Gurgaon Workers News – Newsletter 3 (May 2007)
Gurgaon in Haryana is presented as the shining India, a symbol of capitalist success promising a better life for everyone behind the gateway of development. At first glance the office towers and shopping malls reflect this chimera and even the facades of the garment factories look like three star hotels. Behind the facade, behind the factory walls and in the side streets of the industrial areas thousands of workers keep the rat-race going, producing cars and scooters for the middle-classes which end up in the traffic jam on the new highway between Delhi and Gurgaon. Thousands of young middle class people lose time, energy and academic aspirations on night-shifts in call centres, selling loan schemes to working-class people in the US or pre-paid electricity schemes to the poor in the UK. Next door thousands of rural-migrant workers uprooted by the agrarian crisis stitch and sew for export, competing with their angry brothers and sisters in Bangladesh or Vietnam. And the rat-race will not stop; at the outskirts of Gurgaon India’s biggest Special Economic Zone is in the making. The following newsletter documents some of the developments in and around this miserable boom region. If you want to get to know more about working and struggling in Gurgaon, if you want more info about or even to contribute to this project, please have a go at:
In the May issue you can find:
1) Proletarian Experiences -
Daily life stories and reports from a workers’ perspective
*** “Thousands of invisible hands moving the automobile [sic!] industry in Gurgaon area, Part One” -
A short introduction to the local automobile industry, plus five Faridabad Majdoor Samaachaar reports from workers employed in different companies of the supplying sector (Yamaha Motors, Super Auto, Talbros Engineering, GEMI Motors, Alpha Instruments)
*** “After the Slum Fire” -
Short note on a slum fire in Gurgaon, which destroyed about 800 huts of families of cleaning and recycling workers on 24th of April 2007. The first two days after the fire office bosses came down to the slum, asking why their offices kept on being dirty.
*** “Whose security is it anyway?” -
Reports from Security Guards in Gurgaon, one of them employed by G4S, formerly known as Group4. The worker reports about the massive and open money swindle the company undertakes. Another guard reports why he had to work 48 hours without a break.
2) Collective Action -
Reports on proletarian struggles in the area
*** “Unions and the Law” -
A short introduction to the Industrial Disputes Act and some general thoughts on union-related local problems.
*** “Amtek Incident” -
Short report on a union struggle in the automotive supplying industry which happened in 2006. Permanent workers got bashed up by paid goons while the division between permanent workers and workers hired through contractors remained unharmed.
*** “Fashion Express” -
Recent dispute in Gurgaon in March and April 2007. Permanent workers of the textile export company occupy the factory after union leaders got sacked. Most of the demands of the union could be enforced, but the complaint of sexual harassment made by women workers against the owner was dropped under the negotiation table.
3) According to Plan -
General information on the development of the region or on certain company policies
*** “Concrete on Soil: A Glimpse at Urban Development in Gurgaon, Part One” -
Some background information on population development, land acquisition, planned urban projects and the bubbling real estate sector in Gurgaon.
*** “Not yet special enough: Special Economic Zones, Part Two” -
The developers face more resistance from local farmers and the nuisance of legal changes while trying to convert land ownership into capital.
*** “Corporate Watch” -
News items on companies situated in Gurgaon, this month on:
Aksh Optifibre Limited, Brite Group, Didi World of Fashion, Eastern Medikit Ltd., Fashion Express, Hexaware, Infovision, JBM Group, Koutons, Mercury Press San Jose, Pepsi, Sandhar, Strabag, Stryker, Whirlpool, ZTE Corp
4) About the Project -
Updates on Gurgaon Workers News
*** We proudly present / We urgently request -
New Makeshift Multi-Media Section on the Website and Workers’ Film Documentaries for Local Workers’ Resource Centre Project.
*** Glossary -
Updated version of the Glossary: things that you always wanted to know, but could never be bothered to google. Now even in alphabetical order.
1) Proletarian Experiences
The automobile industry is of major importance in the Gurgaon and Faridabad area. According to an IBEF presentation of Haryana published in October 2005, half of the four-wheelers and 60 to 70 percent of the two-wheelers manufactured in India are manufactured in Haryana, which basically means in wider Faridabad and Gurgaon area. Half of the industrial work-force of the state is said to be employed in the automobile sector. Given that about 70 per cent of the industrial work-force is officially non-existent, due to not being registered, official numbers are not to trust. In the 2001 census Haryana had a 40 percent ‘work participation’ rate, which can be translated as roughly 8.4 million wage workers. The census then distinguishes between ‘main’, ‘agricultural’, ‘household industry’. The main work-force comprises 65 percent, which would be around 5.5 million official ‘urban work-force’. The number of automobile workers in the Faridabad-Gurgaon-Manesar belt is difficult to assess. The main assembly plants alone (including trucks, tractors, two-wheelers) employ somewhere around 50,000 workers. Maruti alone has 400 first tier suppliers, Hero Honda 240, … and the supply-chain has many more hidden links within the area.
Often parts have many tiers to pass through before they end up at the Maruti or Hero Honda main factory. For example, rubber hoses for carburetors arrive in the form of rubber blocks in Mujesar, a village in Faridabad surrounded by industry. What remains of the village is the scattered layout of the small one-story shanty huts with cows and goats in front. The rest is transformed by the industry. Inside the huts people work on 1970s laces of German origin, turning metal or working on antique power presses. Maruti’s supply-chain starts here. In the backyard of one of the huts there are three different garages, each is one company. In one garage, door hinges are galvanized, the chemical liquide up to the ankles of the workers. In the other room a woman works in the dark next to a mind-numbing noisy generator, de-burring metal parts. In the third garage two children take the fin off rubber hoses, covered in black dust, operating a one-phase electrical engine. Two workers next to them have just finished pressing and cutting the hoses with a hand-wheel press. The woman and the children get 800 Rs to 1,200 Rs per month (see glossary), for a ten to twelve hour shift, a six to seven days week. One of the workers is the official owner of the rubber hose company; he used to be a permanent worker in a rubber hose manufacturing company and this is where he got the contract. The rubber hoses end up at Mahindra, Maruti/Suzuki and in the railway industry. They will pass through another four to five suppliers and the hands of hundreds of workers on the way.
The amount of capital involved increases when we approach the main plant. It starts with slum production, women sitting in front of their houses sticking together plastic parts. It moves on to smaller workshops like the ones we have just described, on to medium work-shops, mainly doing sheet-metal work. Then we reach small and medium sized factories like those of the following reports. In the final suppliers like Delphi, Bosch, Mitsubishi, Denso, and Sona Koyo in Gurgaon and Manesar the technological standard is similar to that in the main car or scooter/motor bike plants. Apart from Maruti/Suzuki, Hero Honda, and Honda HMSI there are other automobile assembly plants in the wider sense, e.g., Escorts tractors, Eicher trucks, Claas agriculture vehicles, and JBM excavators, and they often extend into the same industrial network. Even between local suppliers, parts have to go a long way, e.g. Hero Honda in Gurgaon receives gears from Shivam Auto-Tech in Manesar, which is 20 km away, while Shivam is supplied with metal parts from KDR in Faridabad on a daily basis, passing Gurgaon on the 70 km trip. Maruti/Suzuki changed their supplier policies in the 1990s, cutting the number of direct suppliers from 800 to 400, out-sourcing the responsibility for on-time delivery and quality. The total number of suppliers is said to be 6,000, not including the workshops in Mujesar. Suppliers manufacture the most crucial parts right on the Maruti premises.
The automobile industry extends into a fragile net of manufacturing units and keeps a mass of casual workers circulating within. Ask any of the security guards, cigarette stall workers or auto-rickshaw drivers in the area and they will know someone working in the industry, if they have not worked there themselves. And the hierarchy within the workforce of Maruti persists after workers have been kicked out. In Maruti Vihar in Gurgaon, a housing colony for permanent workers built in the 1980s, the medium-sized clothes shop belongs to a former Maruti unionist and permanent worker kicked out during the 2003 strike against the Voluntary Retirement Scheme, while a former contract worker now handles the cigarette stall in front of the house. His wife and three children live in Ilahabad, but there is no work. He prefers the work at Maruti to the work at the stall, where he has to hang out for fourteen hours a day and hardly makes 2,000 Rs at the end of the month. On Sundays he cleans the house and car of his landlord.
There is more to be written about the industrial structure and the circulating work-force, mainly because we get a glimpse of how workers can turn this social cooperation against the regime of capital. In the coming issues of the newsletter we want to have a closer look at the main automobile actors in Delhi and Gurgaon and the recent workers’ unrest which they had to face: Maruti/Suzuki and the trouble with the Voluntary Retirement Scheme, police repression and contract conflicts at Honda (HMSI), Hero Honda factory occupation and its chain reactions of workers’ unrest. There is more to come.
Following are five reports from workers employed in the automobile supplying industries in Faridabad. They describe the conditions in the first-tier suppliers. They are translated from Hindi. Their stories were published in Faridabad Majdoor Samaachaar (FMS) no. 220, no. 222, no. 223, during October 2006, December and January 2007
Yamaha Motor Worker
19/6 Mathura Road, 250 workers are hired through 24 different contractors. At first workers could stay when the company changed the contractor, but they started to replace the workers together with the contractor, which meant that people got sacked after more than ten years of continuous employment in the factory. Today only in the spare parts department there are fifteen of us older workers left, fifteen workers who are hired through contractors. They intimidate us, but the togetherness amongst us is good. Nevertheless, the situation is precarious. We used to give our dues to the union, after seven years of taking our dues, the union gives the money back to us (which means that they refuse us as members). In this situation we took steps ourselves, for our interests. Three years ago stopped work for one week, then our wage was increased by 700 Rs and they accepted that overtime is paid at double instead of single rate, they agreed to give us 12 to 14 paid holidays per year, and to give 10 Rs for food for each working-day. Every three months wages are checked according to the DA (see glossary), but although the permanent workers get their wages increased accordingly, we do not receive any additional money. This January our wages have been increased by 30 Rs, this is after three years receiving the same wage of 2,968.20 Rs. You cannot make ends meet with this wage. The permanent workers who work next to us get 15,000 Rs.
Super Auto Worker
Plot no.84, sector 6. Out of the 500 workers employed in the factory only about 50 to 60 get PF and ESI. The factory processes sheet metal using power presses, workers often cut their hands. The company keeps some prepared ESI forms, so if there is an accident and workers cut their hands it shows that they get ESI. Amongst those who receive ESI and PF seven or eight workers had cut their hands. During this month alone one worker got two fingers cut off, another one chopped off one finger. The company itself employs 25 workers directly, 100 are employed through Durga Enterprises. The rest are hired through some permanent workers who the company has labelled as contractors (a legal fake in order not having to hire people directly). In the paint shop at the Yamaha, Mahindra, and the Honda lines workers are hired through contractors; the unskilled workers amongst them get 3,000 Rs for a 12-hours day and 30 days month. During the twelve hours they don’t even give you a cup of tea. There is no canteen in the factory and we have to take our meals on the road. Every month the company gets rid of documents. The company has other factories in sector 6, plot no. 13, 50, 79, 80.
Talbros Engineering Worker
Plot no. 74 – 75, sector 6. In the factory there are 25 permanents employed and 1,000 workers are said to be hired through a contractor, but in fact it is the company which does the hiring. Out of the 1,000 who are documented as hired through the contractor only 60 get ESI and PF. The monthly? wage for ‘unskilled work’ is 1825 Rs. The factory runs two 12-hours shifts and it is obligatory to work 30 days per month. They define when to enter Talbros, but they do not fix a time when to leave the factory. Overtime is paid at single rate. If you cut or wound yourself at work you receive a little treatment and then you get dismissed. The factory manufactures parts for Tata, Mahindra, Bajaj, Massey and others.
GEMI Motors Worker
Sector 11, Model Town. First the sign at the factory said American Universal, after that GE Motors, and now the name is GEMI Motors. The factory is very clean, but the 10 Rs meal in the canteen will not fill your stomach. If you ask for seconds the canteen guy turns a deaf ear and says that for 10 Rs this is how much you get. They say that the company contributes with 15 Rs to each meal. For the packing and cleaning the company employs workers hired through contractors, and there are trainees in the categories of six months or eighteen months. By luring and by inflicting fear the company increases the work load of the trainees constantly. It is said that the company factories in America have holidays on Saturdays and Sundays, but here the factory runs even on Sundays. In New Plant on Sunday the 24th of December the company reached a limit. During the year itself production had been increased by 40 per cent and on the 24th of December the manager came and said that on that day we would be allowed to go home once we increased production by 80 per cent. The shift started at 6 am and the few permanent workers who arrive on Sundays left at the end of the shift at 2:30 pm, but in order to meet the production target the trainees had to work till 5 pm. Officially the company does not acknowledge overtime. The two and a half additional hours after the end of shift will not be paid for by GEMI – GE Motors. On 24th of December the company made the workers do unpaid labour.
Alpha Instruments, Abhirashi Impex Worker:
30/2 Industrial Area. Work starts at 9 am and 4 to 5 workers leave the factory at 6:30 pm, the rest of the skilled workers at 7:30 pm. The casual workers and those who do the packaging work have to stay as long as necessary, sometimes they work for 48 hours continuously. Those who stop at 6:30 pm neither get a tea break, nor are they paid the one hour overtime. Those who work till 7:30 pm get tea and biscuits at 7 pm and their two hours overtime are paid at single rate. If they keep you for longer than 10 pm they give you 10 Rs for food. More than half of the workforce does not show up in the official documents, they do not get ESI or PF. The initial wage is 1,500 Rs per month?. In the factory, which got shifted from SGM Nagar to Industrial Area, the management set up three different companies in order to make the workers show up in this or that document. By doing this the management has done away with workers’ 8 to 10 years of employment and the benefits attached to this. The company directors are father and son and the father always is always putting pressure on us. Two months ago a woman worker submitted a complaint at the labour department, the company did not bother to send a representative, instead they sent a permanent worker and presented him as a manager. The permanent workers handed in a complaint in the labour department on 24th of November. In reaction to this on 29th of November most of the casual workers were dismissed. The company, which has never paid on schedule, this time paid the November wage on 9th of December and for the first time the permanents received a pay slip as well. Now many permanent workers finish their work at 5:30 pm. The company has never paid the statutory annual bonus, but when the November wages were paid, they even made people sign the bonus register. The factory manufactures auto-meters for all kinds of vehicles. Most of the products are for export to America, Britain, Germany, Holland, and Turkey. The company gave only four holidays during the whole year.
The following newspaper-clip about the fire in a Gurgaon slum is small. If 8,000 to 10,000 rich people would have lost their houses in a fire (the article speaks about 2,000 destroyed jhuggis), it would have been on the national TV- news.
“Tuesday, April 24, 2007 (16:31:36)
HR: Major fire at Gurgaon slum
Gurgaon: Around 2000 huts in a slum were destroyed in a major fire that broke out in the early hours of Tuesday. No one was injured in the fire that broke out in the area near Wazirabad village at about 2:30 am, fire officials said. Eighty fire tenders from four fire stations were pressed into service which took five hours to extinguish the flames, they said. The cause of the fire is yet to be ascertained, they said. Small gas cylinders weighing one to five kilograms created problems for the fire officials as they kept bursting after regular intervals, they said. Cycles, rickshaws and other vehicles were reportedly gutted in the fire, they said. (PTI)”
The slum is close to Golf Course Road – St Thomas Marg crossing, where a lot of new office towers and upper-class housing estates are situated. The basti might have comprise 2,500 jhuggis altogether, about 800 have burnt down. Most of the people came from West-Bengal, they live in the basti for three to four years. They do recycling work, house keeping and cleaning work in the nearby offices and housing estates. There were no complaints by authorities or any other trouble before the fire broke out. There is no compensation our any aid after the fire. The people who lost their homes now live with neighbours or started to make new make-shift huts. Some pics of the charred landscape and of the people rebuilding are on the make-shift photo-section of the web-site. People reported that the first and second day after the fire bosses from the offices came to the jhuggis, inquiring why their offices kept being dirty, why their cleaners have not arrived at work…
Workers’ life time, energy and acceptance to risk physical damage is a cheap commodity. There is a night security guard in front of each upper-middle-class house of Gurgaon areas like Sushant Lok and the lifetime wage of the guard will amount to less than the price for the wooden entry door and front widows. There are two guards in most of the stores of the shopping malls. With the rise of a middle-class which has less modesty when it comes to the display of their wealth, the security business becomes a big one. The major global players are in India, too. While Group4 runs private prisons in the UK or supplements the Israeli army, in India their employees secure factories, call centres and other buildings from ordinary people. In Gurgaon the union AITUC managed to get their foot in and organise a number of workers, but this is an exception given that most guards belong to smaller companies or are employed on a personal level.
For example Subod works as a night-guard for a tower-bloc of middle-class apartments in South City Gurgaon, he has to sit and watch, open the gate for cars, ask visitors who they want to visit. He is from Bihar, and visits his village and family twice a year. He used to work as a casual worker at Maruti, but he was kicked out. He also worked in factories in Faridabad, but he stopped due to the health hazards and stress level. For the past six months he has worked twelve hour night-shift without a day off. Working 84-hours per week he gets 2,000 Rs per month. He has no proper work contract. When the guy from the day-shift fell ill, the housing association did not get someone to jump in, so Subod had to work the day-shift as well. He is afraid of losing his job, so he would not accept the help of a friend who offered to do six hours of his night-shift. He worked 48 hours on stretch. The situation at the world’s biggest security company is hardly better:
G4S – Group4 Worker
FMS no.218, August 2006
Security Guard: The company name used to be Group4, then it changed to Falck and now it is G4S. The company’s headquarters for India is in Panchvati, Gurgaon. The company employs about 90,000 security guards all over India. Group4 alias G4S openly misappropriates the provident funds of the workers. The company used to base the ESI and PF payment only on the basic wage. Currently the ESI (health insurance) payment takes the DA (inflation compensation) into account but the PF (pension fund) is still only applied to the low basic wage. The basic wage of a guard is 1,200 Rs and it is only this which PF is applied to – this practice is done to 90,000 guards every month and this is also shown in the documents.
As with other companies, there are things which are not shown in the documents and which are an even bigger scam. Each month a security guard makes 100–240 hours overtime, but the company does not show this in the documents. The overtime payment is at single rate. A guard works every day, 30 days per month. Together with the 30 days of normal attendance there should be overtime shown for 30 days in the books, as well.
The G4S company gives two pay slips. One pay slip shows 26 working days of eight hours each and the according wage of 2,447 Rupees. On this payslip it shows that the ESI contribution is cut from the 2,447 Rupees and the PF from the 1,200 Rs basic wage. On the second pay slip the overtime payment is documented, but it is shown sometimes as travelled kilometers, sometimes as conveyance or for something else – but never as overtime. The amount on the second pay slip is supposed to be paid fully, but money is cut; according to the document it is cut in the name of ESI. As by law the guards make 40 crore Rupees worth of overtime, but G4S company and management swindle 20 crore Rs from the guards every month. The company officer also forces the guards to work 36 hours continuously and they are not even given money for food during this time. The company talked about giving two uniforms per year, but the management gives only one.
2) Collective Action
First we give (A) short overview on the legal constraints, then there will (B) some more thoughts on problems of union struggle in the area, in the last part you will (C) how these problems play out during two examples of more or less recent industrial disputes.
(A) The Law
The following is a rough extraction from the Industrial Dispute Act, 1947, giving some background of the legal framework in which strikes in India take place. Theoretically any group of workers with a common cause (which has to be legally accepted as a cause for industrial dispute, e.g., wages, unfair dismissals) can raise an industrial dispute. The group of workers need not be union affiliated, but has to comprise at least 1/12 of the total work-force of the company. If the company and workers or union cannot settle the dispute by negotiations, workers have to address a Conciliation Officer, engage in voluntary arbitration or finally address the Labour Court and Tribunal. The government has the legal opportunity to refer the dispute to the Labour Court.
A strike is prohibited while conciliation proceedings are pending before a Board and seven days after the conclusions of such proceedings. The same is valid during proceedings before a Labour Court or Tribunal and two months after conclusions of such proceedings. A strike has to be announced 14 days before it starts, and it must not start later than six weeks after notice has been given. In the “national interest” the government can declare a strike illegal (the scope of the “national interest” could be seen when the state government of Tamil Nadu wanted to illegalise the strike at Toyota car plant in 2006 “in the interest of the nation”). Striking workers have no legal right to prevent (strike-breaking) employees from entering the plant, or to obstruct goods, trucks, etc. from leaving it. Neither have workers the legal right to use or enter the place of work if they “have no intention to carry out their work” (sit-in strike).
(B) The problems of union struggles
Some specific local factors aggravate the problems of union organisations. In the Gurgaon belt mainly the bigger factories or companies have a union representation. In summer 2006 AITUC reportedly has about 30-35 unions in the Gurgaon belt, HMS has about 15-20 unions (eg. Lomax, Deep Autos), CITU has about 15 unions in the area. This is a small minority. To this adds that in India unions often only represent the permanent workers on the shop-floor, which in many industries in the Gurgaon-Faridabad area account for less than 30, 20, … per cent. Classical forms of representation and the main aims of unions (‘defending the market value of a specific group of work-force’) is less applicable when it comes to mobile contract and migrant workers, who tend to switch between locations, sectors, modes of employment. In times of confrontation the unions in the area tend to fight for their permanent members, sometimes at the cost of workers hired through contractors or other ‘casual’ workers.
The legal restrictions and the vast supply of potentially strike-breaking work-force (migrants from the country-side etc.) and – at least in the textile and smaller industries – the mobility of industries (the possibility to shift plants and units within the area) undermine most tradionally lead struggles. A lot of openly and legally lead strikes (necessary for the organisation’s recognition or reputition) end in lock-out situations and in the repression of workers by capital and state. Often companies make use of or even provoke a strike/lock-out situation in order to change the existing composition of work-force or capital in their favour.
(C) Examples of recent industrial disputes: Amtek and Fashion Express
Overview on company structure
According to the company website (www.amtek.com) the Amtek Group of Companies is a $650 million global auto component company with 25 manufacturing facilities in Asia, US and Europe. It is the largest flywheel ring gear manufacturer in the world. It is a tier 1 supplier to major auto makers around the world.
The company started manufacturing in Sohna, India in 1987. Forging operations in Gurgaon started in 1993. In 1997 a joint-venture with the Japanese company Benda Kogyo Limited was forged. Since then Amtek bought or merged with various medium-sized (European) automobile suppliers, starting in 1999 with the collaboration with Ateliers de Siccardi of France.
In 2006 Amtek has about a dozen plants in the Gurgaon area and the international group consist of, amongst others: Amtek Gears Inc., located in Bay City, Michigan (USA); Amtek Aluminium Castings UK Ltd., GWK Amtek Ltd. (UK), Lloyds (Brierley Hill) Ltd. (UK), Midwest Mfg. Co. (US), Sigmacast Iron Ltd. (UK), Zelter Gmbh. (Hennef, Germany).
Amtek supplies parts to many automobile companies, for example: Ashok Leyland Limited, Aston Martin, Bajaj Auto Limited, BMW, CNH Global, Eicher Motors Ltd., Escorts, Fiat India, Ford, General Motors, Hero Honda, Hindustan Motors, Honda Scooters, Hyundai, Jaguar, John Deere, JCB, Kawasaki, Land Rover, Mahindra & Mahindra, Maruti Suzuki, MG Rover, Piaggio, Saab, Scania, Tata Motors, Toyota, and Yamaha Motors India.
Chronology of the Dispute
In hindsight it is difficult to trace the reasons for why on the 6th of June 2006 about 20 permanent workers and CITU union members got beaten up by paid goons or, as other sources say, by workers hired through contractors on the behalf of the management. Though the underlying reason for the attack is a longer dispute between the management of Amtek and the CITU union representatives, some elements of the dispute might have been on a rather personal level (some union members got dismissed for allegedly not paying their company phone bill, etc.). Central to the incident is the fact that Amtek, a huge international automobile company, uses this kind of repression in order to enforce discipline at the workplace. Some characteristics of the dispute question certain union forms of struggle: the union having to get engaged in struggles (and risking workers being beaten up) in order to defend or re-instate their official leaders; the complete division if not hostility between permanent workers and workers hired through contractors; the use of the media in order to create pictures of martyrs. We give a short chronology of the incident.
Events leading up to June 6th:
On 14 April 2006, two workers of ASIL had a scuffle outside ASIL premises on the road near Denso (another auto part supplier) regarding a private matter of money loaned to some workers who worked as casuals at ASIL. This happened as they were coming to duty. The casual workers went to the company and reported this incident. Thereafter, ASIL gave a verbal notice to two workers, transferring them from the Manesar unit to an Amtek unit in Gurgaon. Not having received a written notice, both workers showed up for work at the Manesar unit and were not allowed to enter the gates. According to the workers the transfer was legally incorrect, amongst other reasons because no written notice was given. When both workers were not allowed to enter the gates of ASIL at Manesar, the ASIL union (CITU affiliated) protested the matter.
Since 24 April 2006, 20 of the permanent workers were asked by the management to sit in the conference room/reception area and not allowed to enter the factory. They went to the Labour Office (LO) and to the management four times but management refused to compromise.
On 18 May 2006 there was a meeting with the Deputy Labour Commissioner (DLC) and an agreement was reached. However, when the workers reported to work the next day on 19 May 2006 they were still not allowed to go in. So the workers went back to the DLC, who sent them to the LO, but still there was no agreement.
On 5 June 2006 there was another meeting with the DLC with management and union representatives where Mr. Vikal, Personnel Manager, told the DLC and workers that management would broker an agreement the next day and asked the workers to meet them at 5:30 pm in the conference room/reception area.
The incident on June 6th:
When the workers showed up for the meeting on the 6th of June 2006, the gates of the factory were locked and two vehicles filled with goons were allowed to enter the factory premises; these goons encircled the ASIL workers and finally beat them up using saria and crank shafts that are manufactured at the plant itself. About 22 workers had to be sent to hospital.
One unionised worker reports in a conversation on the 7th of June 2006 that four local (Gurgaon) workers who got hurt had previously been targeted by management. Management has even asked the union to expel him as a member, so that management could then dismiss him from work.
In the local newspapers the management describes the incident from their point of view: ‘Said Baljeet Singh, factory manager at Amtek, “About 20 men went on strike after two of their colleagues were transferred from Manesar to Gurgaon. On Tuesday, the 6th of June, they entered the plant and started breaking things. They also hit our chief general manager on the head. Later, they managed to flee.” The management lodged a complaint against 12 workers on charges of beating the employees, while no complaint has been lodged by the workers against the management. The retelling of some unionists who have not been involved in the dispute puts both pictures together. They assume that negotiations between the CITU unionists and the Amtek management were going on, that then there was some physical fight, and that the management called in contract workers to beat up these permanent workers since goons could not be arranged at such short notice. Proof of this is (a) the so called goons came without weapons and used make-shift weapons such as saria and crankshafts, (b) there was ongoing tension between permanent and contract workers. They say now the permanent workers are afraid to go back to work and are refusing to return until a settlement is reached and they feel protected.
The strategy to charge workers with assault on policemen or managers after they have been beaten up by the latter is common practice in current disputes. In the subsequent court cases the charges against the workers are used in order to blackmail them to drop their charges against the police or managers. In order to react against the power of the law, unions and other workers’ organisations often try to use the media and the images of beaten up workers in order to win over public opinion. This is how the scene looked in Gurgaon Hospital during the night of June 6th:several known union leaders who had just arrived at the hospital and who knew little to nothing about the history of the dispute standing next to the beds of the beaten up workers, holding speeches surrounded by cameras and journalists.
Since 6 June incident:
On 10 June 1,000 workers gathered at KN Park in Gurgaon and marched to the DC’s office and submitted a memorandum and via the DC to CM Hooda (Central Minister of Haryana). On Monday June 19th unions planned to take out a big rally in IMT Manesar that culminated in front of the ASIL factory gates.
Overview on Company
The Fashion Express factory is situated in Udyog Vihar Phase 1, plot no.100 in Gurgaon. The company has two more factories, one of them in Manesar. In Udyog Vihar about 110 permanent workers are employed, in addition to 100 to 150 workers hired through contractors. The workers work six to seven days per week. The workday normally starts at 9 am and finishes at 8 pm. The permanents receive about 5,000 to 6,000 Rs per month the workers hired through contractors about 120 to 150 Rs per day. The company tailors clothes for export, mainly for the US. Buyers are companies like:
There are two major show-rooms in New York the company collaborates with. If the dispute would have carried on, a joint action with activists picketing these show-rooms would have been an important next step.
209 West, 38th Street
1002 Estate or Suite
New York 10018
214 West, 39th Street (or also 38th Street?)
New York 10018
Chronology of the Dispute
According to a statement of the Fashion Express Karmchari Sangathan (union in Fashion Express) the conflict started when two women were sexually harassed by the factory owner. The women went to complain to the local police, but the police did not know what to do against the powerful owner. The women, the union and AITUC representatives went to court. The judge issued summons against Tejpratap Mamik and Gaurav Mamik, the owners of Fashion Express. On 22th of November 2006 the judge sent them into one-day custody.
On 24th of November 2006 the bosses suddenly and without considering legal processes sacked four union leaders and pressured one woman to ask for her final dues. The other woman was called to the office from home and also pressured to ask for final dues and to withdraw her case against the bosses. The union AITUC and Fashion Express Workers Union demanded a solution. Conflicts must have started earlier on given that the demand notice from the union was issued on the 11th of July 2006 and is still pending.
On 20th of March 2007 the permanent workers, represented by the union, stopped work and about 40 of the (women) workers stayed inside the factory. All workers hired through contractors left the factory, having to look for a different job. According to union officials the Fashion Express workers from Udyog Vihar tried to contact the workers in Manesar, but those workers were afraid of losing their jobs, so they kept on working. The union rep, when asked about the relationship between permanents and these workers hired through contractors: “We are separate from each other”. The workers in Manesar actually took over a lot of the work which could not be finished in Udyog Vihar. The clothes were then delivered in the name of Fashion Express.
In the following weeks joint rallies with AITUC members were organised; one took place in the Kamla Nehru Park in Gurgaon. About 500 union members from various companies took part (G4S, Honda HMSI etc.). The rally had the usual character of leaders speaking and members repeating slogans. Nevertheless it is possible to meet and talk to union members from different sectors, e.g.,, from Gurgaon Classical Golf Course. The AITUC had a long struggle to get recognised at the golf course; during the dispute it was closed for several months and some unionists were jailed. About 280 workers are employed on the course.
Concerning Fashion Express unfortunately we do not have any firsthand reports on the situation inside the occupied factory and how the struggle was organised there. This would be particularly important to know because of the fact that many women are employed at Fashion Express. In general (and this is a big difference to similar export sectors in Vietnam or China), the female wage employment in Northern India is low, in 2001 officially about 7 percent.
On the 8th of April about 150 police (wo)men were gathered outside the factory. The police threatened enter the premises and kick the workers out. The workers said that they would stay inside and defend themselves. In this situation the union, employers and the Deputy Labour Commissioner started to negotiate and finally signed an agreement (Section 12(3), a binding agreement). The agreement comprises the following points:
1) The pending annual increment of the last two years will be given to the workers on basis of their performance.
2) Three days wages which have been cut around 1st of May 2006 will be paid to all workers.
3) Annual leave will be increased from 8 to 10 days.
4) The four women workers who had been suspended are to be taken back on duty.
5) Issues related to bonus and annual tour (company leisure travel) will be solved by discussions with union.
6) The dismissal order against the union president and treasurer dated 24th of November 2006 will be taken back and converted into suspension. The management assures that if the atmosphere in the company remains good for one to one and a half months, they will be taken back on duty.
7) The days of strike/occupation will not be paid, “no work no pay.”
8) All workers will remain disciplined and make sure that full production will be given.
9) All legal complaints made by both sides will be taken back, and the complaints made by the women workers against the owner will be withdrawn, so that the atmosphere in the company will be congenial.
10) All issues of the demand notice given by the union on 11th of July 2006 have been resolved.
Work resumed on Monday, 9th of April. Some permanent workers say that only 60 of the former workers hired through contractors came back or were taken back. At the factory gate there is a sign saying that “tailors are wanted”. Unfortunately we have not managed to talk with either the women workers or the sacked workers from the contractors. The positive element of the dispute is that by staying inside the factory workers managed to avoid being bashed up by the police and thereby to enforce some demands. Problematic is the fact that the charge of sexual harassment was used as a negotiable issue and that most of the workers hired through contractors have lost their job due to the dispute. The ‘probation’ situation of the union representatives now puts additional pressure on workers to remain ‘disciplined’.
3) According to Plan
It takes force to divide society into urban and rural. Regarding urbanisation the force of the State under British Colonialism was not too effective. Frank Brayne, the Deputy of Gurgaon in the 1920s and a Victoria Cross holder and Mussolini admirer, tried to introduce something like a first Green Revolution to the agriculture of Gurgaon, but without lasting success. He complained about the slow-moving imperial state and the resisting Muslim Meo population of Gurgaon. His “Gurgaon Experiment” mainly impressed the Oxford University Press.
The proper Green Revolution came later, but it was the first major industrial projects in the 1980s which triggered urbanisation and population growth in Gurgaon. Since then job opportunities attracted more and more (or the agrarian crisis expelled more and more) migrant workers and the expansion of the road network made it possible for better-off people to live in Gurgaon and work in Delhi, which was the initial plan of the Delhi authorities. Like NOIDA– a planned satellite city in the east of Delhi, the land grabbed and then populated by force under the state of emergency 1976– Gurgaon was supposed to relieve the Delhi inner-city area. Actually in many cases it is Delhi which has become the dormitory town of Gurgaon; tens of thousands of call centre workers are driven to Delhi to sleep and are fetched from there for their night-shift in Gurgaon. With the extension of roadwork (mainly the NH-8 highway towards the Rajasthan border), the villages in the surrounding areas are affected by land acquisition and by further settlement of industries. From the industrial capital, the stock-market, and international investors, e.g., from Dubai and Singapore, over-liquide capital flows into the area and coagulates in concrete and glass. Developers plan one shopping mall after the other, one office tower higher than the next, whole private cities are in the making. If we believe Marxist architects who say that the rapid increase of sky-scraping buildings are the main indicator for an impending economic crash, than we better take cover or prepare ourselves for the social convulsions.
Before having a look at statistics and price developments, here is a short scene about a result of urbanisation. The thirty people living in tents next to the famous Sahara Shopping Mall, Gurgaon, right in front the Vipul Agora building, belong to one family; originally they are from Rajasthan. They have lived on this piece of land for twenty years, they have goats and chickens, they do skilled blacksmith and other artisanal metal work. When MG Road in front of their tents was developed and the construction of the Sahara shopping mall began, life started to become more stressful, too much noise, too many people, and the fear that they would have to move on. Despite years of living on this ground they had no legal status. Some members started to work on nearby construction sites, others started to sell things on the increasingly busy street. Their original skills are rarely needed when malls and office blocks are built. A huge construction site emerged right behind their tents, first planned as the new call centre for US-company Dell, then taken over by Dubai-based Vipul Agora. The Vipul Agora office building is still empty and the security guards tell you that the owner has difficulties attracting new companies after Dell pulled out. The construction of a second road forced them to move their tents to a 90 sqm small plot, which is further diminished by gardening work for the mall. Half of the family already moved somewhere else in winter 2006/2007. Sometimes the police come and hassle them, but the land-owner promised that they can stay as long as there is work to do. Some women and men do excavation work next to the shopping mall; when you ask them about payment, they quote the land-owner and shrug their shoulders…
First short glimpse on the matter:
a) Population Development of Gurgaon
b) Public-Private Partnership of Land Grab
c) Disjointed Urbanisation
d) Currently-Planned Urban Projects
e) Real Estate and Land Price Bubble
a) Population Development
Between 1945 and 2001 Gurgaon’s population grew by about eleven times to 1,660,000 people; this figure comes from the 2001 census. The population growth is mainly due to work migration, partly also due to administrative changes during the time, e.g.,, by counting more of the surrounding villages as part of the District Gurgaon. The state-issued Master Plan for Gurgaon-Manesar estimated a further eight to ten percent annual population growth. Critical voices say that the actual annual growth was 20 percent during recent years and that therefore the Master Plan has major shortcomings. An environmental study commissioned by the state government in July-August 2006 stated that the maximum population (in terms of water supply, etc.) that Gurgaon area could carry was 2,600,000 people. If the current growth rate is sustained then by the end of the Master Plan in 2021 6,000,000 people will live in Gurgaon.
The public and basically upper-class opinion is quick with allegations of over-population. They say that there would be lack of water (for private consumption, not for the industry!), but they do not mention the fact that a posh family unit in Gurgaon Sushant Lok uses about 2,000 litres of water per day, thanks to water tanks and private pumps, while a poor family unit in Gurgaon Chakarpur might use 20 to 30 litres, and only if they manage to use it before the water runs out for the day. A mere look at Delhi City can tell us that over-population is essentially a created condition and reactionary construct, given that one quarter of Delhi’s (poor!) inhabitants are crammed together on 1.5 percent of the total Delhi land. The question will be how those in power manage to control these pent-up masses. The plans to resettle them in town-ships like Noida during the State of Emergency, or to relocate them together with the industries during the industrial closure campaigns in the early 2000s, seem to have failed. When it comes to control, it comes to policing and this seems to be a problem in Gurgaon, at least for the middle-class inhabitants worrying about increasing burglary and car theft. A newspaper article in March 2007 states that there is only one policeman per thousand people on an average in Gurgaon. This ratio is far lower than the average ratio of policemen per people in the country; on average, there is a ratio of 1:800 in India. The article did not mention the vast army of outsourced policemen (see report from Group4 security guard in this issue).
b) Public-Private Partnership of Land Grab
The crisis of agriculture and village life is the driving force behind urbanisation. People sell or leave the land mainly because agricultural production under the existing market conditions equals debts equals malnutrition. The government of Haryana massively cut government jobs in the 1990s, which had allowed a lot of small farmers in the semi-rural villages around Delhi to have a regular income and to keep their farming activities at the same time. In the Haryana villages since the end of the 90s the Special Employment Schemes for the rural poor were reduced, while non-agricultural employment opportunities did not increase, both tendencies forcing more people to look for jobs outside the village. Official reason for the decrease in the special employment schemes given by the governmental Planning Commission: “… more and more outside [migrants from other states] labour is getting benefit of the Special employment schemes, operated more and more through contractors”. (source: Study on growth of rural non-farm employment for selected district of Haryana, Final Report by the Planning Commission, March 2002). The Rural Employment Schemes are in most cases paper tigers; officially they are supposed to guarantee 100 days of paid work per year for the rural poor. These poor people are then for example used to do road works, literally breaking rocks, or street sweeping, for 500 to 1,000 Rs per month. The young men sweeping the street in front of the Sahara Shopping Mall in Gurgaon work eight hours daily and receive 500 Rs per month. “At least the boss sits far away in his office in Delhi,” they say. The fact that the state does not make more use of these schemes, despite the low wages they pay, might tell us something about the general wage level and employment opportunities of the rural working poor. Contractors often pay their workers even less for public road works.
While state policies aggravate the land flight, it also re-adjusts the legal framework of the acquisition and industrialisation of the left-behind land. In Gurgaon the legal frame-work for a kind of united public-private development front was forged in 1975. The Haryana Urban Development Authority (HUDA) was set up and the Haryana Development and Regulation of Urban Area law was passed, which allowed private companies to acquire land. One hundred acres (45 hectares) of contiguous land has to be assembled in order to get permission for residential buildings. The public-private framework formed the legal starting point for the later real estate boom.
HUDA generates its income mainly from the sale of plots, auction of commercial sites and buildings, rent, fees and fines on unauthorised construction/unauthorised occupants, interest on bank deposits, and loans from State Government and the NCR Planning Board. As everywhere there are many minor scandals about how HUDA operates; e.g., an Audit Report (Civil) for the year ending 31 March 2005 says that HUDA sold land reserved as forest areas, that some million Rupees got siphoned off, that there was a lack of internal control over the land acquisition process, etc. It concludes: “All these deficiencies are indicative of ineffective management in development of urban estates.”
For the private land acquisition it is important to get local respected persons involved as brokers, as middlemen between the private developers and the farmers. As soon as money pours in all kind of cracks appear in the village, already existing divisions might widen, new alliances are formed. Some end up as newly-rich, others pelt stones at the bulldozers of developers (see the report on SEZ in newsletter no.2), others just move on. A short extraction from the text “Unruly Urbanisation of Delhi’s Fringe” by Bentinck (2000) gives a rough overview of what a “farmer” could be, and how the “farmers’’” interests might differ a lot: “[Apart from big and small land owning farmers] there is a group of farmers who do not own the land they cultivate [in Haryana villages they account for 50 to 75 percent of the population]. Most of them are migrants who lease-in land from local landowners. Lease contracts are usually arranged on a yearly basis. Nowadays, most leases stipulate monetary compensation (the leaseholder pays a fixed amount to the owner). In a minority of cases, the land is cultivated on a more traditional ‘sharecropping’ basis, whereby the landowner and the cultivator share the cost of the inputs and the revenues from the harvest. This form is chosen when the leaseholder is poor and cannot raise the funds to pay the amount for lease and inputs beforehand. An increasingly common form of agricultural contract is lease by the so-called ‘suitcase farmers’. Suitcase farmers are outsiders with sufficient resources to lease land at various places, to hire workers, and to market the crops themselves. They specialise in high-value seasonal crops such as vegetables and flowers and are highly mobile. Landless labourers are numerous. They work on other people’s land for wages or on the basis of piecework. Most of the agricultural labourers are highly mobile seasonal migrant workers, and they do not necessarily come back to the same village each time”.
Given the property relations in the villages we can say that the influx of money will even further deepen the class division. For the few big landowners the compensation will actually be a starting capital in order to become urban capitalists while many others will consume the compensation for their plot of land in the process of shifting places and jobs. The majority of the villagers will not get compensated, because they do not own land anyway. The private-public partnership to get hold of the land works by creating money dreams and nightmares of forced displacement. During the five year period after the legal framework allowed private land acquisition, DLF, a private developer, grabbed 225 hectares of village land while HUDA managed to get ‘only’ 150 hectares through compulsory land acquisition. Basically there is no competition going on, the numbers just show that there is money available on one side and that the force of money/scarcity is brutal enough so that further state-sanctioned measures are merely necessary as a threat in the background of the deal.
c) Disjointed Urbanisation
In the Gurgaon area the rapid urbanisation results in a disjointed landscape, a cities’ ripped back-side:
leftovers of older rural villages – next to wasteland – next to gated and double-locked high-rising residential estates – people grassing their cattle on land whose price sky-rockets under their feet – a new road in the middle of nowhere connecting an IT park and a block of upper-class detached houses – slum huts of 300 building workers next to a shopping mall construction site – a huge waste dump next to a Dubai-style office building – an expressway cutting the older village in half – rubble of demolished shops and huts behind Delhi Metro signs – a well-designed industrial zone without space allocated for workers’ houses – more slum huts… a battlefield of a city in the making.
No wonder that apart from critical voices about the actual process of HUDA’s and private developers’ land acquisition there is also a critique of the impact of the public-private relationship for the town’s development. Souro Joardar quoted from “Development Mechanism in Spatial Integration, Congress 2006″, about the development policy in Gurgaon:
“Private developers have built their respective residential colonies at locations where they could assemble land from the market through negotiations with local landowners and these do not necessarily match with the phases of development of the city according to the master plan. The HUDA usually has been notifying areas (for land assembly) contiguous with the existing built-up areas of the city; whereas, most private developers have assembled the cheaper lands available closer to the fringes, near the limits of the future urbanisable area of the master plan. Thus there has been sharp leap-frogging of development with vast patches of undeveloped land lying in-between private colonies and the rest of the developed city whereby the connectivity of many colonies by major arterials carrying also the utility trunk lines are often delayed. Also, the disjointed spatial pattern gets multiplied when many private developers assemble and develop lands at different locations at different points of time. Another major difference between the areas under the private developers and those under the HUDA is the absence of encroachments by slum squatters and unauthorized developments in the former due to the greater control over their acquired lands as well as the faster developments thereon whereas these encroachments have been significant across the undeveloped acquired lands of the HUDA”.
Leon Krier, urban planner and representative of bourgeois architecture and aesthetics puts it more bluntly while visiting Gurgaon for the International Network of Traditional Building, Architecture & Urbanism (INTBAU):
Question: “Part of the conference included a field trip to Gurgaon. What did you think of that?”
Leon Krier: “It’s horrific. Something which should have never been allowed to happen, … happened here. It’s the worst kind of town planning. It’s vulgar, anti-culture. What struck me the most was this green lipstick type sky scraper, surrounded by shanties. Maybe that’s a symbol of times to come”.
By the way, if you want to see the green lipstick besieged by the poor, have a look at the makeshift multi-media section on our anti-cultural web-site…
d) Currently-Planned Projects
So what is all the land taken for? Below is just a short and incomplete list of current major building projects in the Gurgaon area, already in the making or planned as of March 2007. Of course, given the speculative character of the sector things have to be read with the appropriate speculative approach:
- India’s largest private-sector entity, Reliance Industries Ltd, and the Haryana government signed an agreement establishing India’s single largest multi-product SEZ (25,000 hectares), involving an investment of nearly $9 billion.
- DLF wants to set up a SEZ of 5,000 hectares, Omaxe wants one of the same size
- New Delhi-based real estate builder DLF and Nakheel, a large property developer from the UAE, signed a 50:50 joint venture for two integrated townships spread across 40,000 acres in India with an initial investment of $10 billion. The city in Gurgaon will be three times as large as New York’s Manhattan Island, DLF said.
- Gurgaon is set to get the biggest mall in the world — a large property that is being developed by DLF Universal.
- Gurgaon will have the world’s tallest skyscrapers. It will be situated in the Golden Triangle City Centre in Sector 29 with the four tallest buildings in the world by 2010.
- Omaxe wants to set-up a wedding mall and a drive-in mall in Gurgaon
- End of March 2007, the Haryana Urban Development Authority sold a 2-hectare plot for a five-star hotel in Sector 47, Gurgaon, for $57.5 million.
- The Metro (subway trains) extension from Delhi to Gurgaon requires the destruction of allegedly illegally-built shops and slums
- There is further extension of the NH-8 highway linking Delhi, Gurgaon, and Manesar towards Rajasthan.
- Gateway Rail Freight Pvt. Ltd. plans to construct and operate a Rail-Linked Container Terminal at Garhi Harsaru near Gurgaon
- Over 2,000 acres of land acquired: ten British institutions have expressed interest in setting up campuses on information technology, pharmaceuticals, environmental technology, biotech, nanotech, new materials and alternative energy sources, among others.
To this add various other malls, office buildings and upper-class housing estates. The major “local” players of real estate development are Reliance Ltd., Omaxe, Vipul, DLF, and Unitech. Other major sources of funding come from the Middle East and Southeast Asia. Emaar Properties (Dubai), IJM Corp (Malaysia), Lee Kim Tah Holding (Singapore) and Salim Group (Indonesia). It would be interesting to recapitulate the origins of the big financial crisis in Indonesia, Japan, Singapore, Malaysia, and other Asian states in 1997, when the international bubble of real estate capital caused the over-heated ‘local’ economies to collapse.
e) Land Price and Real Estate Bubble
With the announcement of the major projects like the SEZ and the extension of the National Highway and others, the land prices in the affected areas increased. Property dealers say there has been almost a 400% increase in the land price during the last six months of 2006. The price is around Rs 3-4 crore per acre nowadays. All major developers including DLF, MGF, Unitech and Ansals have bought land, foreseeing increase in the demand for residential properties. The easy money has created a neo-rich class amongst the older land-owning class. “Bhiwadi’s Inder Lal, for example, sold off his 47-hectare land for Rs 2.18 crore recently. And attracted by the projections in the area, Lal, a farmer with an extended family of ten, has already begun investing most of the money back to where it came from: he is buying more land in the hope that the future would get him an even better deal”.
With the extension of the National Highway the industries and their demand for land travelled further south. A couple of years ago land rates in Kundli were Rs 25-40 lakh per acre. Today, they touch Rs 2-3 crore per acre, depending on the location. A little further down in Bahadurgarh, the rates have increased from Rs 13-18 lakh per acre to Rs 50- 90 lakh per acre. In Manesar, they have shot up from Rs 20-25 lakh per acre to Rs 1.10-1.40 crore per acre. The rise is courtesy the proposed 135-km, 6-lane Kundli-Manesar-Palwal expressway. And once it becomes fully functional by July 2009, rates are expected to further double from what they are today.
Land property is theft and it attracts other criminals. In an article dating 12th of April, a land-owning lady from Gurgaon reported that her husband was put under pressure by the local mafia. “The entire drama began when Mrs. Sita Devi, whose husband is joint owner of the 60-65 acres of prime land in village Narungpur, which is now part of the National Capital Region (NCR), lodged a complaint with the Manesar police on 15 February. In her complaint, she alleged that some members of the family, including her husband, were kidnapped by land grabbers, who forced them to sell their land worth crores for peanuts”.
Real Estate Prices
The increasing land prices transform into rising real estate prices and rents. According to figures from Cushman and Wakefied, NCR residential rates have seen growth with Gurgaon apartment rentals rising 105% in 2006. Office rates have also seen a marked rise with prime rentals rising 98% and their capital values rising 156%. In 2005 and 2006 the building boom increased and shopping malls, residential estates and offices space were built rather speculatively, thriving off willing investors. The main capital nowadays comes from the ‘alternative investment market’ (e.g., corporations or funds, foreign investors). In an interview from 16th of February 2007, the boss of Raheja Developers explains this by the fact that the Reserve Bank of India has imposed restrictions on the sector, being afraid of over-heating. The developers bypass the RBI by borrowing money from the ‘alternative investment market’. Many of the projects which were planned during the sharp increase of prices are still under construction; the future will show if a) there will be enough need for retail and office space and b) they will yield rents which return the high investments made during the recent price boom.
Amit Bagaria, Chairman & CEO, AsiaPac Group, says, “In Gurgaon, the late investors into the malls have burnt their fingers. So if you ask investors to invest in Gurgaon today they are sceptical.” They might be sceptical, but given the fact that they are forced to invest their capital and given the restricted investment opportunities in other sectors they might have to continue feeding the bubble.
It looks like Reliance Ltd. and the SEZ developers might meet more problems in Gurgaon than they expected. This is due to: a) resistance from farmers in the area and b) some current changes in the legal framework which are intended to prevent future trouble.
a) After having pelted police and developers with stones (see newsletter no.2), “Farmers from five villages in Gurgaon unanimously decided on 1st of April 2007 that they would not let the Reliance Industries acquire 1,395 acres of land which they have already sold to the Haryana State Industrial and Infrastructure Corporation (HSIIDC) for ‘public purpose’,” newspaper articles on the 3rd of April 2007 reported. They warned the government of creating another Nandigram-like situation if it goes ahead with the plan on the special economic zone (SEZ). The farmers from Khandsa, Narsinghpur, Mohammedpur, Garouli and Harsaru villages took this decision at a panchayat (see glossary) held at Garouli village: “We had given the land to HSIIDC since it was acquired for public purpose. However, we now realise that the government has snatched everything from more than 10,000 families to help only one industrial house,” said Rao Srikrishan, a farmer from Harsaru. One of the farmers at the panchayat also said that the government’s argument that the land already acquired is not fertile is misleading. “We have got compensation for tubewells and well falling in those patches. This clearly shows that the land is fertile,” he added. Another farmer said that the state government could never dare to take any step, if villages across the region stood united: “This is the largest acquisition of land in Gurgaon-Manesar region for SEZ. Government has played a cruel joke on us by getting the land acquired by the HSIIDC,”. “When farmers these days are getting crores for selling similar piece of land in the same region, how could the government expect us to sit idle after getting only Rs 20.75 lakh as compensation?” asked another villager’. The newspaper article says nothing about the size of land these farmers own, so the category “farmer” is rather blunt.
The resistance of the Gurgaon farmers might be a bargaining move of land-owners, rather than a movement against the SEZ, but at least Reliance Ltd. and the state will not get away cheaply. The peasants seem to know what they can demand and they know that the government will be rather soft-handed after the violence in Nandigram.
On the 16th April 2006 the Hindustan Times reports that 1,000 people from 24 villages assembled in Garoli village, opposing the move of HSIIDC to acquire 6,000 acres of land along the KMP Expressway for industrial developments. The industrial area’s name will be ‘Global Corridor’. The president of the Kisan Majdoor Krishi Bhumi Bachao Sangarsh Samiti said: “The land acquired from us would be sold to private sector players at very high rates for setting up profitable ventures. We will not let this happen. Private companies can purchase land directly from us”. According to an HSIIDC informer the compensation for land in urbanised villages has been raised from 25 lakh per acre to 35 lakh.
In an article from the Economic Times (5th April 2007) it becomes clear that one of the problems of local farmers will be to meet the formal demands when claiming not only their land property rights, but when trying to prove their own formal existence as dwellers:
‘”HSIDC has imposed Sec 4 (intention to acquire) in an area near IMT Manesar, which it claims is vacant. However, this has been contested by the local organisation — Kamal Farm Owners’ Association. It appears that no one has actually surveyed the area and the master plan has been drawn based on inaccurate facts such as patwari’s old records. Many families have inhabited this area in the last 10-odd years, and we have apprised the concerned authorities of the ground situation,” the association’s president PK Saxena said. In fact, there are many loopholes when patwaris update regulators such as the district revenue officer and the town & country planner with development records at the grassroots. In the process such patwaris become centres of power which leads to easy corruption. “For a common man in rural areas, it’s absolutely impossible to get construction activities entered into government records, without paying a hefty sum of money to these patwaris,” Mr Saxena said’.
More bribing and pressure on farmers in the area is caused by another feature of borderless capitalism, global climate change. Local farmers are angry about how the government used the recent hailstorms to put them under additional pressures. A newspaper-article from 20th March says that: ”a lot of farmers in Gurgaon are angry with official registrars, because they underestimated the damage done to the land by recent hailstorms and they accused them of taking bribes. The registrars called for a strike against the accusations.”
b) Confusingly enough DLF and Omaxe reported on 6th April that both developers want to set up SEZs in Gurgaon, each more than 5,000 hectares; at the same time the article reports that the new SEZ act prohibits SEZ areas owned by one developer bigger than 5,000 hectares. The article says:
“Faced with the new rule on special economic zone that limit the maximum area to 5,000 hectares, India’s largest real estate player DLF may split its proposed mega zone in Haryana into two tax free enclaves in the region. All SEZ proposals for which states acquired or allotted land after February 10, 2006, when the SEZ Act was notified, will have to be redone, according to official sources.” “We have just started the process of acquiring the land. Now, there will be one SEZ of 5,000 hectare but if we get more land, we may set up another SEZ of 3,000 hectare in Gurgaon,” a senior company official said. Another real estate firm Omaxe, which planned an SEZ on over 6,000 hectares would also ‘go back to the drawing board’ to chalk out the new strategies’.
If the legal maximum is now fixed at 5,000 hectares, what does that mean for the Reliance Ltd.? Both the state and RIL will find a way to bypass the legal curb.
“According to sources in the Haryana government, RIL has proposed it will go ahead with land acquisition in the area. However, further acquisition will only be aimed at generating contiguity in the 10,000-odd acres the company has acquired. Then, the company may use 12,500 acres for one multi-product SEZ, and spin off its proposed container facility, food processing unit, power plant and airport into separate projects. When contacted, an RIL spokesperson declined to comment. As per RIL’s original MoU with the Haryana government, the company was to buy 17,500 acres directly from farmers, and the state was to give the remaining 7,500 acres.” (12th April, Source?).
One problem for RIL seems to be that the airport project would then not be under the tax-free SEZ.
Maybe the upcoming government-sponsored management think-tank will solve the problem: “The government is finalising plans to set up an Indian Institute of Corporate Affairs—a think tank and academic institution—on the lines of the IIMs for issues relating to corporate affairs”. The newspaper article from 9th April Source? said that the institute is likely to be located at Manesar, near Gurgaon, and its construction will start by year-end.
On the web-site (www.gurgaonworkersnews.wordpress.com) you can find some news items on the following multi-national companies in Gurgaon area, just click on “List of Companies.” The list is boring in a general sense and it smells like shareholders oi-stress sweat, but it might possibly be useful once shit hits the fan or a picket the factory gate. For a longer list of companies situated in Gurgaon have a look at the web-site as well.
News items this month on:
Aksh Optifibre Limited
Didi World of Fashion
Eastern Medikit Ltd.
Mercury Press San Jose
4) About the Project -
*** Shanty Pictures and Workers’ Film Documentaries Requested -
We proudly present a new Make-Shift Multi-Media Section on the Web-Site. If you find that the report lack graphicness, please have a look at the photos documenting Gurgaons convoluting landscape. We will try to deliver two or three wonky pictures per week, some snap-shots of Gurgaon workers’ reality. For the archive of a local workers’ resource centre project we urgently look for workers’ film documentaries (in english or with english subtitles) from other places around the world. Please contact us if you have material to share!
Lakh (see Crore)
Wages and Prices
Workers hired through contractors
The All India Trade Union Congress (AITUC) is the oldest trade union federation in India and one of the five largest. It was founded in 1919 and until 1945, when unions became organised on party lines, it was the central trade union organisation in India. Since then it has been affiliated with the Communist Party of India.
Centre of Indian Trade Unions, a national central trade union federation in India. Politically attached to CPI(M), Communist Party of India (Marxist). Founded in 1970, membership of 2.8 million.
Workers hired by the company for a limited period of time.
Workers hired for a specific performance, paid for the performance.
1 Crore = 10,000,000
1 Lakh = 100,000
DA (Dearness Allowance):
An inflation compensation. Each three to six months the state government checks the general price development and accordingly pays an allowance on top of wages.
Deputy Commissioner, Head of the District Administration.
ESI (Employee’s State Insurance):
Introduced in 1948, meant to secure employee in case of illness, long-term sickness, industrial accidents and to provide medical facilities (ESI Hospitals) to insured people. Officially the law is applicable to factories employing 10 or more people. Employers have to contribute 4.75 percent of the wage paid to the worker, the employee 1.75 percent of their wage. Officially casual workers or workers hired through contractors who work in the factory (even if it is for construction, maintenance or cleaning work on the premises) are entitled to ESI, as well. Self-employment is often used to undermine ESI payment.
1 US-Dollar = 43 Rs (March 2007)
1 Euro = 57 Rs (March 2007)
Haryana State Industrial and Infrastructure Development Corporation
Official minimum wage in Haryana in March 2007 is about 2,500 Rs per month for an unskilled worker, based on an 8 hour day and 4 days off per month.
A locally elected village administrative body in charge of village-level issues.
PF (Employee’s Provident Fund):
Introduced in 1952, meant to provide a pension to workers. Officially applicable to all companies employing more than 20 people. Official retirement age is 58 years. Given that most of the casual workers belong to the regular workforce of a factory, they are entitled to the Provident Fund, as well. So are workers employed by contractors. If workers receive neither PF nor ESI they also do not show up in the official documents, meaning that officially they do not exist.
Superintendent of Police, Head of the District Police.
In India staff includes managers, supervisors, security personnel and white-collar workers.
In general trainees work as normal production workers, they might have a six month up to two-year contract. Depending on the company they are promised permanent employment after passing the trainee period. Their wages are often only slightly higher than those of workers hired through contractors.
VRS (Voluntary Retirement Scheme):
Often a rather involuntary scheme to get rid of permanent workers. Particularly the VRS at Maruti in Gurgaon made this clear, when 35 year olds were sent in early retirement.
Wages and Prices:
When we hear that a cleaner in a call centre in Gurgaon, an industrial worker in Faridabad or a rikshaw-Driver in Delhi earns 2,000 Rs for a 70 hour week, which is about the average normal worker’s wage, we have to bear in mind that they often came from West Bengal, Bihar or other remote place in order to get this job. In order to put 2,000 Rs into a daily context here are some prices of goods and services:
- Monthly rent for a small room in Gurgaon (without kitchen), toilet and bathroom shared by five families: 1,300 Rs
- Monthly rent for a small room in a new building in central Gurgaon, single toilet and bathroom: 4,500 Rs
- Half a kilo red lentils on the local market: 25 Rs
- Kilo rice on local market: 14 Rs
- 1 Kilo Onions and 1 Kilo carrots on local market: 25 to 30 Rs
- McChicken: 40 Rs
- Bus ticket to nearest bigger bus stop in South Delhi: 14 Rs
- Daily Newspaper: 3 Rs
- One hour internet in a cafe: 20 Rs
- Cinema (new) ticket Saturday night: 160 Rs
- single entry for swimming pool: 100 Rs
- Starbucks Coffee (Latte Medium) in Shopping Mall: 59 Rs
- Faulty shirt on Faridabad local market: 40 Rs
- Single gas cooker plus new 2 litre gas cylinder: 720 Rs
- Re-fill gas (2 litres – once every month and a half): 100Rs
- Second-hand bicycle: 600 to 1,000 Rs
- Two simple steel pots: 250 Rs
- One litre Diesel: 30 Rs
- Start package pre-paid mobile phone (without the phone) 300 Rs
- Phone call to other mobile phones: 1 Rs
- minimum dowry poor workers have to pay
for the marriage of their daughter: 30,000 Rs (80,000 Rs more likely)
- One month mobile phone flat rate: 1,500 Rs
- Compaq Laptop: 50,000 Rs
- Flight Delhi to London: 28,000 Rs
- cheapest Hero Honda motor-bike (150 cc): around 40,000 Rs
- Ford Fiesta: 587,000 Rs
- four hours on Gurgaon golf course: 800 Rs (info from golf course worker earning 2,400 Rs monthly)
- Two-Bedroom Apartment in Gurgaon: 3,000,000 to 5,000,000 Rs
Workers hired through contractors
Similar to temporary workers, meaning that they work (often for long periods) in one company but are officially employed by a contractor from whom they also receive their wages. Are supposed to be made permanent after 240 days of continuous employment in the company, according to the law. A lot of companies only have a licence for employing workers in auxiliary departments, such as canteen or cleaning. Companies usually find ways to get around these legal restrictions, e.g., workers services are terminated on the 239th day to avoid workers reaching eligibility criteria to become permanent. In many industries contract workers account for 60 to 80 per cent of the work force, their wage is 1/4 to 1/6 of the permanents’ wage.