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Labour's shadow over Bengal industry

Worker unrest is back to haunt West Bengal. The recent lynching of a mill executive has companies asking the government to act

Ishita Ayan Dutt  |  Kolkata 

It wasn't a regular meeting on June 16. The 20-odd industrialists were meeting Chief Minister and members of her industry core committee in the air-conditioned 'Glass House' on an island in Rajarhat's Eco Tourism park, 18 km from Kolkata. The discussions had been scheduled much before the events of the previous day, when had claimed the life of the chief executive of the Despite the horrific incident, much of the talk that day focused on the "glorious" development efforts of the new government, unforeseen in 34 years of Left rule. Until a lawyer struck a discordant note.

N G Khaitan, advocate and partner of the century-old solicitor firm, Khaitan & Co, brought the assembly back to reality when he pointed out to the chief minister that if the government failed to act on incidents like the lynching of the chief executive officer, then the history of the flight of capital from Bengal would be repeated.

This was the cue for others. Some of the industrialists are reported to have said that incidents like Northbrook indicated that the state wasn't fully sure of the peace and stability required for the growth of industry and business in Banerjee was also told that labour trouble of the sort affected the morale of industry. The chief minister is believed to have assured her guests that the government did not approve of any form of militant trade unionism.

A day earlier, on June 15, the mill management of in Bhadreshwar, Hooghly, had summoned to discuss a restructured work schedule that involved curtailing work hours. A heated exchange followed and CEO was beaten to death by agitated The weapons used included six concrete slabs, two bricks, four iron rods, uprooted iron grill railings, pieces of iron pipes and flower tubs.

At the meeting in Rajarhat, Khaitan, who is also the vice-president of the Bharat Chamber of Commerce, jogged Banerjee's memory by referring to a 45-year-old incident.

"I reminded the chief minister that in 1969, an expatriate CEO of a certain company had been beaten by The chairman of that company had gone to Writers' Building (the state secretariat) to seek help, but returned disappointed. Soon after, the company pulled out of Bengal," says Khaitan. Unfortunately, for Bengal, the tale of the exit narrated by Khaitan was not an isolated one; it was one of many.

Khaitan's is a cautionary tale for the Bengal of the 2010s that is trying to rebuild its economy by attracting industry to the state. Between 2005 and 2010, Bengal received investment proposals worth Rs 2,37,000 crore. But the euphoria hasn't lasted. The state's underlying will to protest has got the better of it.

The major setback was Dissent at Singur, the site of Tata Motors' global small car project, had been brewing ever since the project was announced by Tata's then chairman, Ratan Tata, and then chief minister But it was Banerjee's 26-day hunger strike that made it famous. She took the agitation to the project site, which ultimately led to pullout in 2008.

The Nano's departure had a two-fold impact on Bengal; it resurrected Banerjee's political career and sealed Bhattacharjee's fate. Armed with the credentials of having driven out the project, she routed the and got a thumping majority in the 2011 assembly polls.

Three years after the resounding victory, Banerjee is now at the crossroads. "That industry was not her priority was more or less known, but she had not bargained on industry pulling out from her state during her regime," says a bureaucrat. After all, reopening closed factories was her pre-electoral pledge.

In the last two months, however, two major plants - Jessop and Hindustan Motors' Uttarpara unit - have suspended operations. The managements of both the have cited labour problems as one of the factors behind the decisions. "Such closures are adding to the ranks of unemployed," says Dipankar Dasgupta, former professor of economics at the Indian Statistical Institute, Kolkata.

The process of Bengal's decline may have started soon after Independence when a large influx of refugees from East Pakistan into the state, according to Dasgupta. Further, with the freight equalisation scheme in 1956, which allowed coal to be carried at equivalent prices across the country, Bengal lost its natural advantage. This marked the beginning of economic decline. Did it also signal the rise of violent trade unionism?

Dasgupta rationalises that the two events affected each other. The incidence of industrial action in (measured by the ratio of days lost to days worked) increased sharply in the mid-1960s; its effect can be easily captured by some figures.

An Indicus Analytics report points out that West Bengal's net state domestic product (NSDP), a measure of how much a state's citizens are producing, at 1999-2000 prices, was Rs 27,000 crore in 1960-61, while Maharashtra's was Rs 33,200 crore. By 2005-06, Bengal's NSDP stood at Rs 1,73,800 crore, while Maharashtra's had zoomed to Rs 3,02,900 crore. The gap had widened significantly.

Every era in between has been marked by violence in Bengal. The 1960s-70s were marked by the Naxal uprising. It started off as a peasant uprising against landlords, but quickly spread to industrial towns and cities. The business community was shaken. For them, communism was a taboo, as clear from a scene in Satyajit Ray's film Pratidwandi. In the film, protagonist Siddhartha, at a job interview, is asked about the most significant world event of the decade. "The Vietnam war," replies the young man. A disbelieving interviewer asks him, "Not man landing on moon?" Siddhartha explains that technological progression would have made the moon landing a possibility sooner than later. The next question: "Are you a communist?" Obviously, Siddhartha doesn't get the job.

Reel or real, this scene rang true for Bengal. "The environment was not conducive for business development then, which was a problem," says Vinod Mittal, erstwhile promoter of Ispat Industries (renamed post-acquisition and merged into JSW Steel) and M L Mittal's younger son.

Mittal senior had begun the Ispat story with the takeover of an ailing rolling mill in Kolkata. In 1994-95, the company's corporate headquarters moved to Mumbai. "In the last few years before our move to Mumbai, the situation in Bengal had stabilised, but there were new business opportunities in Maharashtra," says his son.

Mittal was not the only one to move out. If the '60s and early '70s can be identified with the Naxal movement, then the '80s through to the '90s could well be referred to as the period of militant trade unionism. In July 1998, for instance, Keith Weston, managing director of Bata, was hospitalised with a deep gash following an assault at the hands of a trade union leader. Not much later, the company moved its headquarters from Bengal.

Militant trade unionism, coupled with a slow moving economy, spurred the exit of many From tea major India to ICI India, Shaw Wallace, the Singhanias of and electronics giant Philips India, all deserted Bengal.

In the latter half of 1990s, the government, realising its folly, decided to promote industry. Chief minister kickstarted the process with an industrial policy in 1994, but his successor, Bhattacharjee, gave it shape. In 2010 he got Wipro, was eyeing Infosys and had lined up a 10-million-tonne steel plant by JSW Steel. Videocon and Bhushan Steel, too, had planned mega steel projects.

Now the Jessop, Uttarpara and Northbrook events have cast a shadow on industry. Are these a reflection of Bengal's decline? There is no easy answer at this point, but on June 26 the state government resolved to take up some of the sector's problems with the Centre. However, this promise has to be taken in the context of Labour Minister Purnendu Bose's comments shortly after the incident at Bhadreswar. It was the management of Northbrook that Bose blamed for the incident. The minister said that the management had not informed the state government about the deteriorating relations at the mill even as six affiliated to Bharat Mazdoor Sangh and Centre of Indian Trade Unions were arrested. Clearly, the more things change, the more they stay the same.

First Published: Sat, June 28 2014. 21:12 IST