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Struck down by strikes

Labour unrest in Gurgaon has long-term implications for investment in India.

india Updated: Oct 20, 2009 21:17 IST

Strikes, sometimes violent ones, are visiting the girdle of industries surrounding Delhi with sickening regularity. At an average Rs 28,000 per month, the capital’s automobile cluster — which produces nearly 60 per cent of India’s cars and bikes — is among the best paymasters for blue-collar workers anywhere in the country. Yet the simmering discontent here is as much about wages as it is about working conditions. This is not helped by the fact that the political parties of predominantly agrarian Haryana and western Uttar Pradesh have felt little need to nurture industrial workers as a constituency. Nor by the fact that the nascent administrative apparatus in Gurgaon and Noida are ill-equipped to handle labour unrest.

The lack of trade union activity was a major attraction for investment in this belt, pitchforking the region into the country’s largest auto hub in less than a generation. But it would be a pipedream to expect political awareness of a quarter of a century ago on Gurgaon’s shop floor today. The proximity to New Delhi gives militant unionism extra traction in its fight against foreign capital, and the central government gets roped into situations that ought to be dealt with at the municipal level. New Delhi needs to work with the states in question to help them develop institutional capabilities to preserve industrial harmony. The region’s prosperity depends on all stakeholders playing by the rules, with the government, if called in, acting as an honest broker.

The Gurgaon-Noida industrial complex was spawned when India started opening itself to the world. The Japanese, famous for hunting in packs, are big players here. Roughly three in four Japanese companies operating in India are located in this cluster, with ambitious plans of developing a Mumbai-Delhi industrial corridor. Spook them and a lot more than Gurgaon’s future is at stake. Yet the foreign investor must be made aware that Indian workers enjoy rights unavailable in many parts of emerging Asia. These have to be respected. No country has developed without going through an industrial revolution and India’s unlikely to be an exception. The scramble for investment can’t be at the cost of a brutalised workforce. The central government needs to look more closely at what’s happening in Gurgaon if it intends to pitch India as an investor-friendly destination without diluting labour rights.