The public sector in India – which includes large corporations, serving especially the infrastructure sector, owned and managed by the state – has been one of the distinctive features of the Nehru-Mahalanobis model of development and in the last three decades at the centre of an intense political contestation. The liberalization of the economy, which began in 1991, confronted public-sector companies with a simultaneous demand squeeze (due to loss of a monopolistic or near-monopolistic position in the market) and resource crunch (due to shrinking investments from the state) catapulting some of them into a seemingly irreversible downward slide. The way out – reorganization, refinancing, or privatization – has been the subject of heavily ideologically laden debates in which questions of efficiency, productivity, technology adaptation, labour politics, and state control have figured prominently.

Dilip Subramanian addresses all these issues in the context of the Indian Telephones Industry (ITI), Bangalore, a major public-sector undertaking, which held the commanding heights of production for the telecommunications industry in India for over four decades. Liberalization in the 1990s hit this segment of the public sector the hardest. The global communications revolution and an explosion of new technology unleashed forces of an order with which few other sectors of the economy have had to grapple. Subramanian shows how ill-prepared the state corporation was to adjust to this vortex of change – why that was so, and what were the consequences.

A major conceptual contribution of this book has been to move away from a one-sided focus on labour or management to examine the dynamic interplay among the four actors that shaped the course and direction of the ITI: the state, management, the unions, and labour. The story the author tells is thus a complex one, which addresses the conflicts and contradictions between the state, especially the Department of Post and Telegraphs (P&T), which directly controlled ITI (later renamed the Department of Telecommunications) and ITI management, which was not only appointed by the P&T but contained a large number of officials from the government department, including at the upper echelons of management.

Subramanian characterizes this as the “bureaucratic production regime”, and in the first half of the book elaborates some of its most distinctive features. At the fundamental core of such a regime, he argues, is the triad of state control, soft budgetary constraints, and the absence of competitive pressures. This combination produces what was to become the stereotype of the public sector: political interference in corporate strategy combined with official neglect; chronic managerial inefficiencies within a wider culture of unaccountability; low levels of motivation at all levels; no consciousness of cost; poor products; low productivity and no work ethics; indiscipline and overemployment. This resulted in firstly, a complete disregard for the quality and quantity of production; and, secondly, an inertia which, ignoring all the warning signs, took for granted continued state protection. By 2007, the only solution was a drastic restructuring. And yet, Dilip Subramanian argues, and this is central to the tenor of the book, none of this was inevitable. The change in state policy in the early 1990s, the burgeoning of telecommunications, need not have spelt the doom of ITI. There were possibilities of strategic restructuring in the two ensuing decades, but opportunities were waved away. What proved disastrous was the comfortable relationship between the company and the central government department, locked in a monopolistic-monopsonistic vertical integration and a false confidence in the state's willingness to bankroll what had become in the twenty-first century a ghost factory.

Subramanian also elaborates on the complexities of workers’ politics in a sector that was, indubitably, the crucible of the labour aristocrat as it developed in independent India. The pulls and strains in the in the relationship between the workers and the unions was mediated by the role of the state-as-employer and with a double face – usually benevolent but also capable of absolute intransigency with unprecedented repressive powers at its command. It is perhaps partly because of this that the ITI's history of unionism is so unusual. The first union was formed within two years of the company's inception and, in line with contemporary state policy, the management promptly recognized the union and provided it with a range of facilities – a sharp contrast to the conflicts and struggles that attended the rise of unionism in private industries. In 1953, deeming insiders to be inexperienced and not sufficiently aggressive, workers invited in two outsiders, K. Kannan and A.N. Singh, as President and General Secretary. The workers had calculated, rightly as it turned out, that in a situation where the all-powerful state was itself the employer, outsiders would be more effective than insiders.

Of course, even so, as was proved during the parity strikes of 1980–1981, the state's staying power and repressive might created a situation of such great inequality that even very powerful unions failed to bend it to their will. The ITI did, however, perhaps by inviting two leaders from the opposite end of the ideological spectrum, avoid the fracturing of its unions on federated party-affiliated lines and remained committed to plant-level unionism. Subramanian traces the nuances of workers’ and unions’ interactions through a series of struggles over both economic and non-economic issues.

On the whole, the state was a benevolent employer. It accepted the unions as subordinate partners in managing the workforce, sharing some of their managerial powers and evolving over time forms of joint regulation. What emerged as a sine qua non of the “bureaucratic production regime” was an impersonal, rigid, and highly codified web of administrative norms developed in collaboration with workers’ representatives governing all matters such as conflict resolution, collective bargaining. and work conditions. For the workers it provided sanctions against arbitrary management practices and empowered them as “industrial citizens possessing clearly defined rights and obligations” (p. 659). Such a regime combined employment security and wage security and is the basis of the characterization of labour inflexibility in the public sector. Whether or not the latter is invariably a fallout of the former remains, however, a matter of debate. Whatever the consequence for the company, the workers gained greatly from the bureaucratic production regime – with its tolerance for lax work rhythms and high absenteeism. The material and symbolic “aristocratic” status that public sector employment conferred upon the workers allowed them to mobilize social capital in unexpected directions including generational mobility through education, dowry marriages, and withdrawal of women from waged work.

The increasing value of such public-sector jobs subjected them to intense competition, which played out within the matrix of wider social inequalities. Subramanian shows that the ITI was able, at one level, to maintain an impersonal hiring system and not succumb to the vicious logic of political patronage. But there were other social axes of competition and he explores three of these in great detail in the book – gender, caste, and regional/linguistic identity. He shows the production of the “single male breadwinner” as an inescapable appendage of the public-sector labour aristocrat, the only very miniscule numbers of women employed in ITI being on “compassionate grounds” on the death of husbands or sons working in the company.

The scheduled castes and tribes were better represented in the workforce as a whole, given the state's obligation to follow its own reservation policies. At one stage, the author shows, their share in the workforce was reflective of their proportion in the population. Nevertheless, scheduled castes remained overrepresented at the lower end of the workforce and found upward mobility much more difficult than other workers. Moreover, caste tensions plagued everyday relations among workers in the workplace – insults and invectives from upper-caste workers and managers were frequent but rarely proved or punished. The question of regional identity is discussed at considerable length in the book – the tensions between local Kannadiga workers and the migrant Tamil workers resulting from the 1970s in a change in recruitment policy in favour of the “sons of the soil”. The larger context of Kannadiga politics framed such company strategies and influenced plant-level workers’ social interactions.

This is a long book and it traces the history of ITI from a rich combination of sources: documentary (from the company records), oral narratives (interviews of workers, union leaders, and managers) and ethnography. It gives us a textured, layered, and nuanced history of a major area of India's economy over a period of half a century. This brief review can by no means do justice to the complexity of its many arguments. But special mention must be made of the sixth chapter, the ethnography of work at the ITI. There are very few such detailed ethnographies of work in Indian literature, which tends, as Subramanian points out, to describe the work process in depersonalized terms. In this chapter, the author brings together a remarkably keen eye and a number of interviews to draw in rich narrative detail the dynamic picture of workers at work.

In recent years, scholars have turned their attention to the informal sector, for very long neglected in labour studies. Subramanian's book tells us that there is a great deal about the formal sector that we still need to understand. The analytic strength and originality of the book is in the focus on the public sector, the hard core of the formal manufacturing economy, the drawing together of the business and labour ends of production, and the focus on the plural roles of the state. The tension between the scholar's diagnosis of the ills of public-sector companies such as the ITI and the ideological resistance against their dismantling remains as a running thread in the book. Twenty years ago the book may have informed, more critically and informatively, and perhaps with far better consequences for companies such as the ITI, the debates on the public sector and shifted them from the very fixed channels in which they have moved. It is not too late, however, and it is to be hoped that other than scholars and students of business and labour history, bureaucrats and policy-makers will also pick up the book and reflect on the potential and possibilities of the public sector.