It is generally acknowledged to be true that restrictive labour laws that prevent even relatively small factories from controlling the size and composition of their workforce are among the biggest constraints on the growth of Indian manufacturing. It is also widely acknowledged that these absurd laws are very difficult to change, for political reasons. After all, labour ministers almost always have close links with the trade union movement; the parties to which they belong have captive trade unions that are a crucial source of political mobilisation - and one of the few locations, in most dynastic and closely held Indian parties, for vertical mobility as a politician. And Indian trade unions have traditionally prized job security for their members above all, and protect only the wages and employment of "insiders" - those who already have regular jobs in India's minuscule formal sector.
It is possible that this self-reinforcing system that keeps Indian manufacturing stagnant is beginning to change - and that change will come from the most unlikely of sources. According to a report in this newspaper, trade unions are claiming a dramatic rise in their membership. The process is straightforward: unions submit membership claims to the labour ministry, which then validates them by carrying out a sample survey. In 2008, when the last such sample survey was completed, the number of members of the five largest trade union conferences - four of which are associated with a political party - was 20.1 million. According to the claims that unions submitted last month to the ministry, they now have almost 80 million members - four times as many. Even if this number is reduced considerably following the ministry's survey, it is more than clear that a massive increase in enrolment has occurred, and that the long-predicted death of the Indian trade union is not in fact around the corner.
How has this increase in membership occurred? Part of it is because of the emphasis that parties have lately put on increasing their primary membership. The Congress affiliate, the Indian National Trade Union Congress (INTUC), has seen the biggest spike in its claimed membership - from 3.9 million to 33.3 million. Whether or not this has electoral repercussions remains to be seen, but it is not beyond the realm of possibility that it will. More importantly, however, unions have expanded not because of any increase in the size of the formal sector, but because they have aggressively solicited memberships from contract workers and even agricultural labourers. The construction industry has reportedly provided great numbers, as well as those providing low-end services such as domestic workers. The Bharatiya Janata Party's union, the Bharatiya Mazdoor Sangh (BMS), has apparently worked the hardest on expanding the number of women and domestic workers on its rolls - and has grown from 6.6 million to 17.1 million in membership, it claims. If this is so, and trade unions are beginning to more accurately reflect the diversity of the Indian workforce, it cannot be seen as anything but good news. If India's unions cease to lobby solely on behalf of insiders with formal permanent jobs as opposed to workers in general, then the time is not far off when the number of jobs available will become an issue as important to them as job security for those already employed. And, in that case, it is more than likely that future labour leaders and labour ministers will no longer see overly restrictive labour legislation as sacrosanct.
