For purposes of investigations projects under the plan are divided into six broad categories-irrigation and power, public works and buildings, agriculture and community development transport and communications, public industrial and mineral enterprises, and social services. For each set of projects, the Committee will work through groups composed of Ministers from the Centre and Chief Ministers of States. Reports of investigating teams will be discussed with the Chief Minister of States concerned with the execution of projects under study and the normal procedure will be for investigating teams to discuss and obtain the views of the Central or State departments and authorities in charge of projects on their draft reports before submitting them to the Committee on Plan Projects. Matters of general policy connected with the investigation of projects will be considered from time to time in meetings of the Standing Committee of the National Development Council.
12. During the past two years an Organisation and Methods Directorate has functioned at the Centre in the Cabinet Secretariat and individual Ministries have also set up special organisation and methods units which collaborate closely with the Directorate. These arrangements have helped to expedite the despatch of business and to create greater interest in and understanding of matters affecting administrative efficiency. In a number of States also steps have been taken to set up organisation and methods units. It is recommended that as part of their normal machinery of administration all States should have special units for organisation and methods which will provide the necessary technical guidance and build up a pool of experience on which departments can draw. The Organisation and Methods Directorate at the Centre is in a position to provide facilities for training and to make its experience available to the States.
13. While valuable results can he obtained through attention to the details of organisation and methods, for public servants of all grades to attain high standards of efficiency there is need also for a correct psychological approach. Planned development and the objective of eliminating poverty and building up a
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social and economic system which provides equal opportunity to all persons may be expected, in the ordinary course, to serve as a powerful incentive for efficiency on the part of public servants at all levels. Competence in the discharge of his duties should be a natural attribute in any public servant who is trained to do a job of work and makes public service his vocation, In mobilising the machinery of administration to put forth the best effort it call, certain aspects should be specially stressed. In the first place, there should be a studied attempt to ensure that at each level the. officials concerned have the opportunity of exercising the maximum, responsibility and in fact do so. Secondly, men with ability and initiative should be marked out early enough in their careers and given experience in carrying out duties which will further develop their capabilities and train them for positions of higher responsibility. Thirdly, in view of the magnitude of the administrative tasks which have now to be carried out in all fields, an attitude of speed and urgency should be insisted upon. In the fourth place. in the context of development, in personnel policies rigid procedures should be replaced. Distinctions, for instance, between administrators and technical personnel exercising administrative functions or between officials in different grades and cadres, which are sometimes drawn, are already out of place. There is need to lap new sources of recruitment in different fields and, for shorter or longer periods, men with varied experience and background have to be drawn into the administration. Finally, greater interest must be taken than has been customary in the past in developing the correct human relations within each organisation within the Government In administration, as in all fields where men work together in dif- ferent capacities for common objects, the sense of comradeship, the confidence that comes from recognition of good work done and the opportunity of participation in the making of decisions which they are called upon to execute, will go a long way in promoting keenness and efficiency among public servants.
14. A weakness in the present system of administration is the manner in which administrative control often tends to be exercised. In this connection two aspects may be specially mentioned. In the first five year plan it was pointed out that a considerable part of the time of senior public servants was being given to work which was formerly done at lower levels. "Increasingly, while each agency of Government is accepting new responsibilities, the stage at which effective decisions are taken within any department is being pushed upwards." There is still some tendency for the exercise of initiative and the making of decisions being concentrated at higher levels. The correction of this tendency is in part a question of organisation and methods; in part however; it involves a consideration of how best to utilise the available personnel resources and to encourage men to assume responsibility.
15. A somewhat similar problem also arises in the relations between secretariat departments and departments or authorities outside the secretariat. In the first five year plan it was emphasised that heads of executive organisations, such as, departments or attached or subordinate offices, should be enabled to function with reasonable freedom and initiative and, at the same time, with the knowledge that they have the confidence of the Ministries under which they are placed. Departments tend to lose their drive and enterprise when they are subjected to detailed control, exercised at a number of levels within a secretariat or a Ministry. Some improvement has occurred in this respect and executive departments are being encouraged to assume greater responsibility, but continuing emphasis on the need for the fullest initiative on the part of departments is necessary. It was also suggested in the first five year plan that Central Ministries and State Governments should undertake systematic reviews of the new functions which they had assumed during rercent years and consider whether some of them, at any rate, could not be made over to separate subordinate authorities. Such a review is now essential in relation to the tasks which have to be carried out during the second five year plan by Central Ministries and by State Governments. In general, it is desirable that the area of policy in which a Ministry or a sec- retariat has a special interest, should be distinguished as clearly and systematically as possible, and to the maximum extent, executive functions should be entrusted to separate units which are in a position to operate with minimum reference to the secretariat.
16. In carrying out the second five year plan, a problem which assumes much greater importance than before is the need to evolve suitable administrative methods and agencies for carrying technical, financial and other assistance to persons of small means, Whether in agriculture or in small industries or in the Field of social services, limited resources in men and money have to serve large number of individuals. The terms and conditions of assistance for various schemes should be drawn up in such a manner that they benefit the underprivileged. At present frequently they leave a large area of discretion as to parties who may be assisted and it may well happen that an unduly large proportion of assistance may pass to persons who are relatively better off or succeed in drawing special attention to their claims. Further, for developing a sound system for the distribution of public assistance in any field it is essential that small producers should be brought together into organised units. such as cooperative associations which can serve their members effectively. Where such associations exist and their members are vigilant, the administration can give them a much greater measure of help and guidance than it can to separate unorganised individuals. The associations can also assume an increasing degree of responsibility in relation to their
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members, reducing thus the burden which falls upon the administrative machinery. The role of cooperatives in agriculture, in small industries and in other sectors is described in later chapters. Here it is sufficient to stress that the building up of cooperative associations and organising mutual aid, wherever feasible, are among the major administrative tasks of the second five year plan and that it is mainly through such arrangements that persons with limited means are to be effectively assisted both in developing their own activities and in utilising the assistance and resources which the State can make available.
PUBLIC ENTERPRISES 17. The administrative requirements of public enterprises under the second five year plan have to be considered in relation to the role assigned to the public sector in the Resolution on Industrial Policy. The public sector is to grow absolutely and relatively to the private sector. Programmes of industrial development during the second plan place on the Government responsibility, amongst other things, for new steel plants, coal mines, heavy machine building factories, fertiliser factories, manufacture of heavy electrical equipment and oil exploration and development. The comparative figures of investment during the first and the second plans are an indication of the growing responsibilities of Government in the management of modern industry. The decision to set tip a State trading corporation is another illustration of the rapidly increasing area in which the Government has to equip itself with personnel and to create organisations not only for tasks to be undertaken during the next few years but as preparation for even larger responsibilities to be shouldered in the future. Besides industrial projects which the Government directly operates, there are also a number of schemes of industrial expansion with which it is closely associated. Organisations for preparing designs of industrial plant and equipment have to be built up within the Government. Personnel has also to be found for assisting development councils established for individual industries under the Industries (Development and Regulation) Act, 1951.
18. In the First Five Year Plan, attention was drawn to the need for making special arrangements for obtaining personnel for the management of industrial enterprises belonging to the Central and State Governments. It has been recently decided to establish an Industrial Management Service, for staffing State enterprises under the Ministries of Production, Transport, Communications, Iron and Steel and Commerce and Industry. The Industrial Management Service is intended to provide managerial personnel for industrial undertakings needed, for instance, for general management, finance and accounts (except top level posts), sales, purchases, stores, transportation, personnel management and welfare, town administration etc. Recruitment to this Service will be made from within the public services as well as from outside. At lower levels arrangements are to be made for the purpose of training personnel who will be able to assume higher responsibilities at a later stage. The controlling authority for this Service would be the Home Ministry and it will be advised by a Board which will include the Cabinet Secretary and representatives of the Ministries concerned. It is also the intention that public enterprises should be required to recruit extra personnel against supernumerary posts at lower levels in order to provide in due course for the long-term needs of the expanding public sector. The Service should also be able to provide higher grades of personnel for Industries Departments in the States whose operations, especially in the field of small, medium and cooperative industries will steadily increase. In regard to technical personnel, a proposal to set up a technical cadre or cadres to man certain categories of technical and specialised posts in the State industrial undertakings is under consideration.
19. The extension of training facilities in business management has considerable bearing on the rate at which the industrial sector can expand. Business administration courses for training junior officers have been recently initiated at Bombay, Calcutta, Madras and Delhi. It is also proposed to establish and administrative staff college which will bring together senior executives in different fields for study of techniques of organisation and administration. Management associations are also being established at principal centres.
20. Where large units have to be operated, appropriate organisations are needed it two levels, namely. (a) for individual enterprises, and (b) for carrying out responsibilities relating to planning, organising, directing and co-ordinating individual enterprises or groups of enterprises. Thus, for instance, the latter group of functions are carried out by the Ministries of Railways, Iron and Steel, Production and the National Industrial Development Corporation. Below this level a variety of forms of organisation have developed in recent years, but in industrial enterprises the joint stock company in which the government holds the entire capital is being increasingly adopted. Thus, the Natioanl Instruments Factory, the Integral Coach Factory and the Chittaranjan Locomotives are examples of departmental management. The company form of management has been adopted for Sindri, Hindustan Cables, Bharat Electronics, Antibiotics and others. For the Damodar Valley Project and the air services there are statutory corporations. A number of irrigation projects are managed by control boards in which the Centre and the States concerned are represented. In determining apropriate forms of organisation for public enterprises the main consideration to
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be kept in view is that the normal administrative and financial procedures customary in departmental administration are not suitable for commercial and industrial enterprises. These enterprises have to fulfil business criteria and standards and have to meet obligations similar to and, in some respects in excess of, those expected in the private sector. The general policy, therefore, is to confer upon their managements the largest measure of financial and administrative autonomy consistent with the overall responsibility of Government and accountability to Parliament. Questions relating to the organisation of public enterprises are under constant review and greater experience is needed before a clear view as to the relative advantages of different forms of organisations emerges. The subject has already received considerable attention as, for instance, in recent reports of the Estimates Committee of Lok Sabha. Issues such as the composition and functions of boards of directors, the role of a Ministry or a Secretariat in relation to public enterprises under its general control, and the need for a degree of common management for similar public enterprises are under examination in the Ministries concerned.
21. In large scale enterprises and in Boards or Ministries under which they function a great deal of long-terra planning is necessary. Difficult problems are involved, such as the selection of competent and dependable technical consultants, negotiations with foreign countries and firms, the building up of supervisory and other key personnel, selection of foreign experts, and the adaptation of scientific methods of management to the needs of each enterprise. Questions bearing on methods of management and personnel policies in public enterprises, therefore, need well-informed and continuous study to which independent experts and leading organisation, both in the public sector and in the private sector, can contribute valuable experience.
PLANNING MACHINERY IN THE STATES 22. In the course of the first five year plan most States have developed their planning units. As a rule, there are whole-time or nearly whole-time secretaries in charge of planning and development, many of whom also carry executive responsibilities in relation to national extension and community projects. During the second five year plan work relating to planning in the States is likely to increase in volume and complexity. Hitherto, at the State level, the work of planning departments has generally taken the form of a limited Amount of coordination of the work of other departments. To an increasing extent, a State planning department will now be concerned with appraisal of the economic and social needs of the State and with financial and material resources, training programmes and overall policy aspects of State programmes. Such questions as the level of employment, supply of trained personnel, supply of material resources for implementing the plan, mobilisation of small savings, price trends and the supply of consumer goods must fall more and more within the scope of. planning in the States. The preparation of annual plans, improvements in the techniques of planning and the need for more precise and regular reporting and assessment of progress of individual schemes and of different sectors of the State economy will also demand expansion and strengthening of planning organisations in the States. In some States the necessary steps are already being taken. In this connection it is also necessary to emphasise that statistical and economic. staffs in the States should be augmented and brought into close working relationships with planning departments.
23. As explained in the next chapter, leading non-officials are associated with the formulation and implementation of plans both at the district and at the State levels. Amongst others, Members of State Legislatures and of Parliament participate in district development committees and project advisory committees and some of them also serve on State Planning Boards. To bring about closer association of Members of Parliament with the work of the Central Government about two years ago informal consultative committees composed of Members of the Lok Sabha and the Rajya Sabha were constituted for a number of Ministries, During the past year these consultative committees have been associated with the consideration of problems of planning in different fields and at different stages the Planning Commission has conferred with the consultative committee associated with its work. The Planning Commission also suggested to State Governments that Members of Parliament from each State might be associated with work relating to planning and, more especially, in the preparation of the second five year plan. Such association will be of considerable value in carrying out the plan, and it is hoped that in the States arrangements will be made for informal consultation with Members of Parliament and State Legislatures for reviewing the progress of the plan and organising the cooperation and support of the people in its implementation.
ANNUAL REVISION OF NATIONAL AND STATE PLANS 24. As has been explained in Chapter I in considering the economic and social objectives of planned development it is necessary to take a view extending over a fairly long period, for instance, 15 years. In preparing the second five year plan, for the development of steel and heavy industries, in irrigation and power, in personnel planning, in the planning of education and in assessing population trends in relation to food supply, a view has been taken of probable requirements or developments over two or three plan