The effort of India’s government to defeat private enterprise

Turf war! In what will eventually be a useless and counter-productive dictatorial action, the Indian government has issued a directive restricting the ability of employees of its space agency ISRO from retiring or resigning, an action taken due to a recent exodus of between 100 and 120 engineers, scientists, and managers, many of whom left to take jobs in India’s nascent but growing private space sector.

In a memorandum issued on July 14, the Department of Space (DoS) directed major ISRO centres, including the UR Rao Satellite Centre (URSC) and the Vikram Sarabhai Space Centre (VSSC), not to routinely approve resignation or voluntary retirement requests from Group ‘A’ scientific and technical personnel associated with the Gaganyaan mission and other “important missions/projects”. Instead, such requests will require scrutiny by the Department of Space before a final decision is taken.

…Under the new directive, all resignation and voluntary retirement requests from scientific and technical personnel, including those at and below the rank of scientist and engineer, must be forwarded to the Department of Space along with “clear recommendations” from the respective centre directors, who will no longer have the authority to routinely clear such requests.

Multiple news reports from India today cite a recent spate of resignations and retirements, with many of those exiting employees getting jobs in private industry, with the most notable that of former ISRO chairman S Somanath, who has taken a position on the board of directors of the rocket startup Agnikul, which hopes to launch its own reusable rocket at some point in the future.

The government claims it has taken this action to make sure it doesn’t lose critical ISRO employees needed for its Gaganyaan and space station government projects, both of which are facing delays and technical challenges.

This directive will likely fail, however, for two reasons, both of which might in the long run be beneficial to India. First, young people just out of college will see it and decide it is better to get jobs in the private sector right off the bat. Why work for someone who will try to turn you into a serf who can’t leave? Second, it will guarantee an even greater exodus over time, as ISRO employees who want to leave will now take aggressive action to get out, as soon as they can. In both cases, the directive will encourage people to work for private industry, not the government.

At the same time, this directive suggests the government and ISRO is now taking action to squelch that new private sector. This order will limit the commercial industry’s ability to hire experienced ISRO people, thus slowing its development.

Similar actions were taken by NASA in the 2000s and 2010s when the agency began its transition to the capitalism model. There was great resistance within the government to ceding power to the private sector, resistance that still exists and showed itself again during the Biden administration. That government effort in the U.S. however has largely failed, because the public has elected a government (Trump and the Republicans in Congress) that favors the private sector, and because the private sector is getting the job done.

How things will play out in India remains unknown. Its administrative state is much more powerful, and its cultural traditions are not grounded as much in private enterprise, as is the U.S.