There must be a sensible balance between Socialism and Capitalism...and its not playing cards!

Each day, about 2,800 workers punch their time-cards in and out of Hindustan Cables Ltd.’s factories in India. They get paid, receive the occasional raise and eat in subsidized canteens, even though they produce nothing.

The state-owned company, based in Kolkata, hasn’t made any cable since 2004 and has lost $549 million after cellular technology made its telephone wiring obsolete. Labor laws which the World Bank says are among the most restrictive anywhere and tortuous bankruptcy procedures, a legacy of India’s Soviet-era plan economy, mean the government can’t fire idle employees or sell assets such as machinery or land.

While tolerance of unprofitable companies sits at odds with India’s status as the world’s second-fastest growing major economy, Prime Minister Manmohan Singh’s government, rocked by a spate of corruption scandals, may be wary of changing rules that keep many in jobs. About a third of India’s 249 state-owned firms that make everything from condoms to steel are losing money -- $3.4 billion in the most recent financial year -- just as the government misses a goal of raising $8.7 billion this year selling stakes in companies such as Oil & Natural Gas Corp., the nation’s biggest explorer.

“It is utterly crazy and everyone knows it’s crazy but there is nothing the government can do because of the labor laws,” said M. Govinda Rao, one of four members of India’s Economic Advisory Council to the Prime Minister, a panel which produces periodic reports for Singh’s administration. “The government is literally throwing money away.”


Kishore Rungta, chairman and managing director of Hindustan Cables, declined to comment.