Nationwide stir will not help anyone

The call for a nationwide strike on September 2 by central trade unions is ill-advised and wrongly motivated. A strike by most workers in the organised sector now is not in the best interests of the country. Nor is it in the interests of the workers. Workers in the defence sector and the railways will not participate in the strike. However, the railway workers have called for a separate strike later this year. But bank unions, which had threatened to go on strike earlier this year and had many of their demands accepted, will join the strike. Before that, coal miners had gone on a strike. The proposed strike is in protest against the government’s labour policy and in support of demands like protection for the public sector, implementation of social security schemes, strengthening of the public distribution system and curbing of inflation. There is no threat to social security schemes and, in fact, the social security net has expanded. Inflation is declining. So, some of the demands are actually redundant. Others have been raised more to protect the entrenched interests of sections of workers than for the common good.

The unions’ main opposition is to the proposal for changes in labour laws which are intended to make them less rigid and to bring them in line with the needs of a growing economy. As part of labour sector reforms, the government wants to simplify the laws and reduce their multiplicity. For example, amendments have been proposed for the Factories Act and the Apprentices Act to change the definition of a factory and to rationalise hours of work. Some of the proposed changes, at the same time, seek to strengthen the service conditions of workers. Some states have already introduced changes in labour regulations.

Rigid labour laws are among the major factors that deter investment in the country. While no one would advocate an unbridled hire and fire policy, there is the need to relax the policy and make the sector more dynamic. The organised unions, in fact, represent only a part of the country’s work force. Undue and excessive protection results in inefficiency, complacency and low productivity. It also shuts the door on entry of new labour force into the market. A recent study by CRISIL has shown that labour reforms can create many more millions of new jobs in the manufacturing sector than it is possible if the present scenario continues. There is an opportunity now for India to attract more international investment. This will not be possible without a conducive labour environment.