labour strike shows challenges in reform path
Wednesday's all-India, 24-hour strike, called by 10 trade unions, which had 15 crore people across the country suspend all work for the day to protest against labour law changes, is a reminder of the enormous challenges in the Government's path to large-scale reform. Prime Minister Narendra Modi was brought to power last year with a historic once-in-a-generation mandate because the people believed that he had the ability to push through these difficult measures or, in other words, administer the bitter pill necessary to improve the health of the nation.
Yet few want to gulp down the bitter pill themselves even though everybody agrees that medicine doing so is necessary for overall improvement. In general, there is consensus among all stakeholders including trade unions that labour reforms are absolutely crucial to spur economic growth. However, when it comes to the details of how those reforms should shape up, there is widespread disagreement. This is on expected lines. Issues such as privatisation, disinvestment and foreign investment, which feature at the top of the trade unions' grievance list, have always been a matter of debate.
Similarly, the demand for codifying minimum wage also deserves to be discussed threadbare. On the one hand, it can be argued that the state should set salary benchmarks to ensure a basic standard of living but on the other, it can also be said that the free market is the best arbiter in these situations. There is no single right or wrong answer here, and ultimately, it will be the Government's responsibility to bring everybody on the same page. To be fair, the Modi regime has sought to build consensus with the trade unions and there have been several meetings between the two parties.
However, as Wednesday's strike — felt across the country including in BJP-ruled States (even though the big trade union associated with the party had withdrawn support) — shows, this is just the beginning of an uphill battle. It will require a sustained and comprehensive effort, not just in terms of pushing progressive laws but in the leveraging of political capital and statecraft as well. The BJP and its allies must also be prepared to deal with the electorally decimated left parties which are already using the issue to script a comeback for themselves.
The Government will have to fight the deep-seated popular notion that business-friendly rules are somehow anti-labour or that laws that favour the employer must, by definition, go against the interests of the employees. For far too long, a risk-averse Indian polity has shied away from tackling these issues head-long, resorting to populist measures instead that bring benefits to the workers in the short-term but ruin the economy in the long term (think West Bengal). And this is just one side of the story.
On the other side, the Indian labour market is one of the most rigid in the world and yet, despite labour laws that many argue are so tough that they are snuffing the life out of local businesses, the average Indian worker is increasingly insecure. Thousands of unskilled workers are still outside the organised sector while skilled workers are losing job benefits every passing day. Clearly, there is some sort of a disconnect in the larger picture, and even the trade unions must take responsibility for this.