First, the good news …

Arvind Subramanian, the Chief Economic Advisor in India’s Finance Ministry, claims the nation is on course to post close to 8% growth this fiscal year.

That may be sweet music to Prime Minister Narendra Modi’s ears.

But the bad news is that Arvind’s boast may sound like a cruel joke to millions of ordinary Indians hit by a nationwide industrial strike on Sept. 2.

Average folk must be wondering how the nation can reach that GDP figure if unions go on strike at the drop of a hat.

Police personnel detain activists during a nationwide strike in Kolkata Wednesday
Police personnel detain activists during a nationwide strike in Kolkata Wednesday

By rough estimates, India’s economy may have suffered a loss of at least Rs 250,000 million ($3,778 million) after about 300 million industrial and blue collar employees joined Wednesday’s industrial strike.

The strike sideswiped industrial activity as banks, insurance companies and state-run as well as private factories and transport unions shut across the country.

Educational institutions remained closed and government offices wore a deserted look.

The strike also affected cargo movements at ports across the country.

This is the first nationwide protest since Prime Minister Narendra Modi took power more than a year ago.

While the strike affected everyone is some way, poor daily wage earners were worst hit. With public transport and other vehicles off the roads, they were unable to reach their respective work sites.

The strike was in support of 12 demands, including withdrawal of labor law amendments, a minimum wage of Rs 15,000 ($225) a month and against privatization of public sector units.

While workers have the right to strike for better pay, Asia Unhedged thinks this is a clear case of unions serving their own political interests than workers’ welfare.

Word is before the strike, a major union had the government on the verge of agreeing to nine of 12 demands of the workers. When the strike began, that union withdrew from the strike in protest. This creates a sneaking suspicion that Wednesday’s shutdown was engineered by Congress and Left parties.

A larger lesson is that apart from politics, labor unions must reform as the Indian economy becomes globally more competitive, knowledge- and skill-based.

While protecting workers’ interests, unions should adopt the smarter approach of demanding more funds for updating workers’ skills to give them the competitive edge. This will make state and private units that employ them financially stronger. And while they’re at it, unions should demand better working environment, compensation, and housing and pension benefits for the working class they represent.

If they serve political interests rather than taking a pro-worker approach, sooner or later it is they and not the state who will wither away.

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