Ad Here  
A yen for wastage… Small units prefers to remain small... L&T- the specialty of special purpose vehicles ONGC at KG Basin Protest masters... Kudos to NDTV... No Maha Koottani in TN... Lalu’s envy, India’s pride Lesson from Chandrababu Naidu Poor quality of university VCs Kinetic Karnataka GM Technology at last! He continues the focus on social amelioration Tribute – Manikam Ramaswami Tough task taking states together Demise of a media baron... Convulsions in The Hindu Where a state respects its litterateurs… London, London Narayan A Grand Finale for SN’s MS centenary at the US… Delhi is distant Welcome changes that testify to Jayalalithaa’s return to health The balancing act There was flood of milk. Reason: no milk commissioner! TN – agglomerate land holdings without alienating ownership TIAM turns a full cycle Tatas moving out of urea production... Fuel for thought TN-leverage strength of BHEL, NLC... Tribute A welcome initiative by the judiciary Sweet news for TN sugar mills A professional at the helm of IRDA... Silver Years of Madras Musings Quality education through the PPP mode Poor representation for Kerala and TN in Cabinet Music happens Welcome GST Naidu’s return augurs well for Seemandhra A Grand Finale for SN’s MS centenary at the US… Delhi Chalo... Contrarian cousins Streamlining mandatory third party cover Increasing non co-operation of state leaders Cleaning Ganga – relocate tanneries and install electric crematoria Modi and the lady A glass full of corruption Multi-faceted Venkat Remembering Indira Sivasailam... The sea- saw battle continues... Pharma – overdose of copying Things happen by accident and not by design... Marketing expert Balagopal is no more Computation of GDP – conundrums continue Another Indian music maestro at the UN to the lack of interest on the part of these to focus on original research. This despite the much lower costs of such research in India. The industry which thrived on the protection of a closed economy and the advantage of a vast domestic market, has failed to organise its evolution on healthy lines Shale gas and its shallow future …and of a popular trade leader Editor's Notes EVM is tamper-proof GNS - 100: our first subscriber Banning booze... Adharma of opposition politics Modi storms Silicon Valley Robber barons everywhere An enemy’s enemy is a friend Maximising the micro pricing … Fall in crude prices help in oil sector reform Plummeting profits of PSBs Build close rapport with business leaders Airlines in India: cost and space Editor's Says The power-full Hindujas Not just in-laws (and outlaws); they’ve renowned academics at the helm! More Shakthi to Das’ elbow Like Hinduism: many paths to reach God... How Air-India loses customs... Rs.1600 crore paper board plant of TNPL Godspeed, Chief Minister JJ Why this malaise in medical education? Sweeter prospects for sugar China invests in India Delhi is distant… Come elections, come advertisements... A friendly business group The star of Spencers is no more Alexa – Talking Wikipedia The few handicaps... Insurance companies bleeding, yet no decision on increasing FDI limit! Fortune for Indian Airlines The ‘Jayanthi Tax.’ When nations steal growth from one another… Don’t seem to feel the pulse… Permanent secretariat for TN GIM CSR and CMI: promise of another Srinivasan Ramanujan... Moily’s bold thrust He saved millions from starvation... IAS invades NDDB... Noble nonagenarians... Discoms deserve better… When TN politicians can emulate Kerala's Liberal imports idling indigenous capacities Colour-Chem’s colourful KRVS Excel Generators provide the vital back-up Shaming of Tamils by Tamil farmers at Delhi Scientists urged to take up farmer-oriented research TELANGANA at last…BUT The rise and fall of Annamalai University Waning interest in public discussions… Towards speedy justice Solar thermal shines… Welcome thrust on trade in Modi’s foreign visits... Secularism and anti-Hinduism F C Kohli - his concerns all embracing Shipping woes of Chennai companies A more liberated TN… No engine for this car Vibrant Gujarat SoA @ 80 Intellectual of rare qualities Air Asia India will set new benchmarks for budget travel Shanti and Sadhana through Music IPL type auction for VCs? R Sridhar steps down as CEO of Shriram Capital Making ‘my Amaravati’... New IT products of Ramco in the pipeline… The brown list of Venkitaramanan When Ratan Tata visited SRM Eternal support for capitalisation of PS banks Paytm karo... Roaring Ro-Ro facility Gay abandon in pricing Preserving for the future Bihar – Nitish Kumar adopts the Lalu model Muffled voices for merit… The Ports’ Pasha expands into Tamil Nadu Auto components surge… S V Raju – a ‘good’ true liberal Medical costs hit the roof... Align crops to agro climate endowments… Five star activism stalls development activity MHC should not return to its old indisciplined ways Tribute – UCAL Selvan… West Bengal: mindless malignancy Parliament in paralysis... The ‘Ayyo-yes’ is no more TGS- The king storyteller Why land prices zoom in TN? Boy, can you beat these? The Gulf aviation boom For whom the MIDS bell tolls? Strengthen the base... Telangana in top gear… Wanted: a second airport for Chennai IPL - no surprise this scam Valli, they are more marginalised Infrastructure funding – lessons learnt Revive development banks... More Shakti to resource mobilisation... Tihar, Puzhal not different from Parappana Agrahara Rahman at CIC When the President was rendered homeless… Quality silica from Neyveli A rich pool of talent not utilised…. Bihar elections - the Rajaji formula worked When small is no larger beautiful.. Which side are you, Montek? Road development slows down Nuclear power at the nucleus Welcome focus on core competence An inexplicable neglect Cement prices continue to rise… Recognition to role of NBFCs.... CII projects higher growth… For whom the bell tolls? Haul over the coal Fortune 500 review TN accounts for the largest recruits by the IT sector Diamond jubilee of Egmore Samskrt School Cutting the nose to spite the face EEC at the National Media Centre PPP mode for upgrading Corporation Hospitals No mega rail project for Tamil Nadu Limit foreign borrowings to hi-tech, export potential projects... The why of tax incentives Where is Rajaji? Whistle-Stop Tour of Raghuram Rajan A think tank for Chennai Tax agriculture Gas is the way forward When online building permits work…. The nuclear option Revving up the manufacturing sector Polls and promises Focus on quality of power - its only around 170-180V A proud Madrasi Chennai and Kolkata miss opportunity to grow as Delhi and Mumbai A C Muthiah – his munificent bequeaths to science More heat than light An informal presentation - analytical, forward locking... Tatas moving out of urea production... Readers' Mail CIPET hqrs to stay at Guindy – for the present? Breaththrough in malaria control The Jan Dhan bonanza Sri Lanka votes for change CRS, a jewel among managers, is no more. Should we change the official year? Russi Mody – a tribute Solar, solar everywhere … Land reclamation from sea appears cheaper! WTO Meet: resolved to meet again Online not in line with brick and mortar businesses... Tribute – M V Murugappan Adapt Vajpayee dinner diplomacy Padma Bhushan for A Ramakrishna Building loyalty through the stomach Reliance’s TV – 18 ready to launch Tamil News Channel Inflation: are we emulating Argentina and Brazil? Wise Presidents Engineering seats go abegging The Swadeshi Trump Odisha: spectacular win by Naveen Patnaik Make standards certification mandatory... Funding the un-funded PC’s preference for professionals Dr C Rangarajan returns to Chennai S Ramanathan – a versatile musician, musicologist Naidu will soon build a new Hyderabad The rise and rise of KCP Kulandai was a giant L&T: focus on infrastructure and more infrastructure… Varuna (rain) in 2015; Vaayu (air) in 2016. Chennai devastated More tributes to GR Mu Sigma – is no more Put expensive assets created to use... This scant respect for Law Of course, Gujarat is vibrant All eyes on Sankara Nethralaya Measuring roof tops in terms of KW/MW B H Kothari - a tribute Delhi returns to BJP Return to king coal for urea... Mersal magnified
Welcome focus on core competence

The logic of sticking to knitting seems to be impacting large public sector corporations. When such a project was set up in a green field site far removed from major cities, there was the need to provide a vast range of facilities and social infrastructure. For example, when the Rourkela Steel Plant was set up in the 1950s in Odisha, the area lacked basic amenities like housing, roads, power, schools, hospitals, markets, etc. Substantial portion of the initial capital had to be spent on creating these facilities. Over the years the administration had to cope with managing a vast range of activities that had been taking its attention away from the core activity of producing steel. It plunged several public sector corporations into losses. It also resulted in bloating the workforce to levels that became unmanageable.

Tata Steel at one time had a workforce of over 70,000. A large portion of these were engaged in activities that had little to do with the production of steel. eg: managing the township, providing water supply, electricity, maintenance of roads, running schools, hospitals, sports, museum, etc. A bold decision was taken to relieve the company of most of these non-core activities. Aided by the boom in the steel sector post-2000, the company effectively hived off many of these activities to separate institutions and offered liberal VRS packages. In quick time it reduced total workforce by half. Several other corporations followed suit and succeeded in improving productivity per employee and focused on their core activities.

This has become necessary in the context of stiff competition from across the globe. There is pressure to improve incremental capital output ratio and ensure higher productivity per unit of capital employed. This has been achieved by a few sectors like the automobile and auto component industry by taking recourse to a higher degree of automation, vendor development and improving supply chain management.


Author :
Reported On :
Sector :
Shoulder :
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236