ECONOMIC WEEKLY
July 29, 1950
vent its absorption by the hill-sides,
so' that land-slides w i l l be averted.
Danger to Hill Stations
From the innumerable land-
slides, some of which are seen all
along the southern slopes of the
Himalayas, there is no doubt that
because of the nature of rocks, geo-
logical formation, frequent earth-
quakes and heavy rainfall, the
Himalayas are a region of excep-
tional instability. But this does not
necessarily mean that the h i l l
stations in the district of Dar-
jecling, Kalimpong, Kurseong,
etc.,—are threatened w i t h des-
truction by land-slides. Similar
land-slides occurred in the district
in 1899, but this has not prevented
the rapid growth of these stations.
Proper town-planning in the future,
the rectification of wrong town-
planning already done, and above
all, proper drainage and their
maintenance in good order w i l l pre-
vent such land-slides during heavy
rainfall. Such drainage works can
be executed at a very small cost.
Industrial Management in India
III Scindia Steam
H . T . Parekh
" T H E Scindia Steam Navigation which ultimately cost the company
* Co. after an existence of more than Rs. 2 crores!
thirty years is today facing an
organisational crisis which has The unique success of Mr. W a l -
shaken its very foundations. It chand in keeping the flag of India's
merchant marine flying against
offers a typical illustration of indus-
trial management in the country heavy odds was tarnished, in the
evening of his career, by just those
and underlines the importance of
those problems of internal adminis- knotty day-to-day problems of
internal management, of right per-
tration which can make or mar
the future of an enterprise. sonnel, of rigid economy, of check-
ing internal dissensions, etc., to
Even though freight rates are which he had paid scant attention
high and Government sympathetic, and which created a crisis for the
the Scindia Company is passing cempany. The characteristic failure
through a period of recurring of an average Indian concern to
working losses while in previous build up from within a solid struc-
years, in spite of unsympathetic ture which can grow with time
Government and trade recession, it was again demonstrated by the
was able to disclose working profits. management of this company.
Paradoxically, when Indian Ship- The progress of industry, as of
ping is expected to march forward, Government itself, is held back in
the Scindia is fighting for survival. India by the lack of ability to run
growing organisations which call
What is the explanation for this for patient endeavour and steady
crisis in the life of this company.'' application to details.
A review of the working of the
last decade reveals that while the The retirement of Mr. Walchand
Company's activities rapidly i n - due to failing health coincided
creased, firstly, the expansion was with the critical phase in the life
varied and haphazard and secondly, ot the company. Sardar Patel's
internal management failed to intervention was sought. In his
keep pace w i t h such expansion. characteristic manner, he cut the
The powerful personality of Mr. Gordian knot by lending to the
Walchand Hirachand so dominated management one of the ablest offi-
the scene that he forced the pace cers of the Government to re-estab-
by a succession of acts such as lish order in the affairs of the com-
buying over of other shipping pany. He sought to repair the
companies, starting ship-building, managerial crisis by putting manage-
running an air line, etc., while the ment in new hands. What was
rest of the administration found more, he thus brought in the Gov-
itself overwhelmed by the growing ernment to save a private enter-
prise which was playing a vital
responsibilities. Mr. Walchand,
part in the country's economic
who nursed the ambition of being
advancement.
the Lord Inchcape of India, went
ahead as he thought best, encour- It may well be that this bold
aged by successive issues of new step will prove a turning point in
capital which enabled him to raise the affairs of the company. Mr.
for the Company over Rs. 10 crores Dandekar, who has been selected
in five years. While external acti- by Sardar Patel to carry out this
v i t y increased and capital was important assignment, is faced w i t h
easily obtained, administrative no easy task. His duties are two-
extravagance grew and efficiency fold. He has to develop shipping
declined. The crowning instance and shipbuilding, and secondly, he
after the war was the order given has to so re-establish internal organ-
without consideration of expense for isation that it w i l l not again break
the reconditioning of two old ships down.
733
July 29, 1950 ECONOMIC WEEKLY

The first task is more formidable. able the company from replacing costs are so heavy in the Vizag
I n d i a n , shipping has to expand its its present out-of-date ' fleet by Y a r d in view of the facts that both
coastal trade and to develop over- modern ships Unless the company Indian steel and Indian labour are
seas routes. Under the protective steadily builds up new vessels by relatively cheap and the lack of
care of a national government; the making profits and ploughing skill and experience cannot account
coastal business is increasingly be- them back for that purpose, it w i l l for the huge difference between
coming a preserve of Indian ship- not be in a position to stand world costs of Indian and foreign ships.
ping from which the foreign com- competition. Efficiency is so linked It is in the field of internal
panies are being eliminated. w i t h modernisation that the com- management that Mr. Dandekar
pany's very survival depends upon may be able to show immediate
But unlike in the past, the
its ability to have a modem fleet. results. Dealing w i t h problems of
Scindia Steam no longer enjoys a
F r o m profits alone, both replace- organisation and management may
monopoly of Indian shipping. The ment and expansion w i l l be pos- be more to his liking. He will put
emergence of several new shipping sible. the company on the road to
concerns and their bid to capture
In another field of the company's recovery if he can reduce extra-
coastal freight is a serious threat
activity, viz., shipbuilding, M r . vagance and maladministration,
to the dominant position of Scindia
Dandekar has begun well by having indifference and complacency.
unless it can face their competition
obtained from the Government the Once he succeeds in impressing
through greater efficiency. Already upon his staff, his qualities of
undertaking for reimbursement of
signs of a rate war are visible on losses that will be incurred in vision, integrity and ceaseless
the coast and downward revision of building three ships. He will, endeavour, he w i l l have gone a
freight rates of principal cargoes however, have to engage himself long way in reviving the hope of
such as coal and salt is being seri- w i t h the task of finding nut by a a great future for the Scindia
ously considered by the Govern- close scrutiny w h y shipbuilding Steam and for Indian shipping.
ment because these rates are out of
line with world freight rates.
The crying need of Scindia is to
increase its freight earnings by full
employment of its fleet and taking
up charter hire when warranted by
expanding trade. W i t h world trend
not too favourable and in the face
of keen internal competition, the
path of Mr. Dandekar is strewn
with difficulties. He will be ulti-
mately judged by the measure of
success he attains in augmenting
the earnings of the Company. His
lack of business experience as dis-
tinguished from administrative
experience w i l l be a great handi-
cap. The task of business expan-
sion calls for unlimited vigour and
vitality. How far he w i l l be able
to replace stagnation in his organ-
isation w i t h new life w i l l be watched
w i t h great interest, for the future of
Scindia Steam as a national con-
cern will finally depend upon i t .
The expansion of overseas service
is a still more difficult task because
of the competition of old estab-
lished foreign lines against whose
efficiency and experience Scindias
have obvious disadvantages. The
losses which the company is
known to be making on these
routes are, perhaps, inevitable to a
certain extent in the initial stages.
They are, however, bound to be a
severe drain on the company and
call for subsidy from the Govern-
ment. This is an important consi-
deratiori because it has great bear-
ing on the ability of the company
to have a large and modem fleet.
Continued losses for Scindia,
apart from everything else, will dis-

734