The Examined Life

Where I torture reality till it confesses the truth

More on Gurgaon

Nitin Pai correctly points out that the brutality in Gurgaon is a case for labour reforms, not against.

And by the way, all those who are trying to link the decline of trades unionism in India with its economic reforms, please stop. You are displaying not only your youth (which you may not mind), but also your appalling ignorance, which you might, unless you are a journalist.

I saw the decline of trades unionism in India sitting at my mother’s knee, and let me assure you, I was too old to sit at her knee in 1991. Every year at Diwali time, we used to hear of some company that had declared a huge bonus. The news was recounted to me in mournful tones, not out of envy, but because we knew that the company would not exist the next year. Usually, the company had succumbed to pressure from the union and had given away more than it could afford, in the desperate hope of keeping its factories running for another year. The union leader who secured the workers’ “rights” was usually the person known as Datta Samant. I recommend you look him up. He was single-handedly responsible for the destruction of Bombay’s industry. He was shot dead eventually, but it was too late.

I have an uncle who suffered through the long textile strike started by him- around 1981. The strike achieved jack for the workers, but weakened the textile mills so much that they spent much of the next decade shutting down, one after the other. Under India’s labour laws they couldn’t lay-off a single worker, so the mill-owners simply shut down the mills and opened new ones elsewhere, where they didn’t have to deal with strikes every single year.

Trades unions were taken over by gangsters – and this was a direct result of labour laws. The “Union Leader” could beat up the managers and still get away with it. That was because any attempt to sack them would be met with strikes, which, however illegal, were invariably upheld by the courts. This meant that the most thuggish union leaders got the best results – in the short run. In the long run, of course, the companies shut down. Incidentally, I highly recommend the movie Aghaat for a realistic depiction of how things were. I must point out that the movie was made in 1985, much before anyone had heard of liberalization.

The only way factory owners could run their mills, other than succumbing completely to the unions, was to hire thugs themselves. I won’t get into a discussion of who started the thuggery first. It was a en escalating spiral as each side resorted to more and more thuggery.

All these could not continue for ever of course, and it didn’t. The managers started realising that there was a world outside Bombay. They started their plants outside the city, in far-flung areas, where people were hungry for jobs. Chastened by their experiences, they tried hard to ensure that unions did not form – and they largely succeeded. Then they simply abandoned the factories in Bombay. They declared a lockout and, well, what could the unions do? The lockouts were often illegal, but given how well our courts function, there was no hope of a successful prosecution. Remember what I wrote once about the legal system? That the poorest are hurt the most from the delay. This is where I gained the insight. Rich company owners could wait out the long court cases. The poor workers could not. The latter succumbed and compromised. This pattern was repeated in company after company, including where my mother worked.

From what I gather about the Honda case, it is following the pattern. No one is clear about it, but I understand that Honda doesn’t want a union to enter its premises, the communists are trying to get their union in, and both sides are resorting to thuggery. Deja vu.

If you really want to get a better deal for workers, unions aren’t going to get them. They might for some workers, but it will be at the expense of other, non-unionised workers – like contract labourers. If you force the industry to compulsorily allow unionisation, you will end up retarding industrial growth and causing massive unemployment, as they have managed in Kerala and West Bengal.

Here’s an idea – do away with our awful labour laws. If we need to have them, they should only provide for enforcement of contracts between workers and the management. Make the right to form unions and the right to strike presumptive rights – i.e. valid unless the workers agree not to do so, as a condition of employment. You will find that the lot of workers will improve from the only cause it has ever done – a tight labour market.

11 Comments

  1. Easier said that done…

    In Indian polity Socialism is still a virtue and welfare means harassment of entepreneur.

    By the way about Bombay, although I am not sure, I think there were other reasons at work, like expensive real estate and standrad of living,
    want of latest technology due to rigid import restriction, and ofcourse good old red tapism

  2. What you are saying is absolutely correct……… When the DEMAND exceed the SUPPLY, there is an heart attack !!! and the factory dies

  3. There is another angle which requires more attention. Its the gunda-gardi attitude in india thats prevalent in almost everything. I dont give a rats ass about who screwed you….but how dare you burn a police vehicle damage public goods. This kind of nonsense destruction happens for no good reason over any issue in india.
    When i was in india the aarakshan (reservation) was the big isssue.
    My school was shut down b/c there was a mob of protestors outside Next day i saw damages to the signs on road, bus stop, street lights.
    I could not understand wtf did the street light have to do with the reservation issue. How can a bunch of rowdy howling hecklers solve any problem?
    I can understand the opposition to policy X by the government but why damage property, close schools call for a ‘band’?
    How does that advance any one’s agenda?
    If you think you’d be better of with another policy and want to work towards it good but why deny your fellow citizens public goods.
    It really has nothing to do with any political agenda, it reflects lack of values.

  4. there is something interesting about labour laws in india… what i hav experienced in last few years …
    1> if employer dont pay enough to diff dept. inspectors.. he/she is in for real trouble….
    2> my only conclusion is, i would prefer not to open a factory, but work undersome as servent. In india , those who open factory , they should hav clear picture in mind,, either he should exploit the situaion otherwise laws will exploit him.

    God bless to indian factories.. Someone rightly said india mai trading kar loo , lakin factory open karne ki bewkufi kabhi mat karna…
    Mera bharat mahan, 100 mai 90 baiman … phir bhi mera bharat mahan

  5. Gurgaon to become a slum city

    The way illegal construction is spreading and multi-storied houses are beig constructed where the housing society rules permit just single story is going to to tax the general public as well as builders and industry.

    The water shortage will increase, sewerage system will come under pressure and property prices will come down.

    It will be in interest of Builder lobby, Indutry and Government to stop such illegal construction by empoying heavy penalities and charging for demolition. Only then public wil be able to benefit really by Gurgaon’s advancement. Otherwise Gurgaon will only move faster toward become a slum.

  6. Gurgaon to become a slum city
    =========================

    The way illegal construction is spreading and multi-storied houses are beig constructed where the housing society rules permit just single story is going to to tax the general public as well as builders and industry.

    The water shortage will increase, sewerage system will come under pressure and property prices will come down.

    It will be in interest of Builder lobby, Indutry and Government to stop such illegal construction by empoying heavy penalities and charging for demolition. Only then public wil be able to benefit really by Gurgaon’s advancement. Otherwise Gurgaon will only move faster toward become a slum.

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