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Labour pains: Can Verma make a difference?

Sahib Singh Verma is a self-made man. From librarian of Dayal Singh College to Chief Minister of Delhi, he has risen slowly but surely up the political ladder.

A grassroots activist of the Rashtriya Swayamsevak Sangh, he is also believes in the virtues of patience. After he was ignominiously removed from the Chief Minister's position to make way for Sushma Swaraj on the eve of the assembly elections in December 1998, Verma was promised a berth in the Union Cabinet. By none other than Prime Minister Atal Bihari Vajpayee.

He had to wait for the more than three and a half years till the first day of July this year before the promise made to him was fulfilled.

Sahib Singh Verma has always had a soft spot for scribes. No journalist who has sought an appointment with him has been refused. But whether the self-effacing, media-friendly Union Minister for Labour - who was elected to the 13th Lok Sabha from one of the most populous constituencies in the country, namely, Outer Delhi that has an electorate of 3.1 million - would be able to make a difference to the government's relations with workers remains to be seen.

Verma's predecessor in the Labour Ministry, Sharad Yadav of the Janata Dal (United), who is now Minister for Food and Civil Supplies, has been telling all and sundry - some statements published in newspapers have been attributed to sources close to Yadav, presumably a euphemism for the man himself - that he was removed from his post because he had opposed tooth and nail a number of proposals mooted by former Finance Minister Yashwant Sinha.

These were proposals to amend the Industrial Disputes Act and the Contract Labour Act and a move to cut the interest rate on provident fund deposits to nine per cent from 9.5 per cent at present.

There have been conflicting views in the Vajpayee government on the issue of amending labour laws. The Bharatiya Mazdoor Sangh is a leading trade union organisation and its representatives contend that the BMS is "independent" of the BJP. At the same time, BMS leaders concede that they have close ideological affinity with the RSS.

In February 1999, less than a year after Vajpayee had been sworn in as Prime Minister for the second time, speaking at a national convention of the trade union, BMS founder and veteran RSS leader Dattopant Thengadi had used unusually harsh language when he described former Finance Minister Sinha as an "anarth mantri" (literally, useless minister) instead of "arth mantri" (or Finance Minister).

The octogenarian Thengadi did not stop there. In April 2001, the BMS founder again attacked Sinha in public, this time during a rally held at New Delhi's Ram Lila maidan.

On this occasion, the Finance Minister was accused of being a "criminal" for encroaching on the territorial preserve of the then Labour Minister, Satyanarain Jatiya who also happens to be a BMS leader. The provocation for the uncharitable remark was a reference in Sinha's speech on the last day of February 2001 announcing the proposals for the Union budget for 2001-02.

The then Finance Minister had stated that the government wanted to remove certain "rigidities" in the country's labour laws by amending the Industrial Disputes Act to enable industrial establishments employing up to 1,000 employees to retrench workers without obtaining the prior permission of the appropriate government authority.

The law as it stands grants such a facility only to industrial organisations employing up to 100 workers. Sinha also mentioned the need to change the laws pertaining to contract labourers.

Thengadi's outburst reportedly upset Sinha such a lot that he threatened he would resign his post. The Finance Minister was, however, persuaded not to put in his papers after various leaders of the RSS and the BJP (including former party president K Jana Krishnamurthy) distanced themselves from Thengadi's views and told him not to take the BMS leader's remarks seriously.

Though the BMS leader's views were described as 'his own,' the trade union body never formally disowned Thengadi's remarks.

What happened instead was that Labour Minister Jatiya was removed from his post. This decision was widely interpreted by the media as having been taken because Jatiya was perceived to be opposing the "reform" of the country's labour laws.

In mid-February this year, the Cabinet sought to approve a bill to amend the Industrial Disputes Act on the eve of the presentation of the Union budget for 2002-03 to enable the finance minister to state that he had been able to fulfil the promise contained in his budget speech made a year earlier.

This did not, however, take place. There was strong opposition to the move from a number of Sinha's colleagues in the Cabinet led by the then labour minister Sharad Yadav that ensured that the Industrial Disputes Act is yet to be amended. The former Labour Minister also opposed amendments to the Contract Labour Act without first arriving at a "political consensus" on the issue.

Yadav also opposed Sinha's proposal made in June to cut the interest rate on provident fund deposits from 9.5 per cent to nine per cent to bring the rate in line with the lower rates of interest on small savings schemes.

Yadav disputed the contention of the finance ministry that an interest outgo of 9.5 per cent would deplete the surplus in the corpus of the employees' provident fund.

It now seems the new Labour Minister Verma would be in a mood to depart from the stand adopted by his predecessor and go along with the position taken by former finance minister Yashwant Sinha.

Verma told journalists on Friday (July 5) that the Central Board of Trustees of the Employees' Provident Fund would be discussing the topic on Tuesday (July 9) and that he was favourably inclined to consider a reduction in interest rates.

The Union labour minister is the ex-officio chairman of the Central Board of Trustees of the EPF. Yadav was reluctant to allow private companies to manage the PF trusts, but Verma's views on this topic are not known as yet.

Verma also told journalists that while he does not like the term 'hire and fire,' he would look into the issue of amending the Industrial Disputes Act to allow companies employing up to 1,000 workers to retrench employees without obtaining prior government permission.

The Second National Labour Commission had suggested that this limit be pegged at 300 workers not 1,000 workers (proposed by Sinha) or 100 workers, which is the law as it currently stands.

The new labour minister has observed that before a decision is taken in this regard, he would try and find out how many industrial units would come under the purview of the amended Act should the limit be raised from 100 workers to 300 workers.

Whereas the labour force in the organised industrial sector accounts for roughly ten per cent of the total number of workers in the country, the trade unions representing them carry considerable political clout.

Whether Verma would be able to confront the unions headlong on the issue of amending the Industrial Disputes Act and reducing the interest rate on EPF deposits is not certain, what cannot be denied is the fact that employment opportunities have not been growing fast enough in the Indian economy and many young people currently face the prospects of a jobless future.

The decade between 1991 and 2001 saw an average rate of growth of population 2.134 per cent per year - this represents the sharpest decline in India's population growth rate since independence.

On the other hand, the Planning Commission has estimated that while overall employment grew by 2.43 per cent per annum between 1987-88 and 1993-94, in the next seven years, that is, between 1993-94 and 1999-2000, the rate of growth of employment slumped to around one per cent.

What is worse, the number of the educated unemployed (that is, skilled and literate individuals) registered with employment exchanges rose from 36.8 million in 1994-95 to 41.2 million five years later. Some of these statistics were highlighted by 'socialist' Defence Minister George Fernandes while speaking at a seminar at the capital's Constitution Club on Thursday (July 4).

He lamented that the number of employment-generating small-scale industrial units in the country had come down from 340,000 to nearly 250,000 in the recent past.

He further pointed out that large (and not small) industrial enterprises were primarily responsible for non-payment of loans taken from banks and financial institutions.

Given such a grim employment scenario in India at present, the new labour minister will find it difficult to fashion employer-friendly policies that would elicit applause from chambers of commerce and industry associations, leave alone people like Yashwant Sinha who is now the country's Minister for External Affairs.

Incidentally, it may be recalled that Sahib Singh Verma (as a vice president of the BJP) was in the forefront of those who had attacked Sinha in March this year for presenting a Union Budget that was perceived to be against the interests of the middle classes and the salaried sections.

Verma was also among those who had held Sinha responsible for the BJP's pathetic performance in the capital's municipal elections.

The author is Director, School of Convergence @ International Management Institute, New Delhi and a journalist with 25 years of experience in various media - print, Internet, radio and television.

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