Letters: All staffed up

The editorial "Competition to the end" (May 6), raises an interesting and pertinent point about Warren Buffett not investing in Indian companies. The over-staffing in Indian companies, especially public sector undertakings (PSUs) and the Indian Railways, not only raises direct costs but gives rise to inefficiencies, adding to the costs. Berkshire Hathaway's Charlie Munger once made an interesting observation about the erstwhile Soviet Union: "They pretend to pay us, we pretend to work". This applies to many companies in India even today.

I remember, in the early nineties, the share price of TISCO (now Tata Steel) was around Rs 700 and it was the highest cost producer of steel in the world. There was no foreign investment in the company. A decade later it became the lowest cost producer of steel in the world after restructuring and its share price was around Rs 250, and foreign investment started pouring in. India might be an attractive market to invest in for many reasons, but the single reason of over-staffing has kept the world's biggest investor away form investing in Indian companies.

Naresh Saxena New Delhi

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