Letters: Licensed to obstruct

This has reference to Surajeet Das Gupta's article "Chambers: Sometimes with government policy, often against it" (40 Years Ago... And now, November 12), which refers to the address by G D Birla at the Ficci conference in 1979 where he advised industrialists to ignore the limits to production laid down through the installed/licensed capacity module of the Directorate General of Technical Development (DGTD). Looking back over 40 years, it is funny that the government of a country should have put fetters on the production capacity of expensive plant and machinery under the provisions of the Monopolies and Restrictive Trade Practices Act. (MRTP Act).

In this context, I recall a rather interesting episode that was narrated by Minoo Masani at a management seminar in Jamshedpur in the late 1970s. The licensed capacity of the factory of Tata Engineering and Locomotive Company Limited (Telco as it is popularly known then) at Jamshedpur was for 28,000 vehicles per year. In 1975 or so, the actual production was 29,100, i.e. an excess of 1,100 vehicles over the licensed capacity. Telco advertised this achievement in a big way by putting the icon, Ram, of its house magazine on top of Mount Everest (the height of which is 29,028 feet) signifying that their workers had scaled even the metrics of the world's highest mountain. We all enjoyed the hoardings, which celebrated this great achievement with so much humour.

In due course, however, this extra production came to DGTD's notice and it issued a strong "Show Cause Notice" to the chairman of Telco, J R D Tata. Mr Tata is reported to have passed on the DGTD notice to his deputy chairman, Nani Palkhivala, for a suitable reply. Palkhivala fretted and fumed and rushed into Tata's chamber with a draft reply to the notice. Tata cooled him down and redrafted the letter to the DGTD which read like this:

"We have received your Show Cause Notice.

We are sorry to note that the actual production of trucks during the financial year exceeded the licensed capacity by about 1,100 units. The workers in our Jamshedpur factory are a greatly motivated group. During the last month of the financial year even with best of our efforts, we could not demotivate them to slow down production. The fault, however, lies with the management.

We hereby want firmly to assure you that such violation, intentional or unintentional, will not take place in future as we have strongly advised our general manager at Jamshedpur factory to stop the production line forthwith if he ever finds that the actual production was likely to cross the licensed capacity and thereby violate the provisions of the MRTP Act.

In view of the facts narrated above, we sincerely believe that you will be kind enough to withdraw the Show Cause Notice served on us."

Nirupam Haldar, Kolkata

Letters can be mailed, faxed or e-mailed to:
The Editor, Business Standard
Nehru House, 4 Bahadur Shah Zafar Marg
New Delhi 110 002
Fax: (011) 23720201
E-mail: letters@bsmail.in
All letters must have a postal address and telephone number