Red signals

Threatened railway strike shows problems with Indian unions

The All India Railwaymen's Federation's (AIRF's) threat of a general strike if its demand for a new Pay Commission is not granted is a reminder of the intellectual bankruptcy of much of the trade union movement in India. Stuck in a paradigm of aggressive demands and confrontation, trade unions and their leaders are increasingly behind the curve when it comes to a responsible protection of labour rights. The latest demand is a case in point. The AIRF may hope for a repeat of the 1974 saga when the country was crippled by a railway strike. But times have changed and so has the dominant position of railway services. The Railways, India's largest employer with 1.4 million employees, has been steadily losing share in the freight business, which accounts for the bulk of its revenues, to road transport. The utility is only just showing some signs of better health thanks to a long-delayed rise in passenger fares. It is vastly overstaffed and constrained from cutting this flab on account of union pressure. Like all government employees, its employees are partly protected from inflation by a price index-linked dearness allowance, a benefit many private sector counterparts do not necessarily enjoy. The need for a pay hike in the middle of a global slowdown is not clear.

Indeed, these pressure tactics do more than a little disservice to the cause of labour rights in India and hardly enhance the reputation of its labour unions. In any case, India's trade unions disproportionately focus on the minuscule organised sector. Since the public sector accounts for a bulk of this - some 20 million of the 30 million employed in the organised sector - it has been easy to mobilise them as a power base. The consequences of this, however, can be seen in the unfortunate condition of a vast proportion of unorganised labour - almost 480 million - which enjoys few rights and benefits. A Bill to introduce pension and provident funds for the latter has been languishing in Parliament for years, the victim of serial disruptions that have come to mark every session.

Equally, however, as competition rises in market after market, labour unions are also proving to be less beneficial even for their traditional constituencies. One example is BSNL, the state-owned national telecom provider with famously appalling service. Private telecom competitors have made it all but irrelevant, hurting its employees. Yet the obvious revival route via privatisation has been stalled owing to powerful union pressure. It's the same case in Coal India, the monopoly coal producer that has suffered all the classic problems of government ownership. Unions most fear the lay-offs that inevitably follow privatisation, ignoring the fact that keeping a firm on life support does not enhance the career progression or employability of its workers in any case. Nothing illustrates this better than the state of West Bengal where militant trade unionism nurtured the successful political careers of many a Left politician, including the late Jyoti Basu, whose birth centenary was recently celebrated, and current Chief Minister Mamata Banerjee. The sustained flight of capital that has followed as a result has left workers in the lurch and created a vicious cycle of discontent and political violence. The Railway unions can ignore these red signals at their peril.