The country is gearing up for a two day general strike on 20th
and 21st February. The strike is supported by 11 trade unions across
the country including Centre of Indian Trade Unions (CITU), Indian National
Trade Union Congress (INTUC) and Bhartiya Mazdoor Sangh (BMS). Interestingly
the three unions, CITU, INTUC and BMS are affiliated to Communist Party of India
(Marxist), the Congress (main party in the ruling coalition) and the Bhartiya Janta
Party (the main opposition party in the federal parliament) respectively. These
are fairly large organizations and have close to 22 million members between
them. Such large numbers give their patron parties a large pool of people who
can be mobilized in an organized manner to send a message to the opponents. In
this case the opponent seems to be the establishment, the ruling parties in
general. All 11 trade unions have more or less agreed on a common agenda for
the two day strike action.
Their main demands are, containing price rise, creation of more jobs,
enforcement of labour laws, social security for everyone, minimum wage of INR
10,000, stop divestment of Public Sector Undertakings (PSU) and transfer of
all contract workers into permanent positions. What the unions are demanding is
job guarantee and increase in salary. They are not the only ones who want that.
Given a chance we all would like to have a permanent job from which no one can
fire us. This seems to be a fair demand by the unions. The unions are implying
that companies should not be able to hire and fire workers at will and that all
employees should be on permanent rolls of the companies so that they can get
the benefits like health insurance and pension. This too is a fair demand. Why
should some people be deprived of employee benefits? But the unions are silent
on what the workers are willing to do in return of the benefits they are
seeking.
The present labour laws of India make it extremely difficult for
companies to lay off workers during difficult times like an economic recession
or due to financial problems of an individual organisation. That is one of the main
reasons why companies put so much emphasis on hiring contract labour. This
makes it easy for the company to downsize during tough times. However such an
arrangement is bad for both the companies hiring contract labour and the people
who are on contract rolls. The company does not see them as reliable resource
and hence does not invest in skill enhancing training for them. Some companies
have started using automation as a means to avoid labour issues, after all
machines never go on strike. Such developments lead to growth without increase
in employment levels (this is true for lot of Indian states). Worldwide it is
established that labour laws, which discriminates against either the employee
or the employer lead to decline of industrial output in the long run. Greece
and Italy are prime examples of how protecting the labour force can be a major
reason for financial crisis.
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| Kolkata, the strike capital of India |
The unions are also demanding more job creation and a stop to divestment
of PSUs. But there is a basic flaw in this demand which the unions are
conveniently ignoring. Post independence India adopted a Soviet style economy with
heavy industries under state control. All natural resources too were controlled
by the government. A small section of business was left for the private sector,
which too was taken away during the nationalization spree by Indira Gandhi and
the socialist government following the 1977 movement. However, no significant
growth occurred post ’77 and India slipped towards the Hindu rate of growth,
eventually facing bankruptcy in early 90s. Kolkata was once the most industrialized
city of India, drawing entrepreneurs from all across India. It was what Istanbul
was to Europe, a trade hub and gateway. Thirty years of socialist rule
successfully pulled it down to being the least attractive metros in India.
It is not just in India, worldwide experiences show that nationalization
and state monopoly of business leads to poor service standards and death of
innovation (Venezuela and Argentina). It stops the incentive to be creative and
stifles the entrepreneurial spirit of people.
Instead of the impractical demands, the unions should take a pragmatic
look at the problems faced by the labour force in India. If they want the share
of the wealth, they should contribute equally towards creation of the wealth. What
the unions should demand is equal opportunity employment, health insurance,
training opportunities and family welfare (day care and schools). In return
they should agree to flexibility in labour laws, productivity linked appraisals
and acting in benefit of the labour force not to become an arm of political parties.
The unions should demand a consultation process of labour law reforms before
the government unilaterally decides the fate of millions of workers across the
country. The unions should demand to bring the unorganized sector under the
umbrella of organized industry so that the people engaged there can reap the
benefits and contribute their share towards the growth. Hammer and sickle lost
their importance in the twentieth century, it is time for the unions to talk to
the government and businesses as partners in growth not as a victim and tormentor.
