labels: finance - general, economy - general, governance , investments
A redundant exercisenews
Uday Chatterjee
25 May 2003

Mumbai: India's struggle for freedom in the early years of the 20th century ushered in a unique phenomenon of protest called satyagraha. A satyagraha was a mass protest against certain laws or actions of the ruling British government. It was by and large non-violent and essentially involved non-cooperation or boycott.

Persons who participated in the satyagraha did it for ideological reasons and the participation was mostly voluntary. Of course, people were urged, cajoled and maybe coaxed into participating, but no one was forced to join such protests. An apolitical person could go on with normal life without joining such movements.

Came freedom - along with it our great economic and industrial journey - and the satyagraha morphed into what is today known as bandh. George Fernandes, the fiery trade unionist of the late 50s and 60s introduced this concept in the city of Mumbai. It meant that if the dock-workers of Bombay had some grievances regarding their payscales, the whole of Mumbai had to close shop - like it or not - notwithstanding the consequent loss to the economy. In other words: ransom.

Over the years the scourge of bandhs has spread all over the country like cancer. If you log on to the Internet search engine Google and search for the item bandh, you will find that between August 2002 and today's date, there are more than 1,000 stories on bandhs. A bandh almost a day, so to say. The bandh stories are from all over the country - from Tripura to Thane to Thirunelvelli. And for reasons ranging from the unfathomable to the more unfathomable to the most unfathomable.

Truly, bandhs have become a part and parcel of our daily lives.

Let us now come to the latest in the unending series of bandhs, which happened last week. This was a nation-wide bandh called by the left-oriented trade unions to protest against the government's ongoing labour reforms process and privatisation of state-owned undertakings. Banks that had gone on strike on 2 May 2003 also joined the party and so did the nationalised insurance companies.

The result of the strike was that life came to a standstill in the states of Tripura, West Bengal, Orissa, Andhra Pradesh and Kerala. Banking activity was crippled throughout the country. The trade unions' main grouse is that the labour reforms process seeks to give employers the power to retrench up to 1,000 employees without having to seek the nod of the government. As of now, employers have the power to retrench only up to 100 employees without seeking the permission of the government.

The concern is genuine and the workers have the sympathies of the public at large. However, in today's economic scenario, one has to take a practical look at matters. The industrial and manufacturing practices have changed drastically in the last three decades, which is evident by the number of sick and defunct manufacturing companies we see all over the country. Technological innovations, IT and rapid globalisation is the main cause of the malaise and the companies which fell by the wayside fell because they could not change and innovate with the changing times.

Change and innovation often means getting out of present practices and adapting new ones. This could result in some of the workers being rendered redundant, as they no longer fit in to the production cycle. If these workers are not retrenched the company gets overburdened and ultimately becomes sick and defunct.

A visit to any of the industrial estates in the country, be it Tarapore or Thane Belapur, will show that more than 40 per cent of the industries have closed shop and many of them because the labour laws were not proactive enough to enable these companies to adapt and change.

Not to be harsh to the retrenched worker, the reform process provides for safety nets and reskilling of the workers so that they can take up other activities. It is time that everyone realises that the days when a worker joins one establishment and retires in it are over. Today there is no guarantee that the establishment itself will be in existence after a decade or two and this is a global phenomenon.

Privatisation is another matter haunting the trade unions. Barring a few, all the public sector units are faring miserably. These units are a drag on the fiscal deficit and economic growth.

Job loss once again is a major concern here. The public sector Balco was recently privatised and no one lost his job. Sure, some of the employees were relocated but you cannot complain against that. The same is the case of Paradeep Phosphates which before privatisation was losing about Rs 50 crore a month. No one lost his job when the Tatas took over CMC and VSNL. The government's privatisation programme comes along with the provision that the workers interests will be kept in mind.

With all that there is some sympathy for the industrial worker but there can be no sympathy for the banks. Earlier this month they went on strike because the bank managers' salaries were not enough. To express their grouse they chose to go on strike on 2 May, a Thursday. The 1st of May was a bank holiday as also was the 3rd of May, a Friday. On Saturdays, clearing activity is not held and so cheques worth thousands of crores were not settled between Thursday and Monday. All because the bank manager wanted his salary to be raised from Rs 20,000 to Rs 25,000 or whatever.

Losses on account bandhs are estimated on the basis of man-hours lost, production halted etc. The All India Association of Industries has estimated that a day's banking bandh results in a loss of Rs 100 crore. A bandh in Mumbai costs Rs 100 crore, in the state of Maharashtra it costs Rs 200 crore and a nation-wide bandh costs Rs 1,000 crore.

It is left to you to imagine the cumulative losses that have incurred on account of the bandhs between August 2002 and date.


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A redundant exercise