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At a time when Gujarat is trying to consolidate on its 'pro-industry' image with several industry friendly policies, the growing labour woes in its backyard seem to be offering a tough challenge. Sample this; while Gujarat contributes 7.5 per cent to India's GDP and more than 10 per cent of the country's factories, it also had a 21 per cent share of the country's labour strikes.
The state has earned the dubious fame of witnessing the maximum number of strikes during 2014 at 26, followed by Tamil Nadu and Kerala. In fact, while the total number of strikes across the country actually decreased from 177 in 2013 to 126 in 2014, according to Union Labour Minister Bandaru Dattaterya's reply in Lok Sabha recently, the 'industry-friendly' state witnessed a 36 per cent rise in number of strikes.
From 19 strikes and lockouts in 2013 to 26 in 2014 (as per Dattatreya's reply in Parliament), Gujarat definitely had to deal with a sizeable number of disgruntled workers. What's more, the discontent is gradually crossing the factory gates and affecting sections of workers in public utilities among others.
As per the Socio-Economic Review 2014-15, during the calendar year 2014 (upto October) incidence of 23 strikes and lockouts have been reported which have affected 3663 workers and a total of 47,889 man-days lost.
However, if we take a step back and look at the big picture, 2014 and 2015 so far has been also a year, when the state was plagued by worker and/or employee unrest not just across its factories but also its public utilities and institutions. For example, as many as 39,000 employees of the Gujarat Road Transport Corporation went on mass casual leaves in April 2015 demanding a hike in salaries and also protesting against the move to amend the Road Transport Safety Safety Bill of 2014. The strike practically paralysed 129 bus depots across the state. This was preceded by 4,000 workers of the Ahmedabad Municipal Corporation going on strike in January 2014 demanding permanent employment and a regular payscale.
The state government obviously was disturbed by the developments, so much so, that in the latest amendment of the Labour Law it has proposed to amend the Industrial Dispute Act empowering the state government to ban strikes in public utility services for one year (the first year and subsequently for up to two years).
Labour rights activists like lawyer Nihil Mehta, who is also the president of the Gujarat wing Indian National Trade Union Congress (INTUC) point out that the latest amendments approved by the state government would only brew more discontent among labourers and Gujarat is set to witness more labour unrests in the coming years.
"While the state government made payment of wages by cheque instead of cash compulsory, and has also raised penalty rates for violation of various labour laws, it has also allowed self-certification cum consolidated annual return scheme (earlier one had to file monthly returns) for employers. This would basically reduce inspections by factory inspectors and interference by authorities, and is not a good sign for labourers," he added.
Government labour department officials, however, choose to differ. They point out that the minimum wages for workers in the state have been raised to Rs 300 per day from a current Rs 100 per day. "The government has also revised the bonus payments. Labourers would stand to gain from the policy. And as such, the relation between employers and labourers is far better compared to many other states," the official claimed.
A senior industrialist in the state who operates an unit at Sanand says on grounds of anonymity that that Gujarat has indeed seen some unionisation in the recent past. "As any industrial estate matures, there has to be more congregation of labour, as they become more aware of their rights. However, there also have been instances when the agitations have been politicised deeply. All unions are nonetheless politically affiliated. Labour reforms would need political maturity and strong will," he felt.
He might have a point there as one does not see much unionisation at the Sanand factories, which houses big manufacturing units like Tata Motors and Ford India, apart from their global vendors, Hitachi Hi-Rel Power Electronics, Nestle, Teva, Bosch Rexroth. Industry insiders feel the reason behind the lack of unionisation at Sanand is that it is a relatively new industrial estate. The older ones like Halol have had their fare share of labour issues. A case in point being General Motors India's Halol unit.
The question that naturally arises is that is Gujarat a safe haven for companies like Maruti Suzuki India who are flocking to the state wooed by its industry friendly policies? The company itself has been plagued by persistent labour trouble in the National Capital Region. The answer is perhaps blowing in the wind; a senior bureaucrat in the state government who has been working closely with industry said, "No state can give an assurance against labour unrest. Industry would always want to push for pro-industry regulations, but as a welfare state, the government too has to strike a balance somewhere. While big corporates seldom tend to violate labour laws, it might not be the same for the mid-tier units."
For a state where the manufacturing sector accounts for 28 per cent of its GSDP, the choice is indeed a difficult one. While its industrial policy talks about facilitating large or mega projects, it also speaks of promotion of labour intensive industries. The figures, however, tell a different story. According to the Socio-Economic Review 2014-15, the employment in all factories covered under the survey (Annual Survey of Industries 2012-13), inclusive of managerial, supervisory and clerical personnel has decreased from 1.38 million in 2011-12 to 1.35 million in 2012-13. This is at a time when the number of factories has actually increased from 22,220 in 2011-12 to 22,587 in 2012-13.
So much for labour reforms; experts, however, feel otherwise. As Sebastian Morris, faculty member at the Indian Institute of Management- Ahmedabad said, "A country should take up the issue of labour reforms when it is in a boom time. During an economic recession, one needs to focus on fiscal and monetary reforms that would push the economy. Labour unrest is more common during a downturn."
