FROM BUSINESS WORLD OF 2 AUGUST 2005
The red spectre spreads
They were so calm, so relaxed, so unhurried. They were at
last doing something for which their training had equipped them. They were
perfect examples of the adage that practice makes perfect. They were beating
the young men on the ground with their long sticks. They were drawing blood;
and if some unfortunate victim dared raised his head, he was rapidly disabled.
They were the illustrious Haryana police. The venue was Gurgaon, the date 28
July, the occasion was a public demonstration of the workers who were trying to
disrupt production in Honda Motors and Scooters India (HMSI).
The Haryana police were not the only ones who lived up to
their stereotype. HMSI was the first. There are many stories of the lack of
love between the Japanese and trade unionists. Many joint ventures that were
started with Japanese companies in the 1980s failed. Some were taken over by
their Japanese partners. Many had labour troubles. The Japanese became
notorious for mismanaging labour relations. Admittedly, workers become restless
when factories fail and when employers cannot meet their expectations. Failing
factories are not the easiest to manage. Whether for better or for worse,
however, the Japanese acquired a reputation for lack of flexibility and imagination.
But the strange thing is that HMSI is not a failing
factory. It is hugely successful, immensely profitable. Its scooters are
obscenely popular; HMSI cannot meet demand for them. And that is why it was
targeted by professional trade unionists. They saw a ripe fruit ready to be
plucked, a fat goat ready for sacrifice. So they registered a trade union last
December, and asked for recognition. HMSI refused to recognize them. That is
how trouble started.
This is just the beginning. Trade unionism is part of the
official religion further east. In Calcutta, trade unions claim not only the
right to stop production when they feel like; they claim the right to stop the
city. A Calcuttan never knows when his city will be brought to a halt by a
scream column of trade unionists. Companies have moved out of Calcutta in
hordes because their directors do not like riotous trade unionists shouting
just outside board rooms. There is a culture of noisy agitation that the rest
of India could do without.
Most of all Gurgaon. For it is the only place outside the
south that the new industries, information technology and business process
outsourcing, have taken root. They are best at home in Bangalore, Madras,
Bombay and Poona; somehow they find India north of the Vindhyas inhospitable.
The only exception was Gurgaon, whose new-industry exports are approaching Rs
200 billion. These are industries that work round the clock, industries which
cannot countenance a single day’s closure. The southern cities have adapted
themselves to their demand for reliability; Gurgaon is the only northern city
that could match them.
It could do so because, like the south, Gurgaon was free
of trade unionism – of bandhs, gheraos, demonstrations, shouting and
intimidation. If it is now infected, it will in the long run lose out to the
south – as Calcutta did for two decades despite offering the most attractive
blandishments to the IT industry. But before it does, it will do considerable
harm to the great IT-driven boom the country is witnessing. For the Japanese
ambassador was right – the Japanese will ask, is India safe from crippling
agitations, or will they be better off in China? And they will not be the only
ones to ask. All foreign investors will ask the same questions.
And they will not be pacified by the foreign ministry’s
boastful statement that India’s democratic institutions and legal system are second to none. They
will have seen these at work in the opposition walkout of Parliament and the
scuffle of Veer Mati, whose brother has disappeared, and the police. Great
theatre; but are these the signs of a country ready for a great leap forward, a
country welcoming foreign investment? Think again, Natwar!
The Left parties see a great opportunity in the central
government’s dependence on them – an opportunity to spread their wings across
the country. And the instrument of their aggression is precisely the externally
organized, externally financed, confrontative trade unionism that has been seen
in HMSI. Whether it is in their interest or not, it is not in the interest of
the country, which is in the middle of the first sustained boom since the one
that the reforms unleashed in the early 1990s. We have often wondered what
would stop this wonderful boom; now we know the answer. The Left could stop the
boom, helped by a pusillanimous government. Here is a problem that the Prime
Minister needs to tackle quickly with all the political skills at his command.
