iegard to the technical and production management of the factories, the Commerce & Industry Ministry would be the most suitable administrative authority and the necessary close liaison will be maintained with the consumer interests, the Ministries and the private sector industries so as to ensure effective coordination in respect of both current production and future planning. 80 Coming back to the specific case of Hindustan Cables, I can assure you that the requirements of the Department of Communications are fully taken into account in planning for the expansion of this factory and also other possibilities of internal and export markets, if possible. Apart from there being the Representative of the Post & Telegraph Department on the Board of Directors, the present Managing Director of the Company is also an officer of that Department. There is besides an independent officer of that Department for testing the quality of product. All these arrangements together serve to ensure effective . coordination in actual administration. I trust, that, in the light of these facts, you may agree that it is not necessary to consider any further the question of transfer of administrative control from this Ministry to the Department of Com- munications. The Ministry of Communications has also considered this matter and concurs with the above view. With kindest regards. Yours sincerely, Sd. MANUBHAI SHAH APPENDIX IV (Vide S. No. 38 Chapter IV) No. 2(1)-P.C./59 GOVERNMENT OF INDIA MINISTRY OF FINANCE (Project Coordination Cell) N~w Delhi, the 10th June, 1959 OFFICE MEMORANDUM

SUBJECT: Eleventh Report of the Estimates Committee (1957-58) on the Indian Telephone Industries.

The undersigned is directed to refer to para 77 of the 11 th Report of the Estimates Committee (1957-58) recommending that- "The entire system of accounting-financial cost and stores- should be urgently got examined afresh by an expert team specially to be set up for the purpose. Incidentally the Committee would observe that during the examination of various State Undertakings they invariably found that the costing system followed by them was not always what it should be in a commercial and industrial undertakings. Therefore, they suggested that Govern- ment should urgently consider the setting up of an export committee to go into the system of accounting. finance cost and stores-in all the State Undertakings with a view to making it fool proof and achieving standardisation of accounting procedure to the extent possible at least in all manufacturing units." 2. As regards the system of financial accounting, in the case of public undertakings which are governed by the provisions of the Com- panies Act, they are required to maintain their balance sheet and profit and loss accounts in accordance with the provisions of sub-sections (1) and (2) of section 211 of the Companies Act, 1956 and under section 619 (3) (b) ibid, it is open to the Comptroller and Auditor General to prescribe the forms in which information required by him for conducting supplementary or test audit should be furnished. In the case of statutory corporations like Damodar Valley Corporation, Air India International, Air Lines Corporation, Delhi Road Transport Authority otc. the form of their accounts is regulated by the provisioIa II .of the acts or the rules made thereunder and they are also subject to audit by the COOlptroller and Auditor-General. In the case of Gov- ernment Company Undertakings which are run departmentally such as Railways, P. & T. etc. their accounts enter int9 the formal accounts of Government and the form of such accounts is prescribed by the Comptroller & Auditor-General with the approval of the President under the provisions of Article 150 of the Constitution. It is consider- .ed that a broad pattern of accounts for giving an accurate picture of financial results exists already in each type of undertaking and improvements could be introduced as experience is gained in individual cases. In view of the recommendation of the Tax~tion Enquiry Com- mission in paragraph 33 of Chapter X, Volume I of their report, viz., that greater measure of uniformity in accounting procedure of different State Undertakings should be secured, the Comptroller and Auditor- General has enjoined on his inspecting officers to keep these views in mind and to suggest improvements wherever necessary.

3. With regard to the system of cost accounting, as the Estimates Committee are aware, in para 121 of 39th Report (1956-57), it was recommended that the responsibility of laying down a system of cost and periodical reviews should be entrusted to a centralised authority, viz., the Cost Accounts Branch in the Ministry of Finance. The views of this Ministry on this recommendation were communicated to the Lok Sabha Secretariat in this Ministry's O.M. No. F. 15 (25)-EII (A) / 56 dated the 1st of April, 1959. In the latest report of the Estimates Committee on Ministry of Finance (Department of Expenditure), the views of this Ministry contained in the O.M. referred to above have been taken into account and one of the revised recommendations of the Committee is that the Ministry of Finance might draw up a programme so as to complete one round of examination of c~st accounting systems of the various public undertakings in as short a period as possible. This, along with other recommendations, is being examined and a further communication will be sent to the Estimates Committe~. Sd. K. L. GHEI, Joint Secretary to the Govt. of India. To The Lok Sabha Secretariat. APPENDIK V Analysis of the action taken by Gov.ernment on the recommendations contained in. the Eleventh Report of the Estimates Committee (Second Lok Sabha). 1. Total number of recommendatiolYl 83 2. Recommendations accepted by Government 44t Percentage of total 53.' 3. Recommendations not accepted by the Gov- ernment but replies in respect of which hne been accepted by the Committee 27t Percentage of total 33.1 ~. Recommendations not accepted by Gov- ernment (including those which are iltill under consideration by Government). No. 11 Percentage to total 13.3 LIST OF AUTHORISED AGENTS FOR THE SALE OF PARLIAMENTARY PUBLICATIONS OF THE LOK SABHA SECRETARIAT, NEW DELHI-I Agency Name and Addross Agency Name and Address Agency Name and Address No. of the Agent No. of the Agent No. of the Agent

I. Jain Book Agency, Con- 20. The English Book Store, 37. Amar Kitab Ghar, Dia- naught Place, New Delhi. 7-L, Conn aUght Circus, gonal Road, Jamahed- . . New Delhi. pUr-I. 2. Kltablstan, I7-A, Kamla . Nehru Road, Allahabad. 21. Rama Krishna & Sons, 38. AUled Traders, Motia . . 16-B, Connaught Place, Park, Bhopal. 3. Brlusb Book Depot, New Delhi . 84 HazratganJ', Luc- • 39· E.M. Gopa1krishna Kone, , (Sbri Gopal Mahal) krow. 22. IntC?rnationalBookHouse, North Chitrai Street, 4. Imperial Book Depot, Private Ltd., 9, Ash Madura. 268 Main Street Poona Lane, BombaY-I. F' nd Boo ~ 40. ne a . k Houae, p 23. Lakshmi Book Store, M.U., Aligarh. 5. ThePopular Book Depot 42, M. M. QueenswaY,4I. Modern Book House, ~egd.), LamingtonRoad, New Delhi. 286, Jawabar GaIIj, BombaY-7. Jabalpur. 6. H. Venkataramiah & 24· ~iJ:~~br_;~blishers, 42· M.C. Sarkar ~ Sona (P) Sons Vidyanidhi Book Ltd., 14, Bankim Chat- De~, New StatUe 25· S K Brothers, I5A/05, terji Street Calcutta- Circle, Mysore. WEA, Karol Bagh, New 12. . Delhi-5 43. People'a Book HOUSe' 7· International Book House B 8 / N' Shah' Main Road, TrivandruJn. 26. The International Book -2- 29 I, lZam I . Service, Deccan Gym- Road, Hydembad-I. 8. The Presidency Book khana, Poona-4. Supplies, 8-C, Pycroft 44. W. Newman & Co- Road, Triplicane, Mad- 27. Babri Brothers, 188, Ltd., 3, Old Court ras-5· Lajp~t Rai Market, House, Street, Calcutta. 9. Atma Ram & Sons, Delhl-6. 45. Thacker Spink & Co. K hm G t D lh' (1938) Private Ltd., 6.as ere a e, e 1- 28. City BOOk-sellers, Soban- 3, Esplanade East, ganj Street. Delhi. Calcutta-I. 10. Book Centre, Opp. . 46. Hindustan Diary Publi- Patna College, Patna. 29. The N wonal Law ~ouse, shers, Market Street, . B oth Near Indore Library, Secunderabad. II. J.M. Jama & r ers, Indore. Mori Gate, Delhi-6. 47. Laxami Narain Aggarwar 12. The Cuttack Law Times Hospital Road, Agra. Office, Cuttack-2. 30• Charles Lambert & Co.! 48. Law Book Co., Sardar 101, Mahatma Gandhi Patel Marg Allahabad. Road, Opp. Clock ' 13· The New Book Depot, Tower, Fort, Bombay D B T ala & Connaught Place, New • 49· .. araporev Delhi. 31. A.H. Wheeler & Co., (P) Sons Co. Priv~e Ltd. Ltd. 15, Elgin Road, 210, Dr NaoroJI Road, 14. The New Book Depot, Allahabad. BombaY-I. 79, The Mall, Simla· 32. M.S.R. Murthy & Co., So. Chanderkant Chiman IS. The Central News Agen- Visakhapatnam. Lal Vora, Gandh cy, 23/90, ·Connaught Th Lo al B k D Road, Ahmedabad. Circus, New Delhi. 33· e .. y 00 epon, Chhipi Tank, Meerut. 51. S. Krishnaswami & Co., 16. Lok Milap, Distri- P.O. Teppakulam, ct Court Re.d, Bhavnagar. 34. The Good ~ompanion, Tiruchirapalli-2. Baroda. 17. Reeves & Co. 29, Park 52. Hyderabad Book Depot, Street Calcutta-16 35. University Publishers, Abid Road (Gun 18. The New Book Depot, Railway Road, Jullundur Foundry), Hyderabad. Modi NO.3, Nagpur. City. M G I b S' h & S 53. . u a lDg ODS 19. The Kashmir Book Shop, 36. Students Stores, Rag- (P) Ltd., Press Area, Residency Road, Srina- hunath Bazar, Jammu- Mathura Road, New gar, Kashmir. Tawi. Delhi. Agency Name and Address Agency Name and Address Agency Name and Address No. of the Agent No. of the Agent No. of the Agent 54. (R) C.V. Venka~ala 70. Gandhi Samriti Trust, 86. The Krishna Book Iyer~ Near ~ailway Bhavnagar. Depot, Publishers, Statton, Chalakudi (S.1. 71. People's Book House, Booksellers, Stationers 55. (R). The Chindambaram Opp. Jaganmohan & News Agents, Main Provision Stores, Chin- Palace, Mysore-I. Bazar, Pathankot, (E.P.) dambaram. 72. 'JAGRITl', Bhagalpur-2 87. Dhanwantra Medical & (Bihar) Law Book House, 1522, 56. (R) K ..M. Agarwal &. Lajpat Rai Market, Sons~ R81lway ~ook Stall, 73. The New Book Company Delhi-6. Udaipur (Rajasthan). (P) Ltd., Kirab Maha1! 88. The United Book 57. (R) The Swadesamitran 188-9~~ Dr. Dadabhal Agency, 48, Arnrit Ltd., Mount l<.oad, NaOrOjl Road, Bombay. Kaur Market, Paharganj, Madras. 74. The English Book Depot New Delhi. S8. The Imperial Publishing 78, Jhoke Road, 89. Pervaje's Book House. Co., 3, Faiz Bazar, Ferozepore Cann. Book Sellers. & News Daryaganj, Delhi-6. 75. Minerva Book Shop' A~~: Kopplkar Road, 59. The High Commission of 9, Jor B~gh Market· . India Establishment New Delhl-3· 90· B. S. Jmn & Co., 71, Department Aldwych, 76 76. People's Publishing Abupura, Mazaffarnagar London, W. C; 2. House, Rani Jhansi (U.P.). B k Road, New Delhi-I. 91. Swadeshi VastU Bhandar 60. Curren 00 Stores, Booksellers etc., Jam- MarutiLane. Raghunath 77. Shri N. Chaoba Singh, nagar. Dadaji Street. BombaY-I. Newspaper Agent, ti.: International Consultants Ramlal Paul High 92. Bhogilal L. Panna, ~ook Corporation, 48 C, SchO?l AnneXe, Imphal, stall ~ntract?r, Railway Marredpally {~HEast) MaDlpur. JunctlOn, Rajkot. Secunderabad (A.P.) 78. Minerva Book Shop,93. Sikh Publishing House 62. K.G. Aseervadam and The Mall, Simla-I. (P) Ltd., 7-C, Conn- Sons, Cloughpet, P.O. augh! Place, New Ongole, Guntur Disn. 79. Universal Book Company, Delhi. (Andhra.) 20, Mahatma Gandhi 94. G.R. Lakshmipathv 63. The New Order Dook, Marg, Allahabad. Chetty & SODS, Gener,] Co., Ellis Bridge, 80 Madhya Pradesh Book Merchants & News Ahmedabad . Ce AhU' Pu Agents, Newpet, Chan- • ntre, 4!, lya ra, dragiri, Chinoor Distt. 64. The TriveDi Publishers, Indore City (M.P.) (Andhra Pradesh). Masulipamam. 81. MinaI &. Co., 8S-Co 95. Hind Book House 65. Deccan Book Stall, New Mandl, Muzaffar- 82, Jan Path, Ne"'; Ferguson College Road, nagar (ll.P.) Delhi-I. Poona-4. 82. Firma K.L. Mukbopa- 6. Bookwell, 4-Sant Naran- 66. Jayana Book Depot. dyay, 6f1A, Banchharam kar Colony, Kingsway Chapparwala Kuan, Akrur Lane, Calcutta- Camp, Delhi-9. Karol Bagh, New 12. 97. The S.S. Book Emporium Delhi-S. 83 Freeland Publications "Mount-Joy" Road, 67· Bookland, 663, Madar . (P) Ltd., II-AfI6, Basavangudi, Bangalore- Gate, Ajmer (Rajasthan). Lajpat Nagar, New 4· 68. Oxford Book & Stat- De1hi-14. 98. Sahitya SangaDl, Book- ionery Co., 'Scindia sellers, 44, Lok Manya House, Connaught Place, 84. Goel Traders, lOO-C, VastU Bhandar, Dadar, New Delhi. New Mandi, Muzaffar- BcmlbaY-28. nagar (U.P.) 69. Makkala Pustaka Press' 99. Shalig Ram & Son s Balamandira, Gandhi- 85. Mehra Brothers, 5o-G, Booksellers, Madar Gate, nagar, Bangalore-9. Kalkaji, New Delhi-19. Aligarh (U.P.)

GIPND-L.S.-1697 (Ai) LS-20-1-61-1l75.