Center For Workers Education

for building a democratic labour movement in India

Why integrated labour law reforms is necessary to upgrade labour standards-10

How Sustainable is this so called development?

  • In the new international division of labour shaped in the global value chains our major section of industries are locked in lower levels of value chains, and they are ruthlessly exploiting the labour to ensure super-profits to transnational corporations along with capturing an attractive profit for themselves
  • A very small amount of profits generated remains in the nation and rest is transferred to developed countries; for example in electronics industry total value added in the country is only 10%. Huge share of profits generated is captured by the TNCs by virtue of their control and monopoly on crucial technologies and crucial components. This situation may not change without a great focus on basic research in all fields of science, and in crucial fields like metallurgy. In India there is no focus in this direction, budget for research and higher education is dismal and the conditions are becoming worse with privatization of education and contractualization of academicians engaged in research and teaching.
  • Moreover, in WTO regime the capital is freely mobile, i.e, there is no surety that the FDI coming in country will remain for long time. If the multinational corporations see opportunity for better profits in some other country, they may shift their investments from one country to other in no time, creating mass closure of factories and mass unemployment.
  • Phenomenal rise of China, i.e., the flooding of investments in China was accompanied by the flight of capital from many countries leading to mass unemployment, for example, hundreds of factories were closed down in Mexico and their orders went to China and similar impacts were felt in Philippines and some other countries as well.
  • Moreover, the recurrent crisis is inbuilt in this growth model. During the recent international financial crisis, according to government data, more than 500,000 jobs were lost in India in export-oriented sectors alone during the last three months of 2008. Many scholars believed that these figures were highly underestimated. The Financial express reported that unemployment estimates for the first quarter of the financial year in 2009 show a total of 1.71 lakh job losses. The data shows withdrawal requests from the Employees’ Provident Fund Organization (EPFO) between April and June touched a record 31.51 lakh, indicating large-scale layoffs as well as a severe cash crunch among workers.
  • And after the crisis public money in the name of bailout packages are used to save the industries and banks from crisis, further relaxation in labour laws and taxation is extended to them and again the load of whole crisis is thrown on the head of workers and the people at large

(For details see SEZs-The New War Zones of Working Class in India; and other reports at CWE)


What we are getting from this development?

  • A Shining India for the elite, a very high economic growth, soaring profits of corporate, shopping malls and retail chains, booming media and entertainment business
  • All the public space and resources monopolized by the corporate
  • Erosion of democratic space or in some aspects loss of democratic space; WTO emerging as the real government and all national governments following the dictates of WTO; so you can elect the government but it has no meaning if the government do not dare to come out of WTO. The new agenda of WTO on Trade in services agreement goes to the extent that if it is signed, all the services will be privatized and liberalized on permanent basis and the coming governments may also not be able to reverse it
  • A hopeless India with hell of poverty and unemployment, and workers compelled to work in slave labour like conditions
  • Food crisis and skyrocketing inflation
  • A multidimensional environmental crisis heading towards creating a crisis of survival of society
  • A modern kind of barbarism promoted by market forces in all spheres of like and loss of all common sense

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