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Bangalore -- from isolation<br>to globalisation

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15 March, 2001A new economic agenda in India has meant that the private sector has taken over a major share of the development of industry. Workers have paid the price for that. METAL WORLD has visited a small enterprise in Bangalore, India's fastest-growing city.

BY ROSE ZEIMER It is six thirty. The sun has just crawled up on the horizon in the South Indian city of Bangalore. In a humble, one-room apartment with an outdoor toilet in one of the city's more modest neighbourhoods, Vasu is performing his morning ritual. He uses the water hose in the bathroom to clean his body, before he lights the joss sticks, offers a prayer and sacrifices to the house god, whose flower-ornamented alter stands in a corner of the kitchen table.
Meanwhile his wife, Nagalakshmi, is preparing breakfast in the 8-square-meter room which serves as a bedroom, living and dining room for this small family, which in addition to mum and dad consists of son Dilip, who is 10. Breakfast is eaten while sitting on the floor in front of the single bed, after Dilip's mattress on the floor has been rolled up. At eight, Vasu is ready to leave his home to take the bus to his workplace, the Leotech factory in one of Bangalore's industrial precincts. Vasu is a machine operator at the factory, which is one of many factories in the city which manufacture components for the electronics industry.
With its four million people, Bangalore is India's fifth-largest city. Some 10,000 manufacturing companies reside in Bangalore, the fastest-growing city in Asia. Mainly the electronics industry has found a home in this city, which for that reason is also known as "The Silicon Valley of India".
A NEW ECONOMIC AGENDA
In many ways, the situation in India is like that in Eastern Europe. From independence, in 1947, until 1991, India had a socialist mixed economy. Manufacturing industry consisted mainly of state-owned enterprises, often with thousands of employees; unemployment was rather low. However, the result of this introvert economy was that India was economically isolated in a world of rapidly growing globalisation.
In 1991, under pressure from the International Monetary Fund, the Indian government introduced a new economic agenda which liberalised industry, trade and finance to allow access for external capital. The big, over-staffed, state-owned enterprises manufacturing poor-quality products for the home market have now, to a certain extent, been discontinued and given room for small, efficient, privately-owned companies which manufacture quality products, some of which are exported. Consequently, the private sector has partly taken over the development of industry.
SMALL, EFFICIENT, PRIVATELY-OWNED ENTERPRISES
T. Vasu's workplace, Leotech, is a good example of increasing privatisation and of an industry which will be a forerunner in economic development and in strengthening India's share of globalisation. The company is privately owned and has specialised in the manufacture of metal and plastic components for the telecommunications and electronics industries -- with an increasing share of production being exported to Southeast Asia, Portugal and Australia.
A number of multinational companies have also settled in India in recent years. Nevertheless, the state of the economy is far from encouraging. The latest economic forecasts show a decline in economic growth, from just under seven per cent in 1995 to five per cent in 1998. Wage-earners are paying the price for that. Wages increased by 2.3 per cent in the 1999-2000 period. During the same period, consumer prices for industrial workers have gone up seven to eight per cent; in some big cities, such as New Delhi, prices have gone up 15 per cent.
A SICK INDUSTRY
India has a very large metal industry, ranging from metal mines to heavy industry, such as shipyards, and to aerospace, manufacture of transport equipment, electronics, tools and machine tools, electricity and cars.
The heavy industry used to be dominant in the state-controlled or state-owned enterprises; even today, heavy industry is growing in the public as well as in the private and multinational sector.
Some 3.5 million Indians are estimated to be working in the metal industry. However, the Indian metal industry is facing huge challenges as a result of globalisation, because it is not prepared for it. Despite optimistic forecasts, rationalisation of production and privatisation, the metal industry has seen serious setbacks in many areas over the last three years. The sale of cars dropped by 40 per cent in 1998, to give but one example. The steel industry, too, is in dire straits. Millions of tons of finished and semi-finished steel products lie idle.
A GLIMMER OF HOPE
Workers are paying the price: mass dismissals, compulsory resignations and closures are the order of the day. An increasing number of companies are cutting down on their regular staff and outsource part or all of their production to smaller subcontractors.
If there is a growing number of news jobs, these are only created in the small metal enterprises. However, Indians do see a glimmer of hope. Since 1999, the metal industry has been slowly recovering and the forecasts are again optimistic. Given the growing economic openness, foreign direct investments are expected to increase further over the next few years and in some industries multinational companies will play an important role.
Over the last three years, 150,000 jobs have disappeared in India and if things continue as planned, an additional one-third of the total workforce may expect to get the sack in the coming years. At the same time, new entrants to the labour market amount to 2.5 per cent. This means that new entries are much more numerous than the labour market is able to absorb. Consequently, a situation arises in which a strong increase in unemployment can be expected.
WORK IS OUTSOURCED
With the purpose of ensuring a flexible, efficient and competitive labour market, the government has weakened a number of the statutory rights that wage-earners used to have. An increasing amount of work is outsourced to privately-owned companies. With the purpose of reducing costs, these companies take on employees on temporary employment contracts, so that they do not have to pay people if there is no work for them. For wage-earners, this type of employment not only leads to uncertainty about one's job situation. In addition, the pay is often very low, because the subcontractor they were hired by has an agreement on a specific sum of money the subcontractor will receive to get the job done. It is then up to the subcontractor to get the biggest possible share of that income. One way of doing this is by offering the employees rock-bottom wages. Or the subcontractor has been engaged by a company for carrying out a specific job for a main contractor. In this case, the subcontractor will receive payment for the work, and it is up to him to pay his employees. For the wage-earners, this leads to uncertainty as to whether they will receive any pay at all -- and, if they do, how much.
TWELVE PER CENT UNIONISED
For many years, India has had extensive legislation to protect wage-earners, but this legislation has only been applied to a limited extent. Only in the state-owned sector was the law complied with to a certain extent, but in the private sector not at all. Until now, the most important job for the unions has thus been to ensure that existing legislation is applied, rather than having to negotiate better wage conditions and terms of employment. However, with the new industrial structure, trade unions will also have to negotiate agreements, etc. in the formerly state-owned companies.
Only 28 million, or 8 per cent of India's 376 million wage-earners, are in a union. 70 per cent of union members are in the public sector. The great majority of the employees in the private sector are thus not unionised. This means that they are only protected to a limited degree or not at all by labour market legislation or unions, resulting in lousy pay and poor living conditions. In 1998, 35 per cent of India's population lived below the poverty line.
Among metalworkers, an average of twelve per cent are estimated to be members of a union. However, this figure covers a span from two to 30 per cent.
Unions have good representation in the large, state-owned enterprises, but poor representation in the growing private sector. Consequently, the Indian trade union movement is facing a huge challenge if Indians are to benefit from growing, international globalisation.
PROJECT TO STRENGTHEN THE UNION
The Indian trade union movement is not geared to solving the tremendous challenges which come in the wake of globalisation. Only a few are unionised, but there is a great number of unions because seven employees at one workplace is all it takes to form a union. Most of the 54,000 unions are politically infiltrated, and unions have been in a traditional situation of rivalry for members in the same area, even at the same workplace. That is why the Danish metalworkers' union (Dansk Metal), the Central Organisation of Industrial Employees in Denmark (CO-Industri) and the Danish Trade Union Council for International Development Cooperation (LO/FTF Council) have joined forces with the International Metalworkers' Federation to launch a project to strengthen the trade union movement -- for now in four of India's federal states -- thereby ensuring that Indian metalworkers are ready to meet the challenges of globalisation, rather that becoming victims of it.
The purpose of the project is to train 40 local union officials who will have the job of canvassing for new members. This will help to make a strong, representative, democratic union -- a union which the government needs to listen to and which is thus able to fight for social and economic justice for the country's metalworkers. If this effort succeeds, metalworkers will be able to maintain their dignity not only in India, but also elsewhere in the world, where better living conditions will develop -- in countries that we will be competing against in the future.
The first bit of earth has been turned for the project. Last November, the IMF held two intensive 3-day training seminars for the union officials selected. Their commitment was fantastic, even if the barriers to the proliferation of a politically independent trade union movement are massive. Unions are not only up against company owners who deny access to the factory and harass those who want to join the union. They are also up against illiteracy, as well as problems with caste, language and religion, plus -- not least -- the shortcomings of legislation, Mafia-type relations, political infiltration and the rivalry among existing unions at the workplace.
A JOB THAT CALLS FOR PRECISION
T. Vasu's workplace is a production hall with a high ceiling -- so high that there is room for the owner's, his brother's and the marketing manager's office up there, enabling them to keep track of the work at all times. However, it is not necessary to check on the employees, because Vasu and his colleagues work independently and with much concentration. Most of the 45 employees have worked here for years. They are all union members.
The production hall is part of the Leotech company, which is located in an industrial precinct. Next to it is the company's second production hall, where plastic components are manufactured.
In the hall where Vasu works, there are 18 machines of varying size for the manufacture of metal components for, inter alia, the telephone and computer industries. 15 per cent is exported. This work calls for precision and a high degree of skill. Leotech's owner, Mr. N. V. Ranga, is fully aware that the company's continued success in export markets depends on the high technological skills of his employees. That is why he only has skilled workers employed in the part of the company where Vasu works. He is very satisfied that they are all union members.
"The trade union ensures discipline. In the 12 years my employees have been union members, everything has been calm here at the factory. I make demands on my employees. They have their claims on me, too, and until now they have not made any claims that were so unreasonable we were not able to reach agreement following negotiation," says Mr. Ranga.
WORKING OVERTIME TO GIVE HIS SON A FUTURE
Having seven brothers and sisters -- two brothers are also metalworkers -- Vasu has never considered anything else than the metal industry. Being skilled AND unionised, he almost becomes middle class. Under the agreement, he is guaranteed a minimum 5,000 rupees (US$108) on the day shift, 18 days of annual vacation leave, 12 days off in connection with national holidays, plus overtime pay, termination notice which is very favourable seen from a Danish perspective, as well as a modest amount of pension each month from the time he is 58 or 60.
Even if Vasu, being a union member, is guaranteed a pay higher than the average pay for metalworkers of 3,000-5,000 rupees per month, his family cannot live on his pay for a normal 8-hour working day. That is why he works two hours overtime every day, all six working days of the week. His normal pay only barely covers the cost of rent at 1,200 rupees, electricity at 250 rupees, union subscription fee at 5 rupees and other necessities. However, Vasu and his wife want their son to do better. Dilip is a bright kid, who dreams of a future in the computer business. Consequently, in addition to normal schooling, he receives three hours of private tuition a day, for which the parents pay 100 rupees. Moreover, they save money each month to make sure that Dilip will be able to get additional education later on.
"I HAVE A SON. THAT'S ENOUGH"
To the question of why the family has not had more children, Vasu says with a knowing smile: "I have a son. That's enough." The couple was lucky the first time and has not dared to take the risk that child number two would be a daughter, since that would mean that Vasu would have to work even more hours every day to save up money for her dowry. That is the case for one of Vasu's colleagues, 37-year-old B. Muniraju, who has two daughters of five and two. He often has to work four hours extra to make ends meet, since he has to put money aside for his daughters' dowries. Munirajua has not had a holiday for years. He has opted for the money instead. Despite their modest circumstances, Vasu and his wife seem satisfied with their lives and with each other.
T. Vasu was born and bred in Bangalore, while Nagalakshmi, his wife, comes from a village where she went to school for eight years. The couple was introduced to each other eleven years ago through mutual acquaintances, and their arranged marriage was confirmed through a small ceremony, as is the tradition in families which are not wealthy.
When Vasu comes home from work at around 8 p.m., he relaxes on the bed, and while his wife prepares dinner, he talks with his family about their day. Vasu takes a keen interest in his son's life and school. Dilip goes to school from 8 a.m. to 2 p.m. every day. After school, he goes home to have lunch and his mother helps with his homework as best she can. Nagalakshimi is a housewife and will continue to be so -- also when their son is older and can fend for himself. She has to help him with his school and make sure their home is tidy. And she is good at that, says Vasu with pride in his voice.
At around 5 p.m., Dilip leaves home again. He has three hours of private tuition to become well-qualified, so that one day he can live up to his own and his family's ambition of becoming rich. There are no toys in the home. The games that there are room for in the boy's life are played outside, but Dilip, too, seems happy with his life.
THE DREAMS ARE ALIVE
Just like breakfast, dinner is had sitting cross-legged on the floor in the blue room, which in addition to the bed only contains a closet for the family's few possessions, plus a 14-inch TV. The TV is on whenever the family is awake, except when the power fails. The family goes to bed at around 10.30 p.m. to be well-rested for the next day. On Sundays and holidays, Vasu takes his family to one of the beautiful parks for which Bangalore is known. Sometimes they go to the cinema or visit one of his brothers and sisters, who are all married and live in Bangalore. They rarely have the money to visit his wife's family, and travel beyond that is not possible. The family has never been outside the federal state of Karnataka. Nevertheless, their dreams about the future are very much alive.
Rose Zeimer is working as a journalist at the Dansk Metal magazine, Fagbladet Metal.