Sunday, August 12, 2012

Don't turn Gurgaon into a Faridabad


It was the same question on everyone's lips. Aggrieved Suparna Prasad Dev asked, "If 50 policemen were at the scene, why didn't they act when a hundred Maruti workers brutally attacked managers and killed my husband?" When the police did finally act, it was too late. The factory was in flames, almost a hundred managers were bleeding, many injured seriously. Awanish Kumar Dev, head of human relations, was dead.

There are many lessons in the recent tragedy at the Maruti-Suzuki factory at Manesar in Gurgaon district. One of them is that labour trouble is not only a management's or a union's problem but a vital concern of the state. Haryana has not learned this lesson. It destroyed the vibrant industrial town of Faridabad more than a generation ago due to poor industrial relations. It is now bent on scaring industry away from Gurgaon as well. Last year's unrest at Maruti resulted in Rs 2,500 crore loss. This is a shockingly high figure-half a billion dollars-for any company to lose anywhere in the world from industrial trouble. For Suzuki, whose Indian operation brings in half its global profit, it is appalling. For a Japanese company to be continuously in the news for labour unrest is extraordinary when Japan has taught teamwork and industrial harmony to the world. Suzuki should ask itself if it has the right persons in charge.

The role of the state is less obvious. In the 1970s, Faridabad had an active municipal government, fertile agriculture, a direct railway line to Delhi, and a host of industries. Gurgaon at the time was a sleepy village with rocky soil and pitiable agriculture. It had no local government, no railway link and no industries. Compared to Faridabad, it was wilderness. Thirty years later Gurgaon has become the symbol of a rising India. Called 'Millennium City', it has dozens of shiny skyscrapers, 26 shopping malls, seven golf courses, countless luxury showrooms of the world's most famous brands. It has 32 million square feet of commercial space and is home to the world's largest corporations. Its racing economy is reflected in fabled apartment complexes with swimming pools, spas and saunas, which vie with the best gated communities anywhere. How did this happen?

Gurgaon's disadvantage turned out to be an advantage. It had no municipality and was more or less ignored by the state government. This meant less red tape and fewer bureaucrats who could block its development. Seeing its stupendous rise, people began to ask, why do we need a government at all - with corrupt politicians and unresponsive bureaucrats? When they saw prosperity spreading across the nation amidst governance failure, they cynically claimed, "India grows at night when the government sleeps." But the Maruti incident teaches that India also needs to grow during the day. It needs an effective state. An alert police could have prevented the tragedy. Rational labour laws would have stopped Maruti from hiring contract workers, whose status and benefits are at the root of the worker unrest. If red tape and corruption are the downside of Faridabad's governance model, then the problem with Gurgaon's laissez faire model is the lack of basic services-it has no functioning sewage system; no reliable electricity or water supply; no decent roads or public transport.

A sensible company in India will not hire a permanent worker today because of our senseless labour laws. Instead, it hires contract workers to which it denies long-term benefits. Meant to protect workers, the laws have harmed them. They are the main reason why India has not been able to create a manufacturing revolution and create more jobs. The spread of contract labour has reduced the bargaining power of unions as well, who now represent less than 4% of India's workers. Nowhere in the world has so much harm been done by a piece of legislation.

The lesson from the Maruti story is that India cannot forever grow at night. It must have an effective state which upholds the rule of law and grows during the day. Neither Faridabad's nor Gurgaon's model of governance are the right ones. Haryana should ponder over the vigorous competition that exists between the states for investment. It will lose out to the states that offer better governance.

11 comments:

Kishore Asthana said...

WE ARE A GROUP OF (MOSTLY) YOUNG PEOPLE WHO ARE IN THE PROCESS OF ESTABLISHING A NEW POLITICAL PARTY AND ARE LOOKING FOR MENTORS SUCH AS YOURSELF. WOULD YOU BE INTERESTED IN DISCUSSING THIS? IF SO, PLEASE CALL ME AT 9818148602 OR SEND AN EMAIL TO ASTHANA1@YAHOO.COM.

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Kishore Asthana said...

WE ARE A GROUP OF (MOSTLY) YOUNG PEOPLE WHO ARE IN THE PROCESS OF ESTABLISHING A NEW POLITICAL PARTY AND ARE LOOKING FOR MENTORS SUCH AS YOURSELF. WOULD YOU BE INTERESTED IN DISCUSSING THIS? IF SO, PLEASE CALL ME AT 9818148602 OR SEND AN EMAIL TO ASTHANA1@YAHOO.COM.

I LOOK FORWARD TO HEARING FROM YOU.

Kishore Asthana
President, Mensa India Delhi

Debashis Gupta said...

The idea that Gurgaon grew due to the relative absence of a Govt. is a good insight. Indeed, if the politicians would just get out of the way and limit so called Government to the basic domains of law & order and common facilities, private enterprise can do much better in most other fields. But the bane of the country is that the political class want to wring the last drop of blood from the veins of hardworking entrepreneurs, not providing anything in return. Gurgaon is prime example - it contributes almost half the revenue of Haryana but the spending on its essential facilities is not even proportional to its population, much less the revenue! Minimal government is the best government...

knowhisjob.com said...

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3mik said...

Very good article but Police is a reflection of our society.If police does not act,its a failure of the society,its teachings.

Anonymous said...

Well said sirji..Gurgaon is booming city. I love shopping and malls in Gurgaon.

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