Former Prime Minister of India - Shri Atal Bihari Vajpayee

PM's inaugural address at 39th Indian Labour Conference

~I am happy to be with you today to inaugurate the 39^th Session of the Indian Labour Conference. The Government has always benefited from the deliberations and recommendations of this unique tripartite platform.

The annual session of the ILC is an occasion to survey the national economic scene in the context of what is happening in the world. It is an occasion to revisit some of the issues that have figured prominently in the debate on economic reforms in recent years. Above all, it is an occasion for us to achieve a convergence of views on how we can together make India a stronger and more prosperous nation, with economic and social justice for all her citizens.

Friends, today India is a nation on the move. We have made significant all-round progress since economic reforms were unveiled slightly over a decade ago. Our economy is growing stronger by the month – indeed, it is rated as one of the fastest growing economies in the world. Prices of essential commodities are stable. Our foreign exchange reserves are close to crossing the 100 billion-dollar mark. Contrast this with the situation some years ago when we faced a severe balance of payments crisis and had to pledge our gold.

Reforms have begun to unleash the untapped productivity in our economy. It is helping us to better harness the nation’s resources. Despite many difficulties and obstacles our domestic industry has achieved robust growth last year. You are well aware of the impressive turnaround that our manufacturing sector has achieved. You are also aware that, doomsday predications were being made about this sector. ~India would not be able to face the onslaught of global and regional competition in manufacturing,~ it was being said.

Well, these predictions have been belied. Just look at the figures. India’s iron and steel industry has emerged out of a prolonged recession and, since 1998, its exports have nearly doubled. The public sector Steel Authority of India Ltd. (SAIL) is on a strong rebound. Indian passenger car exports have nearly tripled in these five years. Indian vehicle component exports, which were only 350 million dollars in 1998, are expected to reach as much as 1.5 billion dollars this year – and 10 billion dollars by 2010.

The world is applauding India’s similar success stories in IT, telecom, pharmaceuticals, housing and road construction, and other areas of industry and infrastructure.

How did these successes happen? I have no hesitation in saying that the answer to this question can be summed up in just one single word: Change. Whatever we have achieved is because all the players in the economy – the Government, workers, managers, scientists, engineers, and entrepreneurs – have begun to embrace the imperative of change.

We changed our policy in telecom and IT, and the result is a boom in telephone connectivity and software exports. We changed our approach to financing and building highways, and the result is the promise of world-class road connectivity.

Similarly, you changed the way you worked on the shop-floor, you changed your tools and technologies, you changed your product range and marketing practices, and the result is greater productivity and faster growth.

This is also borne out by the experience of all those countries that have achieved faster growth in recent years, and have succeeded in improving the quality of life for their citizens.

Therefore, we should not be afraid of change. We should change all that needs to be changed and leads to the larger good of our nation and our people.

After having observed the ups and downs of our national economy for many decades, I have come to the conclusion that India has suffered much because of three types of beliefs. First, the belief that held that private enterprise is only for maximizing wealth for the employers. Second, the belief that held that there is a fundamental contradiction between the class of employers and the class of employees. Thirdly, there was the belief among some in the Government – and that belief is still there to some extent – that their job is to control everything, and not to facilitate investment and growth.

We have to change this mindset. We should replace it with a single overriding belief – namely, that faster growth in all sectors of the economy, and in all regions of our vast country, is critical for faster eradication of poverty. It is critical for faster generation of employment and self-employment opportunities for all our young men and women. I must also point out that it is critical for strengthening our national security.

This means that employers have to be more sensitive to the needs and concerns of their employees. Are you fulfilling all your social security obligations for your employees? If you are a big unit, are you making your suppliers and distributors provide social security to their employees? Are you investing enough in making the workplace safer and healthier?

Similarly, the new economic compulsions require workers and their trade unions to be sensitive to the needs of their business units. For example, restructuring of business models, reorientation of production, and flexibility in working conditions are crucial for our business units to be competitive in the new environment. Wherever this has happened, it has benefited both businesses and their employees.

There is another important question. It is true that many companies can no longer guarantee a life-long employment. But can they not guarantee employability? This is a concern that many potential VRS seekers have. Skill and capabilities of workers, displaced in the process of restructuring is important for their reintegration in the mainstream of economy.

You might have noticed how the new economy has changed the nature of employment fundamentally. Increased ancilliarisation in production system and contract manufacturing has shifted the focus of employment from the organized sector to the service and peripheral sectors. Our strategy on employment now needs to be reviewed and reassessed keeping in mind the under-currents and complexities of the new economic order.

For example, several million new jobs have been created in the IT sector – and many of these jobs did not exist even five years ago. Indeed, there is a big debate going on in the United States, in which some argue that outsourcing by American companies is taking away jobs to India. I would not like to comment on that debate. The point is, it is essential for our employment strategy to anticipate technological and institutional changes so that workers could be equipped with the tools to handle the challenges thrown by the new economic order.

A mismatch between the skill requirement and skill base of job seekers has for long been an important reason for unemployment and under employment. A majority of our work force does not possess any identifiable marketable skill. It is, therefore, necessary to re-orient and restructure our educational and training system meaningfully to meet the requirement of the changed employment scenario.

Friends, speed has become a crucial determinant of success in our productivity and employment strategies. We cannot afford to dither or delay our action. The world is not going to wait for us if we choose to be slow and half-hearted in our reform process. I have full confidence in our workers, trade union leaders and entrepreneurs. You have always been enthusiastic participants in the wider process of development.

I, therefore, urge you to realize the new realities of the domestic industrial climate and new aspirations in the labour market. These realities and aspirations have necessitated a fresh look at the legislative, administrative and judicial system. Your cooperation is vital for evolving a common vision to boost productivity, production, competitiveness and the employment creation potential of the Indian economy. I assure you that in this process, the interests of our working class will never be ignored.

You will agree with me that the existing labour laws are only for those who are employed in the organized sector. The organized sector forms a very small part of total labour force. We wish to bring suitable changes in the legal framework so that it could serve as an instrument for speedy employment generation in all sectors of the economy. Our aim is to make our laws respond better to the needs of millions of poor people in our rural and urban areas, working as landless labour, contract workers on building sites, on road construction, street vendors, etc. I urge the workers’ organisations to make these segments of our workforce a major focus of their activity.

My Government is fully aware that providing basic social security to workers in the unorganized sector continues to be the biggest challenge before us. Despite various constraints, we have been able to improve the conditions of unorganized labour to some extent by a series of special programmes. The Central and some State Governments have set up welfare funds for different categories of occupations. The recently announced Universal Health Scheme and Varishtha Pension Bima Yojana cover the workers in the unorganized sector as well. An umbrella legislation to provide labour protection, medical care, old age pension and insurance cover to the workers in the unorganized sector is also on the anvil.

The Government’s commitment to the welfare of our workers and farmers was evident in the recent WTO Ministerial Conference at Cancun. We did not compromise on the interest of our farmers and working class – and we shall not do so under any circumstances. We want a fair deal for them in all international trade and business matters. It is really unfortunate that protectionism in the developed world is growing just when developing countries are being exhorted to liberalise their trade regimes.

Friends, this session of the ILC is being held at a time when many important issues are being intensely debated by all the stakeholders in our economy. I am confident that the deliberations in the ILC will throw up fresh and practical ideas for collective action for the well being of our working class and for the speedy progress of our nation.

Thank you.~