There are several things that stand out in the aborted flash strike by employees of Air India last week. First, very obviously, was the stern crackdown by the government, which was largely endorsed by public commentators. Second is the lack of a strategic initiative among the unions, which cost them critical public opinion, in calling for a strike just two days after tragedy struck in Mangalore with the crash of the Air India Express flight—leading to the death of 158 passengers and crew. Third, the episode has successfully moved the focus of the debate away from the misdemeanours of the leadership, both political and managerial, in landing Air India in the fiscal mess that it finds itself in.
Surely, Praful Patel, minister for civil aviation since 2004, has to shoulder the bulk of the blame in pushing through the purchase of an excessively large number of planes, ramming through a merger of Air India and Indian Airlines and operating a revolving door with the executive leadership (the airline has had three chairman and managing directors in the last two years). Some of the blame should also go to his predecessors for not planning a rational road map before opening up the otherwise protected aviation sector to private players. All that has contributed to saddling Air India with a net loss estimated at Rs5,400 crore in 2009-10.
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Finally, in an important subtext, the episode reflects the unravelling of a very important sociological battle within a very important demographic of India: the new middle class. This is the political economy of the Air India strike.
As the country’s growth process accelerates and the middle class burgeons from its present level, estimated optimistically at 300 million—almost the size of the US population—the stakes in the battle will be that much higher; more people from different socio-economic strata are bringing about an unprecedented heterogeneity in the middle class. It is, therefore, a battle that will define, in this case, the future of industrial action in a certain class of services. At a broader level, it underscores the importance of the new middle class—who form the key beneficiaries of the growth accruing from a liberalizing economy—as an important social grouping.
If for a moment we ignore the myopic response of the unions’ leadership in calling for a strike in the immediate aftermath of the Mangalore tragedy, you have what would normally be described as an industrial action. Given the nature of the utility, it was evident that this would, despite the presence of private operators, have a widespread impact on an entirely new set of stakeholders. Now, thanks to the proliferation of air services and, more importantly, the drop in ticket prices, air travel is no longer an elite preserve and has become a mass consumable service; based on anecdotal evidence it can be claimed that the middle class is a very dominant segment of the passenger traffic. On the other hand, those who struck work too are clearly middle class, similar to those who use aviation services.
Conventionally, it is the middle class that shapes public opinion. So what we had was a rare battle within this very articulate demographic segment; it was not a clash between the haves and the have-nots—like say in the historic strike by textile mill workers of Mumbai in the early 1980s. Assuming that this confrontation had not happened in the backdrop of the Mangalore tragedy, it would be difficult to pick between the two sides: Were the employees right in going on strike, ostensibly to protest a gag order issued by the management after the Mangalore air crash, or were the users right in opposing any dislocation of services because of the industrial action?
The unions have the advantage of being cohesive; this flows from their being organized and fighting for a common cause. Users of aviation services, on the other hand, are more disparate, but very important stakeholders in modern Indian society—imagine the loss of business opportunity that people had to incur because flights got cancelled, besides the hazards of dislocated logistics.
Going forward, this battle is likely to play out again and again—whether it be in telecom services or banking services and so on. All the more since the Indian economy is unlikely to shed its recently acquired contours with over 50% of the country’s gross domestic product accruing from the service sector—not surprisingly it is also the largest employment generator and the reason why the new middle class has such a stratified construct.
Going by the experience of the Air India strike, it is apparent that some contours of the debate are being slowly defined: While it is likely that users of these services would shrug off a momentary dislocation, they are unlikely to support a prolonged disruption.
But this is just the story of the engagement of the middle class within itself. More curious will be the experience of its dialogue with the rest of the country, especially the 500-odd million not so well off whose priorities are contrary to that espoused by the middle class. Another story in itself; and something that will define the future socio-economic fabric of India.
Anil Padmanabhan is a deputy managing editor of Mint and writes every week on the intersection of politics and economics. Comments are welcome at email@example.com