Labour pains

Written by Vikas Dhoot | Updated: Sep 29 2008, 04:27am hrs
In light of certain union leaders condoning the ghastly killing of CEO LK Chaudhury by some retrenched workers, we turn the spotlight on two citiesKolkata and Kanpurlong hounded by labour troubles. Strikes have become commonplace here, taking a heavy toll on many industrial and other economic activites

India has to be a bigger industrialised nation. India has to be a big trading nation. People do not recognise that on a per capita basis, we are not well-endowed with natural resources. And if we have to overcome this scarcity of many natural resources, we have to be a major trading nation of the world. And if we have to be a major trading nation of the world, we have to be a major manufacturing nation of the world. India has moved forward in manufacturing but we have not performed the task of taking a lot of the surplus population from agriculture to industry. I think governmental regulations, a mindset where government knew better than everybody else what is good for the country, excessively capital-intensive design of the developmental process plus also the rigidities of the labour legislations that we have, have created a situation where we have industry but it does not grow at a fast enough pace to create lot more jobs for our young. And therefore, problems of labour rigidity, labour flexibility these are still hurdles in India realising its chosen destiny.

Thats Prime Minister Manmohan Singh urging all important agents of social changepoliticians, businessmen and trade unionsto change their mindsets as the decisions that they take or dont take will have profound implications on Indian youths future, on November 30, 2007.

Try telling this to union leaders who have condoned the ghastly killing of Graziano Transmission CEO LK Chaudhary in Greater Noida by his own employees on September 22, and pulled up Labour Minister Oscar Fernandes for apologising for his remark that the incident should serve as a warning to India Inc. The contract workers involved in Chaudharys killing had sought to register themselves with the two leading Communist parties {CPI and CPI (M)} trade unions, AITUC and CITU.

Indias militant trade unions attitude towards employers are mostly driven by their political leaders or/and local mafias agendas, without any consideration to the context of their industrys business and economic realities. Unless the employers remain globally competitive, job security can never be ensured for the workersa fact conveniently ignored.

That union leaders dont read companies balance sheets or track global prices for their companys goods is obvious. Datta Samants famous 1982-83 strike in Mumbais textile mills came at the worst possible time as companies were already struggling to compete with their World War II-era equipment and needed massive investments to revive their business. Samant ensured that the mills, which today are being redeveloped into plush malls and residences, could never recover, just like the families of their workersmost of whom had to fight protracted legal battles on their own to recover dues.

Not much has changed since the eighties. Even today, old fogeys posing as union leaders without any inkling of the realities and aspirations of Indias young workforce (our demographic gift, as they say), continue to bring industrial belts and clusters of the country to a halt. The government is now seeking to curtail the damage to Indias image so that todays thriving industrial hubs dont go the way of cities like Kanpur, historically known as the Manchester of India.

But the PM, who liberalised Indias industry when he was Finance Minister in 1991, has lamented Indias ancient labour legislations on a few occasions and his worries have turned out to be prescient in light of the Noida scar. Last April, while addressing the Indian Labour Congress, Singh had stressed that the confrontationist attitude some unions resort to is not constructive.

We cannot find viable solutions to our problems, working or thinking in isolation. To promote new employment, we need an environment in which both the government and the private sector are encouraged to invest. There is much that trade unions and business leaders can do to help us create such an environment, Singh had urged union leaders.

Our industrial relations policy must be sensitive both to the need to absorb new technologies and ensure competitiveness of our firms, as well as the need to create new employment opportunities and protect interests of the working people, he said, citing the Chinese model of industrial modernisation, which the governments Communist alliesat the timereferred to so often.

Try telling that to politicians like Mamata Banerjee, whos almost ensured that Singur will become an industrial ghost town like Kanpur and Kolkata even before it industrialised. Try telling that to her Opposition leaders in the state, whose unions routinely confront industry in all other parts of the country, having brought down most of the states own industries long back.

Praveen Singh

Kanpur used to be called the Manchester of the East, but no more. In an atmosphere of pervasive neglect, many locals blame politics for Kanpurs current industrial mess. Jobs lost have had a multiplied social effect, causing families to suffer and children to stop out of school.

The British India Corporation (BIC) mill at Civil Lines, perhaps the only live textiles mill here at present, seems almost dead. When this reporter visited it, some employees were taking a nap while many others were not at their seats at all. It seems to be running only to increase the number of running mills in the governments books. One of its employees told us that BIC used to operate three other mills earlier, but this somnolent Civil Lines one is the only one to have survived.

BICs fortunes started declining after it was nationalised.

The former state president of the Indian Industries Association Tarun Kumar Khederpal says that, The textiles industry started going into decline only after nationalisation, which did give job security to the employees but reduced their efficiency. But this so-called job security has been of a shaky kind, with more than 2 lakh workers losing their jobs as different textile mills started winding down.

Around 40 years ago, Kanpur was a hub for economic activities in UP and bustling with industrial activity. There were so many mills employing lakhs of people that the city used to come to a standstill at 5pm, when the workers stepped out for the day. Khederpal points out that all this changed when the Janata Party came into power at the Centre in 1972: As the then industry minister George Fernandes started nationalising various profit-making enterprises, we saw the beginnings of the citys decline, with corruption and strikes becoming commonplace. There was no one to monitor the performance of either the officers or and labourers, and no modernisation of man or machinery. Even mills that remained in private hands did not escape the wrath of the Red Brigades strikes. Some of these mills tried to impose tougher labour regulations along Gujarat lines, asking labourers to work for more hours. But once the red flag goes up on a factory, nobody can save it from closure, says Khederpal.

And BIC mills have not been the only ones to down shutters because of strikes. Swadeshi Cotton Mill, the biggest of employers, also went down in 1977, sparking a broader downturn in the whole economy. As companies started turning losses, unemployment started rising, purchasing power took a nosedive and the general demand for goods also started going downhill. Obviously this impacted the society at large. Khederpal says that people started becoming wary of marrying their daughters to Kanpur boys and the city saw smaller numbers of people coming in to work from other places. Among the lakhs of people who lost their jobs when strikes shut down different mills, many have turned against trade unions.

The JK group used to have around eight mills across the state and all of them are closed now. JK Jute Mill Mazdoor Panchayat Joint Secretary Comrade Daya Shankar argues that when the JK Jute Mill closed down all of a sudden in 2003, with the company claiming that it was running major losses, the workers were doing overtime and running the mill over and above its capacity, producing 90 tonnes a day when the mills capacity was only 80-85 tonnes a day. He says that the new owners, the Kolkata based Govind Sarda group, are asking workers to accept a lower wage rate, pushing the Mazdoor Panchayat to approach the labour court and the states labour department. Meanwhile, Shankar says, We are in a miserable condition. We dont have any jobs, our kids cannot go to schools and the grown ups have to drive autorikshaws. We want to work but there are no opportunities here.

In the Panki industrial area, on the outskirts of Kanpur city, an illegal strike led to an LML plant employing 2000 people shutting down in 2006. Production has now resumed, but only to serve export orders. The Duncan-Goenka Group has also closed down its fertiliser unit here. Meanwhile, the link road to the main city is in a dilapidated condition and the British-built railway network used to transport raw materials has not been renovated. Two of the areas 30-35 megawatt power plant units have been closed up on environmental grounds. Of course this infrastructural disregard is not helping the situation. Raju Misra, owner of a chemical and fiber factory in Panki industrial area, says, The closure of the LML and Duncan factories has created a sudden rise in unemployment. But new industrial units are difficult to set up as land rates are high and power supply and infrastructure are dismal. A state power plant employee from the area points out, Earlier, people lived hands to mouth, but now even that is difficult to afford. So many jobs have been lost in the past several years.

The industrialists have their own tales of woe. The Merchants Chamber of Uttar Pradesh Secretary A K Sinha asks aggressively: In the present day, why should one hire laid off workers His argument: Production costs include costs of manpower, raw materials and taxes. The taxes we could not control, so the costs could only be cut on manpower and materials. If an industrialist has to restart a closed factory, he would have to set up new machinery, as the old ones would now be of little use. The retrenched employees would also be out-of-date, both in terms of age and technological capabilities. Sinha also holds the government responsible for the dismal state of industry: There is no infrastructure in the city and no fiscal incentives from the administration. Beginning with ensuring regular power supply, the government could have done a lot. Instead, we have had 18 years of reforms that have only brought misfortune to the state.