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Reuters/Ajay Verma
Up in arms.
STOP

India’s trade unions pull off one of the biggest strikes in decades

By Madhura Karnik & Manu Balachandran

Ten of India’s big trade unions are showing their might to prime minister Narendra Modi.

In a one-day strike, about 150 million workers across sectors from banking to transportation are protesting against Modi’s new labour policy—making this one of the biggest strikes in the country’s history.

However, two unions—the Bharatiya Mazdoor Sangh, led by the Bharatiya Janata Party, and the National Front of Trade Unions—did not participate.

The strike affected banks where many deposit and withdrawal counters remained unmanned. Public transport, including auto-rickshaws and taxis, across major metros like Delhi, Kolkata and Mumbai did not ply. Clashes were also reported in some states.

Modi’s attempts to reform India’s labour laws was the main reason behind today’s (Sept. 2) strike. A new lay-off policy for public and private factories is one of the most controversial proposals in the bill that is being drafted by the labour ministry.

Currently, factories that employ 100 workers or more need an approval from the government before firing employees. But the Modi government has proposed that factories with less than 300 workers should be allowed to lay off employees without any such permissions.

This change makes it easier for companies to scale down businesses in a downturn.

The labour ministry also wants to make it tougher for workers to form unions or go on strikes. The reforms will also ensure minimum wages for all employees.

If the government’s proposed policy goes though, it would be one of the biggest economic reforms in the country since 1991. But while these changes have been welcomed by the industry, expectedly they’ve received much flak from labour activists and unions.

For long, India has been criticised for its rigid labour laws. The World Bank has said that in India, the most controversial laws regulate worker firings and closures of manufacturing firms. ”Although the regulations are meant to enhance the welfare of workers, they often have the opposite effect by encouraging firms to stay small and thus circumvent labor laws,” it said in a report (pdf).

 ”Without these reforms, the economy would stagnate, and frustrated investors would look elsewhere,” Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight, told Reuters in June. “You cannot make political opposition an excuse for not taking tough decisions.”

The unions have raised ten other demands, including controlling price rise, reducing unemployment, setting up an universal social security cover for workers and assuring minimum wages of not less than Rs15,000 ($226).

These demands, the unions say, have not been met.

“They have not offered any concrete assurance regarding our 12-point charter of demands. They are trying to mislead people by saying that in-principle they agree with our demands. There is no meaning of in-principle agreement,” the All India Trade Union Congress secretary D L Sachdev told the Mint newspaper.

The unions also want the government to scrap its plans of selling stakes in state-run companies. Arun Jaitley, India’s finance minister, wants to offload the government’s stake in these companies to cut down the country’s fiscal deficit. This year, the government plans to rake in Rs69,500 crore ($10.5 billion) from disinvestments.