BackUPA does a flip-flop, bats for labour unions
Prime Minister Manmohan Singh signals shift, dwells on need to improve employment conditions
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New Delhi: Ahead of the election season, the Congress-led United Progressive Alliance (UPA) seems to be toning down its reform rhetoric and instead focusing on sending out a more electorally friendly message.
Prime Minister Manmohan Singh signalled this shift on Friday, when he dwelt on the need to improve employment conditions, where previously the emphasis was on labour market reforms that would allow employers more flexibility in dealing with workforce-related issues.
In his speech at the 45th Indian Labour Conference, Singh backed the trade unions and emphasized the inclusive mantra pursued by the UPA, citing the Mahatma Gandhi National Rural Employment Guarantee Scheme that offered 100 days of work every year to at least one member of each rural household, and the Rashtriya Swasthya Bima Yojana (RSBY), or national health insurance scheme, for the needy.
“Ever since the UPA government came to power in 2004, we have endeavoured to work for the welfare of workers," Singh said. “When I look back...I feel a sense of satisfaction that we have delivered substantially on the promises we had made at that time."
He also said the government had paid “very serious attention to the issues that trade unions have raised from time to time".
“For example, demands for concrete measures for containing inflation, for generation of employment opportunities, for strict implementation of labour laws are unexceptionable. There can, however, be differences on the best ways of fulfilling these demands, and we are willing to engage constructively with the trade unions in this regard," the Prime Minister said.
Last year, addressing the same gathering, Singh had said that rigidity in labour laws was hurting employment growth. “Though our government remains committed to protecting the interests of our workers, we must periodically take a critical look whether our regulatory framework has some parts which unnecessarily hamper the growth of employment, enterprise and industry without really contributing significantly to labour welfare," he had said on 14 February 2012.
While reformers may baulk at this, analysts and trade union representatives argue that the softening of such rhetoric may pay electoral dividends for the Congress party, which faces a clutch of state polls in the run-up to the general election due next year.
“Last year, the Prime Minister talked about labour law reforms and how rigidity of labour laws is hampering job creation, but this time he was more conciliatory in nature," said G. Sanjeeva Reddy, president of the Congress-affiliated Indian National Trade Union Congress (INTUC). “He gave assurance on social security. This will benefit the party in an election year."
INTUC has a membership of 32 million and any attempt to provide better social security will improve the electoral chances of the party, he said.
“On 22 May, we have a meeting with a group of ministers and we believe that the government will concede a few of the demands raised by the trade unions during the 20-21 February nationwide protest— ₹ 10,000 minimum wage, increasing the provident fund ceiling from ₹ 6,500 to ₹ 15,000 are a few of them," Reddy said.
The trade unions are due to meet with a cabinet sub-committee next week to discuss social security measures for employees.
Significantly, Singh alluded to this in his speech. “The recent two-day strike by trade unions focused on a number of issues relating to the welfare not only of the working classes, but also the people at large. These include demands on which there can be no disagreement," he said.
However, rival unions argued otherwise.
“These are nice words before elections. He is talking about social security, but who was preventing them from implementing them for the last nine years. Except the RSBY, all other things, including ₹ 1,000 minimum pension or ₹ 10,000 minimum wage for workers, have not been implemented," said A.K. Padmanabhan, president of the Centre of Indian Trade Unions, which is affiliated to the Communist Party of India (Marxist).
Jai Mrug, a Mumbai-based political analyst, said the change in the government’s stance could be partly because “in an election year they don’t want to talk too much about reform".
Secondly, it could be the influence of the National Advisory Council led by Congress president Sonia Gandhi that sets the UPA government’s social agenda, Mrug said. But if the UPA were to win another term, it would do a rethink, he said.
Unless the government reforms labour laws and allows a policy that promotes a flexible workforce, job creation may not be very significant, said E. Balaji, chief executive officer of human resources and staffing company Randstad India.
“Industry-friendly atmosphere helps job creation. Labour law reform has its own benefits, but it has its pains," he said. “In the run-up to the election, the government might be thinking that this may not be the best time to go for it. Instead, it may stick to safer subjects like skill development, inclusive growth, etc."
The Prime Minister sought the cooperation of both industry and trade unions to reverse India’s economic slowdown. “In recent months, we have taken a number of steps to boost investment, encourage enterprise and improve business sentiment. We have paid special attention to the need for removing bottlenecks that hamper new industrial activity," he said.
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