ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Evidence from Transnational Automobile Companies in India

Deregulation and the Fading Labour Agenda

The report of the International Commission for Labor Rights on the precarious workers in the automobile companies in Chennai reminds us of the inferior state of labour in Indian industry. While India is already in for a second round of labour law reforms, it is important to discuss the nature of the employment that the citizens are offered, often at the cost of their fundamental rights.

The initial phase of labour market deregulation in India subsequent to the trade policy reform project made labour laws considerably flexible to facilitate trade and investments (Nath 1994; Despande and Despande 1998). Among others, it enabled the widespread use of contract employment in organised sectors and registered enterprises, including public sector, and dismantled provisions of retrenchment under the Industrial Disputes Act. It also provided exemptions in the Special Economic Zone Act, 2005 by overpowering the provisions of the Trade Unions Act, Industrial Disputes Act, Minimum Wages Act, etc, to facilitate special economic zones.1 As Prime Minister, Narendra Modi vehemently reiterates in his speeches inside and outside India, the country is now prepared to make its labour laws more flexible to advance the agenda of deregulation to ensure a “better investment climate”.

However, the question is what should be the nature of employment that the state is asking its citizens to take up? The report Shiny Cars: Shattered Dreams by the International Commission for Labor Rights (ICLR) on the precarious workers in the automobile companies in Chennai (Gopalakrishnan and Mirer 2014) documents the nature of the employment that is available. As the report details, these jobs are highly precarious and contractual, involve long hours with compulsory overtime and are absent of fundamental rights and other rights of workers such as minimum wages and freedom of association. Such accounts of labour rights violations are not surprising from those parts of the world that have embarked on the neo-liberal path. The purpose of this discussion here, therefore, is not to highlight the pervasive subjugation of labour in a market-oriented regime, but to spell out the internal contradictions of a state, which sets the ground for discounting labour in the name of investment and growth by dismantling labour laws that protect the minimum rights of workers and yet claims to combine market reforms and inclusiveness as a project of development.

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