Geography Reference
In-Depth Information
These views are supported by an extensive theoretical and empirical literature
concerning the greater economic efficiency of the market relative to the state.
The state, it is argued, should extricate itself from all business and confine itself
to the provision of a handful of public goods.
The market-oriented policies begun in 1991 were sold politically on the
promise that neither workers and farmers nor small business people would be
hurt.
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To the extent that the reforms of the early years did negatively impact
these groups, the situation was tolerated because the economic crises of 1991
created a coalition in support of reform. Many of the so-called second-generation
reforms that are next on the government's agenda, in contrast, are perceived to
threaten the immediate welfare of core political constituencies. Meanwhile, the
unifying impact of the crisis has long since dissipated.
Opposition to privatization and labor reforms in particular, and growing
dissatisfaction with neoliberal reforms in general, has been exacerbated and
strengthened by several other characteristics of the reform decade: economic
growth has been perceived to be uneven by region and by sector, causing those
who lost out in the process to resist further changes.
On 29 November 1991, workers in India's sprawling public sector staged a
one-day strike in response to government announcements that loss-making
public sector units would be shut down.
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In sectors of the economy that are
primarily filled by public sector enterprises, like banking, air transport, insurance,
and energy, the strike successfully brought operations to a halt, although it had a
less dramatic effect on sectors that are also populated by private firms. The strike
was the first response by Indian labor to the economic reform plans of the Rao
government. Not surprisingly, the cause of the protest was the government's
announcements to begin privatization and public sector closures, rather than any
of the other stabilization and liberalization elements of the new economic
policies of 1991.
Once the call for a strike was made in early November, the Rao government
responded by announcing, during a meeting of the World Economic Forum in
New Delhi, that India would not begin privatization, and that even discussing
privatization was premature at the current time. A measured pace of action in
these issue areas, Rao contended, was required to maintain political and social
stability within the country.
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In 1998, on 10 and 11 December, workers in all of the central public sector
units again went on strike to protest a reinstated commitment to privatization and
the imminent closure of eight sick public units. Spearheading the strike was the
Centre of India Trade Unions, which is allied to the Communist Party of India
(Marxist). The federation of trade unions allied to the Bharatiya Janata Party
(BJP), the Bharatiya Mazdoor Sangh (BMS), did not participate in the strike,
accusing the organizers of having political rather than union motivations.
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On
16 December, a week after the first wave of strikes, 200,000 workers in India's
