August 31, 1998

Positive attitudes of political parties and trade unions work towards reviving the 'sick man of the south'.

By M G Radhakrishnan

The task was quite simple: all that they had to do was to cover each tyre with a polythene sheet to keep the dust out while the tread was being fixed. But the workers at the Apollo Tyres unit in Kerala's Thrissur district refused to do it saying it was not part of the work agreement. Later they showed signs of relenting, but on one condition: the management should give an allowance or gift a scooter each to its about 1,800 workers. The stunned management refused. What followed was violence culminating in a lockout in April that continued till July. The issue was finally resolved late last month, but by then, everybody was a loser: each worker lost about Rs 15,000 as wages, the company suffered Rs 125 crore loss of production and the state Government about Rs 75 crore as duties and taxes.

Even two years ago, trade union militancy would have merited no more than brief mentions in local newspapers. But the Apollo Tyres issue created ripples in the government, the state legislature, industrial circles and the media. The reason: lockouts, once a part of everyday life in the state, are now a rarity.

According to the latest annual report of the Union Ministry of Labour, the fall in the number of strikes in Kerala has been dramatic from 37 in 1992 to 25 in 1997 and lockouts from 20 to six. The state planning board reports that mandays lost due to strikes and lockouts came down from 26.23 lakh in 1993-94 to 4.75 lakh in 1996-97. "This shows that people have come to understand that low industrialisation would permanently keep the state underdeveloped and them jobless," says P.V. Gangadharan, president, Malabar Chamber of Commerce.

Much of the change is attributed to awareness among the political and trade union leadership. "Parties like the CPI(M) are now telling its cadres about the need for industrial peace," says N. Sreekumar, vice-president, Apollo Tyres. True, industrial investment has grown from Rs 1,192 crore in 1983 to Rs 5,900 crore this year but it still lags behind other states. "Elsewhere the investment growth has been far bigger during the past five years. But Kerala appears to have missed the post-1991 economic reforms-induced wave of high investment growth. Not a single multinational has made the state as a destination," says T. Ravindran, regional chairman of the Confederation of Indian Industry (CII).

However, the reason for the fall in the number of strikes and lockouts has been the institutionalisation of conciliation and collective bargaining mechanisms. "Governments, especially of the Left, have seen to it that industrial disputes are settled amicably before they lead to flash points," says E. Balanandan, president, CITU. Thomas Issac, a member of the CPI(M) thinktank and an economist with the Centre for Development Studies (CDS), says, "The trade union movement has come to acquire a maturity now. Even the Left has realised that you need more industries."

For decades, despite the state's highly skilled workforce, industrialists shunned Kerala. Militancy in trade unions was rampant. Former chief minister and CPI State Secretary P.K. Vasudevan Nair admits, "In the past, we had organised a number of unnecessary strikes forcing many industries to migrate." Significantly, the CPI's annual state conference last week noted in its political resolution, among other things, the need to curb strikes and lockouts. Says former chief minister A.K. Antony: "Too frequent strikes have blunted the weapon. Today we can't agitate even for just causes because we know it will not yield results."

Issac feels much has to be done to improve work culture and productivity. Industry leaders agree this issue calls for immediate attention. "We tried to improve productivity at our unit because the tyres here had a higher rejection rate compared to those produced at our units outside Kerala," says Sreekumar. "But the workers were adamant, which led to the lockout." The state Labour Minister V.P. Ramakrishna Pillai says the setting up of industrial relations committees, which solve disputes before they get out of hand, has helped in reducing the number of strikes.

The Onam festival in September always used to be preceded by a spate of strikes and lockouts over bonus all over the state. But for the past few years, the festival period has not seen these problems. What is unquestionable is the attitudinal changes among political parties. For instance, the state Government has agreed to the CII's demand to withdraw a 20 per cent entry tax for computer peripherals brought to the state. A suggestion by the Planters' Association of Kerala to scale down agriculture income tax rates too has been approved by the Government. More illustrative of the change is the state Government's recently-announced power policy which, for the first time, says the State Electricity Board (SEB) would be divided into many units (opposed by unions for long as it would weaken them) in order to make it profitable. "It's not too dramatic. But coming from a Left government, the policy is unbelievably progressive as it stops just short of privatising the SEB," says Ravindran.

While the changes are welcome, politicians and businessmen hope the new industrial climate will attract investment in the state which is desperately trying to live down its image of the "sick man of the south". There are encouraging signs already. Last month, the Federation of Industries of Italy decided to set up a Rs 200-crore Indo-Italian Business Centre in Thiruvananthapuram. If the tempo is maintained, the peace will not be that of an industrial graveyard.

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