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Vinod Mathew

AHMEDABAD, Dec. 13

THE National Dairy Development Board (NDDB) may soon be going in for a major restructuring exercise that will see over 90 per cent of its employees stepping down.

However, it would not be a full-fledged exit route for NDDB as its staff is being offered re-employment under contract with some of its subsidiary companies, either existing or those to be floated soon.

This would be the third round of restructuring by NDDB in the last couple of years. The first one was in October 2000 when Mother Dairy Fruits & Vegetables Ltd and Dhara Vegetable Oil & Foods Co Ltd were hived off as separate companies. The second initiative came earlier this year when Mother Dairy Foods Ltd (MDFL) was floated to pick up equity in joint ventures with a handful of state co-operative federations across the country.

According to the NDDB staff, it may be time to finally get a move on this time around as the management has offered a fatter pay slip. It is said to be the dairy board's pitch that the employees stand to gain as they could still continue to work, though under contract.

``We were told by the management last week at Anand that NDDB had come under the tax net and therefore, many of the employees would need to be shifted to subsidiary companies that was to be set up soon. While we would have to resign first and then get re-employed under contract with the subsidiary companies, the advantage would be a 30 per cent rise in salary. Against this, there is no guarantee as to how long this arrangement will continue,'' an officer of the NDDB told Business Line.

Dr Amrita Patel, Chairman of NDDB, was not available for comment, but Dr V. Kurien, who founded the apex dairy board, expressed uneasiness at the new turn of events. While admitting that it was not necessary to keep him posted on such developments at NDDB despite the fact that he lived in Anand, the dairy development board may need to take Parliament into confidence before going in for such sweeping changes, he said.

``When NDDB was set up, the intent was to replicate Amul kind of co-operative federations across the country and not to start milk companies in Delhi and other places. NDDB has delivered on this front as the milk production has quadrupled since then to 86 million tonnes. The mandate as per the NDDB Act, 1987 was to ensure the economic development of the rural masses and to improve the quality of life of the people through co-operative effort. It is not proper to circumvent this without the approval of Parliament,'' Dr Kurien said.

The presentation made by the NDDB management to its employees — both officer and non-officer category — took place at Anand a week ago. This was the culmination of a month-long exercise by NDDB brass that wound through its regional offices in Delhi, Mumbai and Bangalore. If this blueprint were to be executed, only a core team of some 40-50 employees would remain under the direct employment of NDDB.

This is essentially an extension of the NDDB's goal to emerge as a fiscally strong entity as any other public financial institution. The cash-rich dairy board with a huge asset base had indicated such an intent only a few weeks back in when its annual report for 2001-02, its first year as a zero sales organisation, showed 96 per cent of its total income at Rs 808.98 crore to have come from interest accruals.

The first VRS offer by NDDB came in 1988 following its merger with the Indian Dairy Corporation (IDC) where nearly one-third of its combined 2,000-strong workforce was retrenched. The second one came in 1994 when the 1,300-strong NDDB felt that some 450 of its engineers and veterinary experts would be deemed redundant in the post Operation Flood III era. At that time, it was Design Learning Inc's Dr Peter Block who triggered the restructuring exercise. This was followed by two more such exercises, in 1998 and 2002, but NDDB is still by no means a lean organisation. Apparently, the board has been hiring as it went about the business of firing as its workforce even today is about 900-strong.

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