abhishreshthaa
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Developing economies, like India, have long debated the privatization of public sector enterprises. Historically, the Indian State took upon herself the responsibility to undertake investments in basic and strategic economic activities and to control and direct the private sector through a network of regulatory institutions.
The state virtually had monopoly almost over all sectors of the economy. Also, the trade union movement emerged in India, basically as a reaction to the state interventionist or state pluralism model.
First phase
During the period from 1950 to mid-1960s, the state had formulated a strategy based on planning and import substitution. During this era, public-sector employment and public-sector unionism rose phenomenally. Trade unions and bargaining structures were highly centralized.
The two main trade union federations during this period were
The nationalist: Indian National Trade Union Congress and the communist: All India Trade Union Congress.
During this first phase, the labor regime was based on “state-dominated pluralism”.
Second phase:
The second phase (mid-1960s to 1979) was a period of economic stagnation and political turmoil. The rate of employment was slowing down and there were massive inter-union rivalries as a result of increase in industrial conflict. There was a proliferation of unions that developed affiliations with more radical political organizations. There was a dramatic increase in the number of disputes (strikes and lockouts. An “involuted” pluralism dominated Indian labor relations during this phase
Third phase:
During the third phase (1980-1991), decentralized bargaining and independent trade unionism emerged as a response to the segmented and uneven economic development.
Fourth phase:
During this phase (1991-2000) the Indian government introduced economic reforms which included privatization and liberalization measures and these came as a preparation for an initial IMF loan of $1.75 billion to $2 billion to bail India out of a serious debt crunch.
Privatization, in its broader sense, stands for policies that reduce the role of the state and assign a larger role for the private sector that pursues the logic of the market in all economic decisions.
Trade unions have been protesting against the privatization program because the public sector has been an important employer, especially in the organized labor market. The sector accounted for 56.84 percent of the total number of 14.3 million employees in the organized sector in 1980-81.
From about 8.1 million in 1980-81, those employed in the public sector manufacturing increased to 9.8 million by 1990-91. In spite of efforts at downsizing the workforce by public sector during the nineties, the number of employees remained at 9.8 million at the end of 1996-97.
During the nineties, its share in total hovered around sixty percent. Trade unionism during this phase had resulted in the decentralization and of union structures and there was the emergence of independent unions; important among them was the emergence of the Bharatiya Mazdoor Sangh affiliated to the Bharatiya Janata Party (right-wing).
During this phase the second National Labor Commission was set up but the workers were against the proposed changes because it diluted the need for employers to have government approval for a lockout and made it difficult for trade unions to call wildcat strikes.