labels: economy - general
Kerala sets an example news
James Paul
13 March 2002

Thiruvananthapuram: Its a major and deserving setback to the militant trade unionism that chewed Keralas psyche and physique to a pulp. The 32-day-old strike of state government employees and teachers, which was called off on 9 March, has sent a strong message to the industry and investment community in the state: Keralas new political leadership is no longer challengeable by the so-called unity of often nonsensical and always belligerent trade unions.

The United Democratic Front governments bold stand has sent out a vivid message that there is no going back on its stand from the well-planned and ambitious fiscal reforms agenda. The strike was called off following the talks Chief Minister A K Antony and his ministers made with the revolting employees.

The government only agreed to reduce the discount rate of the commuted value of pension, which was enhanced from 4.75 per cent to 8.75 per cent in January 2002, by about 2 per cent, and pay full salaries to protected teachers until June 2002. But the government did not consider the other major demands put forward by the employees. As it stands, the employees and teachers will not get their salaries for the period they were up in arms.

The most significant aspect of the Antony governments decision to curtail the commutation and leave surrender benefits of the employees and teachers is that it has come against the backdrop of the second-generation economic reforms, mostly at the state-level.

What Kerala witnessed for more than a month was a litmus test of the reforms agenda, and the pro-reforms section in the Indian political establishment can now feel happy that they have scored a victory in the first round. Madhya Pradesh had already taken some steps in this direction and was faced with a discontented staff, and Maharashtra is now marching down the same path.

Elements of the medium-term fiscal reforms programme, which was implemented in Kerala in pursuance of the letters of shared goals that the state had signed with the central government, are now evident in the measures taken by Antonys government. As per the tone of this years state budget, more such measures could be expected in the days to come.

Among the measures that are likely to be implemented in the coming days are: higher charges for services rented by public utilities, like the Kerala State Electricity Board and the Kerala Water Authority; the restructuring of public sector units with private participation; and the elimination of subsidies.

Since the government has amply demonstrated its willingness to cut down on benefits citing its inability to pay, it is unlikely to even give a thought to revising the government employees payscales. Nor would the employees be in a position to raise the demand in a convincing fashion.

Another major outcome is that Antony has strengthened his individual position through this strike. Perhaps no other chief minister in the state has shown that kind of staying power Antony performed during the period of such a ferocious strike. Antony was often referred to as Mr Clean, but this is the first time he is called Mr Strong.

Overnight, he turned out to be capable of taking harsh decisions and defending them, too. The organised might of the government staff unions has been the biggest block in mounting any administrative reforms, let alone economic reforms, in the state. Antony is now better placed to carry out his plans for a new Kerala, which he has been talking about ever since he assumed the chief ministers mantle.

The handling of the strike is sure to win him political mileage from across the nation and this will refurbish his image as a weak chief minister. And many state governments will, no doubt, take a leaf out of Antonys holy book.



 


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Kerala sets an example