Car Belt Politics - Economic Times

Haryana's industrial hinterland, a hub of car and component makers, is seething with unrest. The issue is easy to identify: most people here are employed as contract workers , who get none of the perks enjoyed by regular employees and are paid a fraction of what they would have earned as regulars. Maruti Suzuki , India's largest carmaker which is also reputed to be one of its better employers, denies the majority of its workers - mostly on contract - the right to form an independent union.

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Maruti should allow the union to be formed. The assumption that unions will inevitably disrupt work and create trouble is wrong: industrial powerhouses like Germany and South Korea have strong unions. These have created a working class that is prosperous and earns enough to drive the economy's consumption engine. Meanwhile, the average number of contract employees in the Haryana car belt is 85% of the workforce. Given this inequality, it's not surprising that the area has been gripped by industrial unrest. If India is to grow into a manufacturing powerhouse, this sort of things must stop.

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Companies, workers, unions and governments have to work together to find a solution. The distinction between contract and regular workers has to go: people can't be paid different rates for the same work. The obvious attraction of lower wages apart, many companies choose to hire contract labour because, on paper , India has strict rules that regulate the conditions of regular employees. Among other things, these rules make it near-impossible to lay off people in a downturn.

Car Belt Politics - Economic Times