US investment bank Goldman Sachs likes Gujarat's anti-labour policies

By Dilip -
NB: American investment bank Goldman Sachs has focused on India's elections to advocate 'reforms' in Indian labour laws.. Their main objective seems to be an even further roll-back of basic trade-union rights, which are the crux of democracy. It cited the example of Gujarat which had taken a series of steps to make its labour laws 'flexible' and West Bengal which made pro worker changes to drive home its point.

 The situation in SEZ's is far worse than noticed by these bankers; and is generally ignored by the 'mainstream' media, which (by and large) seems to assume that workers rights are a nuisance. Labour laws that are meant to be in force in SEZ's are in fact negated by the provision that all economic activity is dubbed 'public utility', & strikes therefore rendered  illegal. Minimum wages are not paid, long hours imposed, hirings & firings take place at whim & due benefits not implemented. I will add more on this shortly, but would like to remind readers that this contempt for working people & their rightful place in Indian democracy is an essential feature of the ideology of the so-called 'Gujarat model of development' so acclaimed by corporates in & out of India. Perhaps that is why they and the media owned by them are so shamelessly partisan in this election

... The report comes at a time when there is an intense debate over the Gujarat development model which is being showcased by BJP's prime ministerial nominee Narendra Modi while his critics have slammed his claims. "As a new government takes charge from mid-2014, we see labour market reforms as a critical ingredient to accelerate India's growth rate," Goldman Sachs said in its report. The report said the Gujarat government amended the Industrial Disputes Act in 2004 to allow for greater flexibility in the labour market for Special Economic Zones. It allowed for firms within the SEZ to lay off workers, without seeking the permission of the government by simply giving a 1 month notice to the worker.

To allow for firm exit, the law was amended such that the employer can close an undertaking by giving 2 months notice to the worker. In contrast the West Bengal made several pro-worker changes. The IDA was amended to be applicable to more firms - those employing above 50 workers. "Gujarat experienced a 60% growth in manufacturing employment between 2000-12, while West Bengal has seen only a 22% increase," the report said. 

"...states which are classified as having more liberal labour laws have generated more manufacturing sector employment. We estimate that if states were to increase their share of labour in manufacturing to the level of Gujarat currently, some 40 million jobs could be added in manufacturing over the next decade. It said India's stringent labour laws are a key factor constraining employment growth, "The stakes for reforms could not be higher and a new government provides an excellent opportunity. We believe a new government could focus on labour market reforms and boosting urbanization through policies..."
http://timesofindia.indiatimes.com/business/india-business/Goldman-thumbs-up-for-Gujarat-model/articleshow/32878950.cms

 NB: The all-attack on trade-union rights & the 'experiments' in rolling back rights of combination in SEZs is a prominent feature of what these bankers think is good for India. TU rights are the basis of democracy & the assumption that they are a nuisance is an ideological victory for the corporates. They must be defended, and along with the rights of casual labourers. Union activists may note that international corporate interests are openly intervening in Indian politics to work for a dilution of Indian worker's hard-won rights. Here is some more information on the impact upon workers of the SEZ 'experiment'


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