how can we Analise the position of the indian trade unions in era of globalization. whether positive effects are more or not ?
From India, Hubli

How can we analyze the position of the Indian Trade Unions in the era of globalization, whether positive effects are more or not?

Dear Giridhar,

The answer to the subject-matter of your question is worthy of a thesis, I think. Anyway, let me try to present the maiden answer to your thread based on my observations as a common man of the economic events unfolding ever since 1991 which laid the foundation for the New Economic Policy of the Govt. of India and opened the flood-gates of globalization. Apart from that my work-experience as a conciliation officer in an industrially concentrated area for some time when the effects started to appear gave me, inter alia, a good interaction with both Trade Unions and Managements involved in the struggle for adjustments.

Basically, globalization is the expansion of trade and commerce across the world transcending the international borders. Essentially, therefore, it is market-driven. Existence of global trade can be traced back to the civilizations of Egypt, Mesopotamia, Indus Valley, Phoenicia and china in 4000 B.C to 1000 B.C. The Formation of nation states in Western Europe in the 15th and 16th Centuries and the successful efforts of colonization by Spain, Portugal, Great Britain and France in the succeeding periods marked by rapid expansion of global trade by means of reciprocal import and export of raw materials and finished goods between the Conquerors and the colonies necessitated the expansion of capital in hitherto unknown scale and the conferment of charted rights for exclusive trade in exchange for certain obligations to the State. All These culminated in the advent of joint-stock system of ownership of business enterprises and emergence of modern corporations. The following Industrial Revolution in the 18th Century which gave rise to mass production also necessitated aggressive and innovative world-wide marketing techniques. The notable early multi-national companies are the Unilever of Holland and England, Anglo Swiss Condensed Milk Company of Switzerland, Philips Lamps of the Netherlands and Standard Oil of the USA. In the aftermath of the new industrial policy of the Govt of India, the scale of preference gradually tilted towards privatization, foreign direct investment, deregulation of exports and imports in tune with the terms of international trade agreements etc., resulting in private-public joint ventures, foreign-domestic collaborative ventures, big Indian business houses like the Tatas, Birlas, TVS becoming transnational, multi-national corporations like Ford, Hyundai, GM, Nokia, Suzuki, Volvo etc., establishing their production hubs in India and competing substantially in the domestic market in addition to sizeable exports, large scale employment opportunities abroad, creation of a level-playing field for the private sector in the nationalized fields of banking, insurance, telecommunications etc., increased flow of revenue to the State through direct and indirect taxes and so on. Of course, the dismal side is also there. Slow and Steady phasing out of small and medium scale industries catering to the local and domestic markets, replacement of large scale manual labour in production and construction activities with increased use of mammoth machines, machanisation, automation etc., migration of manual labour force from rural areas to urban centers of production leaving agriculture in the lurch, increasing unplanned urbanization, power and water scarcity, painful adjustment of domestic consumption needs and unpredictable inflationary trends according to global market supply and demand, unabated out-sourcing resulting in sporadic indirect engagement of labour and so on. In short, globalization is a mixed-blessing to India. The plus points are: ample employment opportunities became available to the relatively younger population with good professional and technical skills, there by raising the standard of living of the middle-classes, the rich became richer there by branching out their business ventures abroad, availability of the best products of consumer-durables in the markets at competitive prices, flexible and easy credit facilities by banks and other financial institutions, easy transfer of technical know-how from abroad and development of transport and communication facilities. The minus points are : The gradual decimation of the conventional manufacturing and rural industries, deprivation of regular employment to semi-skilled and unskilled labour force, perceptible increase in tendency of conspicuous consumption and adoption of faulty export policy in respect of certain commodities there by keeping the inflationary trend unabated, drastic cut in budgetary allocations to education, public health etc. leaving out to private sector there by making them highly expensive and beyond the reach of the poor and down-trodden and many more like these.

Trade union movement in India dates back to 1890 with the formation of Bombay Millhands Association which in fact was more a welfare association than a trade union. Therefore, the first unions formed were viz., the Madras Labour Union (1918) and the Textile Labour Association, Ahmedabad (1920). The All India Trade Union Congress (AITUC), the first trade union federation was formed in 1920. The political difference cropped up ever since its inception among the three groups viz., the nationalists led by Gandhiji and Jawaharlal Nehru, communists led by Dange and M.N. Roy and the moderate socialists led by V.V Giri and N.M. Joshi paved way for the formation of rival unions based on political ideologies and the first grand split saw the formation of Indian National Trade Union Congress (INTUC) from AITUC in 1947 followed by further splits with the formation of Hind Mazdoor Sabha (HMS), United Trade Union Congress (UTUC) and finally the formation of the Center of Indian Trade Unions (CITU) in 1970. The political difference played a vital role in the formation of further federations such as Bharathiya Mazdoor Sabha (BMS) and other regional level federations by the regional parties. As of now, almost every political party has its labour wing in the form of its own federation. Still there are some other federations without any political link. Very well one can understand the importance of a trade union from the inalienable right to association in Art. 19(1)(g) of the Constitution of India. Trade union stands as a parallel institution to management in matters of industrial relations such as collective bargaining, participative management, conflict resolution etc.

Before analyzing the positivity or negativity of the position of Indian Trade unions in the wake of globalization in particular, we shall see the state of trade unions across the globe in general. Since 1980, serious decline in union membership has been noticed world wide in industrialized countries like ours except Sweden, Denmark, Norway and Germany where the trade union density being at the top at 91% in Sweden and the least at 40% in Germany but steadily at the same least rate over the long past. Density is the percentage of union members in relation to total employment. Unfortunately I don’t have the recent statistics of our country at hand. But, presumably it will be far less with the decline in the number of conventional manufacturing like textile, foundry, mines and quarrying etc. and the growth of service sector where unionization is not possible because of scattered labour force. Even in manufacturing, perceptible change is noticed from mass-production centers to small, small satellite units of production based on the speciality of the components to be made. It is a well-known fact that unionization in small units is very difficult. Thus the decline in membership has rendered the Indian trade unions vulnerable and ineffective other than in public sector undertakings where though unionization stands presently at 90%, the role of unions are restricted to that of bargaining agents in wage negotiations only.

Next comes the changing character of the work force. What Peter F. Drucker thought to be a new work force and styled as “Knowledge workers” anticipating in his book “Managing in Turbulent times” in the mid-80s have come to stay in every employment replacing the unskilled and semi-skilled white-collar workers. This well-educated knowledge workers are highly ‘individualistic’ and do not care for anything other than fat pay-pockets and therefore it is very difficult to bring them within the fold and hold of trade unions. I have not heard of trade unions in any I.T and ITES company. Even occasional mass retrenchment at times in such an undertaking due to declining business prospects do not deter them as their employability is very high.

Constant technological advancements affect everyone is borne out in the following quote :

“Robots in the factory, word processors in the office, scanners at the checkout counter, push-button banking, computers in the home and satellites in the sky remind the nation of the pervasive impact of advancing technology”.

Thus, technology renders people redundant and effects replacement wherever possible.

The Human Resource Management, distinct from old management styles lay stress on the importance of team work, flat structures of hierarchy, continuous improvement, decentralized decision-making, novel methods of reward structures, human capital formation etc. and ensures a ‘one-to-one contact’ and a ‘face-to-face approach’ between the management and the people thus eliminating the third party viz. the trade union.

If one analyzes the industrial relations scenario obtaining in India for the last 50/60 years, one can easily notice that earlier the trade unions have been militant and arm-twisting the employers by resorting to sudden strikes for even petty causes based on the mere strength of numbers. Now, there is a topsy-turvy change that the employers have become militant and the unions have to fight for minimum statutory rights of workmen.

The political environment is also not supportive to the growth of trade unions for what is considered appropriate in an industrially developing pace is ‘High employment’ instead of ‘Full employment’ because a certain level of unemployment is always unavoidable in any country.

Therefore, I would personally conclude that the position of the Indian Trade Unions in the era of globalization is on the whole not so positive and to remedy this they should understand not only the implications of change, but also, non-change and non-adaptation. The role played by the Indian Trade Unions during the pre and post independence periods cannot be undermined. Their constant efforts made the Govt. of India ratify a number of conventions of International Labour Organization and instrumental in the passing of many post independence labour laws. Their indomitable spirit of litigation brought about many landmark judgments by the Apex Court of the nation. To address the human problems associated with globalization, they have to revamp their armory with new weapons. They should not refuse to understand that the commitments of an industry are not only limited to that of security of employment and fair wages to workmen and fat dividends to share-holders. Another stakeholder viz. society is still at large. It needs better quality of goods and services at cheaper prices keeping the ecological balance intact and the uninterrupted transfer of social wealth and technological know-how to posterity. Therefore, Indian Trade Unions, along with other social partners, should recognize the need for the transition and transformation of our economy to be fully integrated into the global economy as a major and competitive player where its citizens including the labour force can enjoy an enhanced quality of life.

With Regards,

M. Umakanthan

Additional Commissioner of Labour (Rtd.)

Salem - 636008.


From India, Salem

Respected Sir/Member,
As you have rightly found that, my query is a topic of the Theses. Presently I am working on the same matter. Further your have given an excellent idea about the query. thanking you Sir.
Sir i am very glad to receive massage from you on my actual Theses Topic. "Position of Indian Trade Unions in the Era of the Globalization". thanking you Sir.
Awaiting for your valuable knowledge. Thanking you.

From India, Hubli
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