Gurgaon Workers News – Newsletter 13 (October 2008)
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 a 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; on the outskirts of Gurgaon, Asia’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 know more about working and struggling in Gurgaon, if you want more info about or even contribute to this project, please do so via:
In the October issue you can find:
1) Proletarian Experiences –
Daily life stories and reports from a workers’ perspective
*** Gated Communities and Repressive Social Paranoia
With the increasing spatial concentration of wealth and misery, of upward opportunities and downward spirals, those who feel privileged tend to feel threatened. In that way Gurgaon is a landscape of mass-psychosis. The faceless dominance of exploitation – the assembly line, the export markets and real estate shares – have to congeal in physical people: the managing middle-classes, which are forced to live too close to the impoverished cogs of the game. Some notes on the consequent urban armament: gated communities, increased repression in the local prisons, more CCTV, more police…
*** Ten Construction Workers Die after Accident in Gurgaon
The main driving force and victims of the construction boom are the construction workers themselves. In times of credit crunches real estate developers and construction companies try to squeeze margins and cut corners. In September this resulted in the death of ten construction workers in Gurgaon, ten workers deaths that we heard about that is.
*** Short Report from Orient Fan / Wal-Mart Worker
The factory is situated in Faridabad, Sector 6, Plot 11. When a representative of Wal-Mart visits the factory, all workers hired through contractors are told not to come to the factory. Wal-Mart sends its reps once a year and then it’s always this very same procedure: the ‘inofficial’ workers have to turn invisible. In the last year the factory produced 200,000 fans for Wal-Mart. The shift times in the Blade department, the paint shop, the air flow and the packing department are 12 to 12 and a half hours. Published in Faridabad Majdoor Samaachaar (FMS), July 2008.
*** Yet another list of short information from workers employed at different companies in Gurgaon
Continuation of short reports of workers from Achiever Creation, Elite Medical, Radnik Export, Rolex Auto, Viva Global, gathered and published in FMS, July 2008.
2) Collective Action –
Reports on proletarian struggles in the area
*** Wildcat Sit-Down Strike at HMSI
Short news item on yet another short wildcat action by casual workers and workers hired through contractors at Honda HMSI. The green-field factory – only opened seven years ago – has already developed a tradition of unrest (see GurgaonWorkersNews No.7). Sources said about 1,500 contractual and casual workers of HMSI have gone on a sit-in protest, on 6th of September 2008. The strike was triggered when a factory supervisor slapped and manhandled a worker after a scuffle during the night shift
*** After wild-cat strike and mass-dismissals: Factory manager of automobile supplier in NOIDA got killed during workers’ unrest
Two weeks after the wildcat-strike at Honda, another wild-cat strike of workers hired through contractors employed by the automobile industry ended in a bloody mess, just around the corner. In NOIDA, a group of sacked workers killed the factory manager of an Italian automobile supplier, Graziano Transmissioni. The workers had gone on strike for higher wages, the management refused the demand and sacked 200 workers, a riot started, security guards fired, the manager was alledgedly beaten to death. It could happen anywhere at any time again: sacked workers, a replicable dead manager, and 130 detained and charged workers – 60 of them with murder – facing legal repression.
3) According to Plan –
General information on the development of the region or on certain company policies
*** The Bloody Real Estate of Crisis
On 13th of August 2008 on a protest march in NOIDA, another satellite town of Delhi, several farmers were shot dead by the police and dozens got injured. The farmers demanded higher compensation for the land which they had sold to a public development authority some years ago. If the protests in NOIDA and the demands for higher compensations are the rock of the current crisis of the real estate sector then the rising interest rates, the rising prices for construction material and the recession of the US economy is its hard place. The current drop in real estate prices and of the shares of private developers like Gurgaon based DLF – the biggest in India – is more than a mere adjustment in the market swing of supply and demand. The situation of the sector can be described as a blocked pressure valve of the wider economy. The rising inflation of proletarian goods increased the pressure from below: workers particularly in the urban industries are getting restless. In this blocked and intertwined situation those in power are aware and afraid of any possible trigger effects, tipping points, chain reactions – and be it a small protest of farmers in a suburb of Delhi. A glimpse on the current crisis…
*** Hells Bells – Glimpses on Current Trends in Gurgaon’s Call Centre Sector
In August 2008 the newspapers announced the lay-offs of hundreds of call centre workers, many of them in Gurgaon. The reasons given for the job cuts are the recession in the US and the high costs for office rents. We summarised some news on the sector. We start with an article reporting on the attempt of the regional BPO industry to counteract the tendency of workers changing jobs too quickly – by setting up a sector-wide ‘investigation company’ which is supposed to provide a kind of ‘black list’ of the worst job hoppers. The second article was published in April 2008 and describes a potentially booming new trend from the US: cutting costs of private debt collection by outsourcing it. Following a summary of articles on various job cuts at major call centre companies in Gurgaon. We finish with two short notes, one concerning the many road deaths in Delhi-Gurgaon caused by speeding call centre cabs – a result of the enormously long working hours and time pressure which is put on the drivers. The last note is on the effect of call centre work on gender relations and the emergence of a kind of call centre workers caste.
*** Energy Crunch and Destructive Forces in Gurgaon
Machines have to run 24 hours a day in order to suck up enough of human energy for profitable consumption, but the frequent power cuts pose a serious problem to the local industry. Maruti runs its own power-plant and in the way most of the factories and call centres in the industrial belt around Delhi do: burning fossil fuels in their generators. About 350,000,000 litre of diesel are consumed each year by these industrial units. The rising price of diesel hits hard. Nearly Rs 14,000,000,000 per annum is spent on diesel for running gensets by about 40,000 industrial units in Faridabad, Gurgaon, NOIDA. This sum amounts to an annual wage sum of about 430,000 workers. The machine has to keep on running, energy is turned into destruction of human health and environment – and into business, e.g. by carbon emission trading. For good reasons the Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ) GmbH ‚ (German Technical Cooperation), opened their carbon emission trading office for India right in the centre of the polluting money-machine – in Gurgaon.
4) About the Project –
Updates on Gurgaon Workers News
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 –
Daily life stories and reports from a workers’ perspective
With the increasing spatial concentration of wealth and misery, of upward opportunities and downward spirals, those who feel privileged tend to feel threatened. In that way Gurgaon is a landscape of mass-psychosis. To rickshaw-drive your dog to dinner in a dog’s restaurant where you spend the weekly wage of the rickshaw driver’s family on your dog’s aperitif might cause feelings of socio-phobia. And also to be driven back to an apartment which costs 2,000 years of the driver’s wage. There’s evidence and reason. In front of most upper-class houses in Sushant Lok or DLF City you will find private security workers day and particularly at night. Gates close behind you when you leave home, gates close when you enter your air-conditioned work-space. Airport-like security checks when you enter shopping malls after work to have your coffee, police presence on the way back home at the NH8 highway toll-point. The faceless dominance of exploitation – the assembly line, the export markets and real estate shares – have to congeal in physical people: the managing middle-classes, which are forced to live too close to the impoverished cogs of the game. Those who are privileged suffer; those who are privileged are afraid and have the means to defend themselves. The blunt answer is physical, e.g. regular police raids of the ‘illegal slums’ and deadly neglect within the prison system; some steps are helplessly preventive, e.g. 500 new CCTV cameras in town; some outcomes of the closeness are inevitable, e.g. the increase of poverty related illnesses which spread to the areas of plenty. Some short notes on the matter.
Inside Gate, India’s Good Life; Outside, the Servants’ Slums
“GURGAON, India – When the scorch of summer hit this north Indian boomtown, and the municipal water supply worked only a few hours each day, inside a high-rise tower called Hamilton Court, Jaya Chand could turn on her kitchen tap around the clock, and water would gush out. The same was true when the electricity went out in the city, which it did on average for 12 hours a day, something that once prompted residents elsewhere in Gurgaon to storm the local power office. All the while, the Chands’ flat screen television glowed, the air-conditioners hummed, and the elevators cruised up and down Hamilton Court’s 25 floors. India has always had its upper classes, as well as legions of the world’s very poor. But today a landscape dotted with Hamilton Courts, pressed up against the slums that serve them, has underscored more than ever the stark gulf between those worlds. The slum is as much a product of the new India as Hamilton Court, the opportunities of this new city drawing hundreds of thousands from the hungry hinterlands. “Women and children are not encouraged to go outside,” said Madan Mohan Bhalla, president of the Hamilton Court Resident Welfare Association. “If they want to have a walk, they can walk inside. It’s a different world outside the gate.” Some 600 domestic staff members work at Hamilton Court, an average of 2.26 per apartment. The building employs its own plumbers and electricians. At any one time, 22 security guards and 32 surveillance cameras are at work. “We can’t rely on the police,” Mr. Bhalla said. Gurgaon has one policeman for every 1,000 residents – lower than the national average – and a surfeit of what Mr. Bhalla calls official apathy. “We have to save ourselves,” he said. The guards at the gate are instructed not to let nannies take children outside, and men delivering pizza or okra are allowed in only with permission. Once, Mr. Bhalla recalled proudly, a servant caught spitting on the lawn was beaten up by the building staff. Recently, Mr. Bhalla’s association cut a path from the main gate to the private club next door, so residents no longer have to share the public sidewalk with servants and the occasional cow. The Gurgaon police chief, Mohinder Lal, said the city’s new residents had unrealistic expectations of the Indian police. If a police officer does not arrive quickly, Mr. Lal rued, the residents complain. “They say, ‘You’re late. Come back tomorrow.’ “He too, said that the police could not cope with the disorder of Gurgaon’s growth.”Development comes, mess comes, then police come and infrastructure”. Gurgaon’s security guards, most of whom live in slums, likewise have little love for law enforcement. They accuse the police of raiding their shanty, hauling men to the local stations and forcing them to clean and cook before releasing them back to their hovels, often without a single charge. The police say migrant workers are a source of crime.”
summary: Ruth Fremson: The New York Times, 9th of June 2008
Gated townships can induce psychological barriers
Even the local mainstream media mentions the mental consequences of social apartheid for the children of the rich:
“Gated townships: Malibu Towne in the IT hub of Gurgaon is one such. Round-the-clock security and limited access to entry make it the preferred choice of many. On an average populated by 50-150 families, mostly made up of corporatists and retired bureaucrats, some of these areas even boast of golf courses. No wonder most developers in the country are cashing in on the demand for secure and self-sustained abodes and are coming up with such townships, mostly in the outskirts of metropolitan areas, which cater largely to the high-end housing segment. However, psychologists feel these ‘private, gated cities’ are fraught with negative psychological consequences. According to Sameer Parekh, a psychologist at Max Healthcare, “Staying among a closed social group increases the sense of social segregation. Children staying in a community built with the same socio-economic class tend to become comfortable with people similar to them and less tolerant of the world outside their closed gates.”
(4th of August 2008 – Times of India)
Gurgaon may get some 500 odd TV cameras installed all over the city
“In an effort to implement an earlier order to install CCTVs in cyber cafes, the police in the city have taken some recent steps to check compliance. Gurgaon may also get some 500 odd TV cameras installed all over the city. These are steps which should help curb unsavoury activities of all kinds, provided all recordings are maintained and archived properly. The Gurgaon police arrested five cyber cafe owners this Monday for failing to install closed-circuit television cameras (CCTV) in their cafes and for not maintaining the identity records of customers. The action follows increased vigilance after the recent serial bomb blasts in Bangalore and Ahmedabad and increasing instances of terrorist outfits using cyber cafes to send e-mails, a police spokesman said. A police spokesman Monday said the cameras will be installed on national highways, roundabouts, parks, shopping malls, prominent high-rise buildings and other public places across the township.”
(29th of July 2008 – http://www.indiaenews.com)
18 inmates died without medical care in Gurgaon prison
Bhondsi jail in Gurgaon district seems to be existing in times when prisons were meant for punishment, rather than as correctional facilities. The jail is under the scanner for letting 18 inmates die without medical care during the last 33 months. A Haryana jail department investigation confirmed one death due to denial of medical care there. The probe was started after a prisoner wrote to the Chief Justice of India in May. An April 2008 report by a judge had also recorded that no doctors were available in the jail during an inspection.
(15th of July 2008 – Times of India)
The main driving force and victims of the construction boom are the construction workers themselves. In times of credit crunches (see article on real estate crisis in this newsletter) real estate developers and construction companies try to squeeze margins and cut corners. In September this resulted in the death of ten construction workers in Gurgaon, ten workers deaths that we heard about that is.
“Ten people were killed and two others were injured after a water tank that was under construction collapsed here in the National Capital Region last night. Eyewitness said that some workers were washing their utensils and others were taking a bath when the half built water storage tank came down on them. “The tank was outside, it was full of water and people drowned in it. Around 5 people died on the spot and two of us are injured,” said Jai Karan, one of the injured men. Police are investigating into the matter and have not ruled out the use of substandard material used in the making of the storage tank as the cause for its collapse. “The tank collapsed all of a sudden, maybe because of the material used, we are still investigating. But the report is that five died on the spot and five others succumbed to their injuries in the hospital, a total of ten have been killed and two are seriously injured,” said Inder Singh Seni, Deputy Commissioner of Police (DCP). The bodies of the deceased were handed over to their family members. Many chose to take the bodies to their home state of Bihar and Bengal, and only a few cremated their loved ones in Gurgaon on Saturday.”
(5th of September 2008 – ANI)
The factory is situated in Faridabad, Sector 6, Plot 11. Today a representative of Wal-Mart will visit the factory, therefore all workers hired through contractors were told not to come to the factory. Wal-Mart sends its reps once a year and then it’s always this very same procedure: the ‘inofficial’ workers have to turn invisible. In the last year the factory produced 200,000 fans for Wal-Mart.
In the Orient factory there are four types of workers – permanents, casuals, workers with a job card and workers without job cards. There are only few workers with a job card, some of them are also hired through contractors, but they are not dismissed after some months and their 18 hours of weekly over-time is paid at double rate. Everything above 18 hours is called extra-time and only paid at single rate. The permanents usually do piece work. The extra time of the casuals is paid at double rate, too. Those workers hired through contractor who haven’t got a job card are paid 90 to 130 Rs for eight hours; they don’t get ESI or PF. When they hire casuals they take 200 to 400 Rs bribe. Job cards are also only given to those with the right connections to the hierarchy – on 10th of June the union leaders made a fuss about it.
In the factory we manufacture 2.4 million fans per year. Between Mid-July and end of October there is only little work, during the rest of the year we work 100 to 175 hours over-time per month. The shift times in the Blade department, the paint shop, the air flow and the packing department are 12 to 12 and a half hours. There is also a canteen at Orient Fan factory. The permanent workers pay 50 paisa (1/5 a Rupee) for a tea and three Rs for a meal. The 450 casual workers and the workers hired through contractors pay one R for tea and six Rs for a meal.
Continuation of short reports (for more see last issues of Gurgaon Workers News). Most of the reports are from textile export factories, gathered in July and August 2008.
Achiever Creation Worker
(Plot 501, Udyog Vihar Phase III)
We have to work from 9 am till 7 pm, but for ten hours work the company pays only eight.
Elite Medical Worker
(Plot 76-77, Udyog Vihar Phase IV)
The machine shop runs on two 12 hours shifts. The helpers get 2,800 Rs, neither ESI nor PF.
Radnik Export Worker
(Plot 294, Udyog Vihar Phase II)
Inside the factory about 1,000 workers do from 9:30 am till 10:30 pm or 2 am. We do 150 hours over-time per month. If they make us work till 2 am, they give us 15 Rs extra for food. They make us sign papers which say that we get double over-time pay, actually we get single rate. The bosses abuse us verbally. There are thugs in the factory who threaten and beat us, and more thugs are called if necessary.
From the company web-site:
Supporting your deliveries are six production factories, covering a total area of 250,000 sq. feet, with a capacity to handle 500,000 garments per month. State-of-the-art machinery is used across all functions, which include over 2000 stitching machines in India and Nepal.
Clients: H&M, Mexx, Morgan Spencer,
Rolex Auto Worker
(Plot 303, Udyog Vihar Phase II)
Work start at 9 am and won’t finish before 8:30 pm, often till 2 am. They won’t even give you money for food when they make you stay till 2 am. The helpers get 2,800 Rs, but they have to sign for 3,510 Rs. The same with the welders, they sign for 4,500 Rs, but get 3,500 Rs. When an official comes for inspection the helpers have to leave the factory.
Viva Global Worker
(Plot 413, Udyog Vihar Phase III)
We work from 9:30 am till 11 pm, even till 2 am. We do 200 to 250 hours over-time per month. Money is cut for PF, but when they sack you after three or three and a half months they won’t give you the form or tell you the PF number. They threaten you, abuse you verbally.
From the Viva company web-site:
Viva Globals mainly supplies clients in the US and Europe
2) Collective Action –
Reports on proletarian struggles in the area
Short news item on yet another short wildcat action by casual workers and workers hired through contractors at Honda HMSI. The green-field factory – only opened seven years ago – has already developed a tradition of unrest (see GurgaonWorkersNews No.7).
HMSI casual workers strike, production affected.
NEW DELHI: Production at the Honda Motorcycle and Scooter India’s (HMSI) Manesar plant in Haryana has been affected partially due to a strike by contract and casual workers, who are protesting against alleged manhandling of a colleague.
Sources said about 1,500 contractual and casual workers of HMSI have gone on a sit-in protest since this morning.
The strike was triggered when a factory supervisor allegedly slapped and manhandled a worker after a scuffle during the night shift on Friday followed by another altercation this morning.
When contacted a company spokesperson said: “The dispute started with the indiscipline behaviour by a contractual worker, who then had some disagreement with the supervisor of the contractor on this issue.
“This incident mobilised 10-15 other co-workers and they stopped other contractual workers from working. Now these contractual workers are diverting the actual dispute to general demands.”
The contractor of the workers and the Labour Department of the company were trying to resolve this dispute. Efforts were on to resolve the dispute at the earliest possible, the spokesperson said.
Admitting that the production at the facility has been affected, the spokesperson, however, said the extent of impact on production could be assessed only towards the end of the day’s work.
(6th of September 2008 – The Hindu)
The system needs representatives who impersonalise its necessities: who announce that people are hired or fired, who call for worker-friendly laws or stricter police-enforced order. The system needs management and therefore managers: people who organise exploitation and are in touch with the exploited. These people are rewarded with money and dubious prestige for the alienating job they do. They spend a huge amount of money in order to create their own safe world apart from the misery around them: gated communities, security guards, private transport – see related notes in this newsletter. In times of turmoil these representatives of the system can become the well-paid target and functionalised victim of proletarian wrath. Like it happened on 22nd of September in Delhi’s industrial belt, when a group of sacked workers killed the factory manager of an Italian automobile supplier, Graziano Transmissioni. The workers had gone on strike for higher wages, the management refused the demand and sacked 200 workers, a riot started, security guards fired, the manager was beaten to death. It could happen anywhere at any time again: sacked workers, a replicable dead manager, and 130 detained and charged workers – 60 of them with murder – facing legal repression. The political wing of management does its mediating job. Union Labour Minister Oscar Fernandes:
“This should serve as a warning for the managements. It is my appeal to the managements that the workers should be dealt with compassion. There are disparities in the wages of permanent employees and contract workers. The workers should not be pushed so hard that they resort to what happened in Noida. It is a fact that the number of organised workers has been decreasing. It came down from seven per cent to six per cent. We are going to discuss the matter of hire and fire policy in the next Labour Congress. The workforce is unable to express its simmering discontent over the management policies.”
The managing community knows that they will have to lay off workers again and that they will not be able to compensate the working workers for a lost life in the factories. They know that there will be trouble in the future: for them the killing of the manager is a scary sign, a peak on the scale of social tension. A scary sign, but one that they can understand and deal with. They call for armament: more cops, more security guards in the factories and in front of their houses, stricter laws, more prisons, higher gates and fences. Workers’ struggle will have to and will find ways to undermine and subvert this already lost race for repressive security…
3) According to Plan –
General information on the development of the region or on certain company policies
On 13th of August 2008 on a protest march in NOIDA, another satellite town of Delhi, several farmers were shot dead by the police and dozens got injured. The farmers demanded higher compensation for the land which they had sold to a public development authority some years ago. The necessity to quell the protest derives less from the violence used by the farmers – they tried to storm a government building and allegedly started to throw stones at the police – than from the danger that the protest might trigger a whole chain of similar unrests. In Gurgaon there have been various farmers’ protests during the last months. In recent years hundreds of acres of farm land in Gurgaon and NOIDA have been bought to feed the real estate boom. Since then the land and real estate prices have exploded, many farmers now demand their ‘fair share’ of the gamble. If the protests in NOIDA and the demands for higher compensations are the rock of the current crisis of the real estate sector then the rising interest rates, the rising prices for construction material and the recession of the US economy is its hard place. In September 2008 the Indian government announces that Gurgaon and NOIDA, these bloody battlefield of urbanisation are the new role model for India: »The government is set to create 35 new satellite townships, on the lines of Gurgaon and Noida, on the public-private partnership (PPP)
model«. (Economic Times)
The current drop in real estate prices and of the shares of private developers like Gurgaon based DLF – the biggest in India – is more than a mere adjustment in the market swing of supply and demand. The situation of the sector can be described as a blocked pressure valve of the wider economy. The sector functioned as an entry-gate and container for global capital influx after the debt crisis of 1991: in order to attract and bind capital the state orchestrated the privatisation of the real estate sector. Companies like DLF emerged. The re-location of US IT-companies and call centres fed the boom, they account for the majority of the commercial real estate. With the first signs of a slow-down the state further liberalised the sector in 2005 and allowed ‘foreign’ capital to invest in Indian real estate. Much of the foreign investment streams from Singapore and the United Arabic Emirates, passing tax havens on the way: about 40 per cent of the total FDI in India came officially from Mauritius. Like no other place in India, DLF City in Gurgaon symbolises the real estate boom and the real estate money greased the local economy. In Gurgaon one huge construction project – apartment blocks, office towers, shopping malls, SEZs – chased the next. In 2006 first voices warning of an ‘over-supply’ could be heard. DLF, Reliance, Omaxe and others reacted by accelerating the game and by competing more fiercely for new liquidity.
In June 2007 DLF Properties raised a record $2.3 billion in its initial public offering. DLF also formed a tie-up with Dubai developer Nakheel that announces investments of $10 billion to build two townships in India, one of them in Gurgaon. In July 2007 Omaxe Developers went public in order to draw money from the stock-market. In November 2007 Emaar Properties, the world’s largest listed real estate developer, has announced a more than 12 billion dollar investment with India’s MGF Developments. In January 2008 Russian Telecom giant Sistema JSFC announced that the company had acquired huge tracts of land in Gurgaon. The total investment in real estate would be around $500 million in the coming years. In the same month Emaar MGF (Dubai) said it will go ahead with its plan to enter the capital market for raising up to Rs 7,077 crore through an initial public offer. Rs 775 crore would go into development cost of a project in Gurgaon and Rs 1,450 crore in repayments of loan.
(lakh = 100,000, crore = 10,000,000)
Things heated up and the Indian economy did, too. The influx of financial capital and the rising oil prices fuelled the inflation. The Indian state reacted by increasing the interest rates. The interest rates on home loan have gone up by 2 percentage points – to over 12 per cent in 2008. The private property market slumped. People who have bought property face difficulties due to rising interests, people who thought about buying a house are more reluctant to do so. Particularly the region around Delhi has the highest level of private property debts in India: in the average value of each loan account opened in 2005-06 NOIDA now tops the list with Rs 10.5 lakh followed by Gurgaon with Rs 10.2 lakh and Delhi with Rs 9.8 lakh. At the same time many IT and call centres in Gurgaon area announced down-sizing as a reaction to the US-recession – see article in this newsletter. This results in even more empty office space. The developers try to squeeze remaining margins, e.g. by increasing the rents in the retail sector. The picture of deserted shopping malls entered the stage. At the beginning of 2008 the DLF share price dropped below their initial selling price. Only twelve month after the biggest single share-deal in Indian history DLF announced it would buy back a chunk of its own equity ‚ “a move construed by the market as a sign of panic on the part of controlling shareholders.” Since July 2008 the warning voices have become more audible – all from July and August 2008, published in The Hindu and the Economic Times:
* “The value of residential flats in Gurgaon has dropped 40 percent during the last nine months of 2007.”
* “A senior builder said that at present, the average land cost for the construction of one sq feet comes out to be around Rs 2,000 to Rs 3,000 per sq ft in Noida and Gurgaon. He also said that in the last one year, developers and builders have not increased the prices of their products while the input cost has increased by almost 30% to 50%. Therefore, he said, his profit margin has already been squeezed”.
* “The real estate market is increasingly behaving like the stock market these days. Just like buyers on the Street are putting off their purchases in anticipation of the market falling further, a sluggish real estate market is prompting retailers to postpone expansion plans on hopes of lower rentals”.
* “Rentals may kill 50% of malls. Eight years ago, mall developers couldn’t get enough of Gurgaon. Retail rentals have doubled in the past three years, eating away on average 22-24% of retailers’ revenues. Internationally, rentals comprise 7-8% of retailer’s revenues. Srinath Sridharan, the vice-president and head of strategic alliances at Wadhawan Holdings presages far darker times. ‘You have to be optimistic to say only half of the malls becoming defunct. I feel 80% of them will not even see the light of day. Retailers today cannot afford the high rentals being demanded. It’s difficult to say if rentals are a part of sales or the other way round, he says.”
* India’s emergence as a leading IT and ITES destination has witnessed a huge demand for high quality office space. Again, the dependence on one sector could also have a serious impact. Knight Frank Vakil is clear when he says there is already a slowdown as far as commercial property is concerned. There is no demand for an outright purchase and a lot of people are going for the lease option. In a falling market, that is a more practical solution, says Vakil. IT and ITES, according to him, account for 80 % of all commercial space in India”.
* “Part of the problem is that when the market was strong, developers piled into the most expensive properties where the biggest profits were to be made. One upmarket enclave in Gurgaon, which boasts a nine-hole golf course and a ‘cigar lounge’, has sold fewer than half the houses built in the first phase of development, even though it is now more than a year since they went on sale. HSBC reports that sales in the luxury segment have fallen by up to 70% in Gurgaon.
* “This has pushed up interest rates and turned property companies into the biggest corporate losers of India’s slowing economy. They have been kicked from several sides. Homebuyers are put off by expensive or elusive credit; banks are rationing credit to developers; prices of building materials like cement and steel have soared. The share prices of property firms are down by 40-70% from their highs earlier this year.”
* In late September 2008 DLF announces the lay-off of 300 office workers across all its centres and subsidiaries “as it decides to slow down its project execution, especially in tier II cities, in the face of shrinking demand and expensive borrowing”.
* With the crisis kicking in the state helps to concentrate and clean the market, e.g. by minimising the numbers of real estate dealers: “With Gurgaon becoming the hub of corporate India, property is one of its most thriving sectors. According to unofficial estimates, 10,000 brokers are dotted around the 2,600 sq km that is Gurgaon. It might well be the Indian city with the highest number of brokers per sq km. This may be about to change because the Haryana Assembly last week passed a law to regulate the burgeoning but unregulated property business. Estate agents will now need a licence from the Haryana Urban Development Association.” (14th of September 2008 – Times of India)
The picture of the real estate sector being the blocked pressure valve of the wider economy is symbolised by DLF’s move of raising enormous amounts of share capital and of having to buy them back shortly afterwards. The policies of the state mirror this ‘reactive panic’, too. The state first had to encourage the capital influx by liberalisation; it now had to increase the interest rates due to over-heating. The higher interest rates accelerates the crisis in certain sectors, the state now has to further increase the diameter of the valve: the Indian government currently plans to follow other Asian countries in creating a market for real estate investment trusts (REITs). “The move would encourage foreign property funds, which are keen to join India’s construction boom but are not allowed to own finished buildings. However, REITs have not been immune from global stock market turmoil; with Singapore’s REIT index for example, dropping 20 percent in the second half of last year (2007) and a further 13 percent so far this year, in line with the broader market”.
The crisis of the real estate sector is closely linked to other sectors, e.g. Reliance is not only one of the biggest private real estate developers, the major developer of Gurgaon’s SEZ, but also big in retail, chemical industries and the energy sector. The increased interest rates will have a direct effect on, e.g. the developing car industries. Outstanding credit for the purchase of cars and two-wheelers has risen from Rs 460.2 billion in 2002-03 to Rs 1.09 trillion in 2006-07; 89 per cent of the new cars sold in 2006-07 were bought with credit, with loans covering 79 per cent of the value of the purchase. Automobile sales growth halved in the first ten months of 2007-08 over the corresponding period of the previous year. On 15th of September the Economic Times published an article concerning the relation between credit growth and local boom of consumer goods. On top of the list Gurgaon and NOIDA: “The virtuous cycle of credit and consumer market growth shows up strongly in Haryana‚ old-Gurgaon (credit growth 65 per cent and market growth 14 per cent) and Uttar Pradesh, Noida (43 per cent and 15 per cent)”. The question is when the “virtuous cycle” becomes a vicious circle of personal bankruptcy and market slumps.
The rising inflation of proletarian goods increased the pressure from below: workers particularly in the urban industries are getting restless. In this blocked and intertwined situation those in power are aware and afraid of any possible trigger effects, tipping points, chain reactions – and be it a small protest of farmers in a suburb of Delhi…
In spring 2008 in Gurgaon Workers News No.11 we mentioned two cases of closing call centres in Gurgaon area, triggering some mild protest. In August 2008 the newspapers announced the lay-offs of hundreds of call centre workers, some articles speak about ‘the end of the boom’. The reasons given for the job cuts are the recession in the US and the high costs for office rents in Gurgaon – see article on real estate in this issue. While call centre service seems to be the first target of cost cutting, the rest of the IT sector in Gurgaon is apparently still growing.
“The total exports from district Gurgaon in Information Technology and IT-enabled services industry has touched Rs 18,000 crore at the end of FY’08. In the year 2006-07, the software export from Gurgaon was Rs 15,000 crore whereas it was Rs 10,700 crore in 2005-06.” (The Hindu – 23rd of July 2008)
Below we summarised some news on the sector. We start with an article published in December 2007 reporting on the attempt of the regional BPO industry to counteract the tendency of workers changing jobs too quickly – by setting up a sector-wide ‘investigation company’ which is supposed to provide a kind of ‘black list’ of the worst job hoppers. The second article was published in April 2008 and describes a potentially booming new trend from the US: cutting costs of private debt collection by outsourcing it. Following a summary of articles published in August 2008 on various job cuts at major call centre companies in Gurgaon. We finish with two short notes, one concerning the many road deaths in Delhi-Gurgaon caused by speeding call centre cabs – a result of the enormously long working hours and time pressure which is put on the drivers. The last note is on the effect of call centre work on gender relations and the emergence of a kind of call centre workers caste.
Pinkerton against Call Centre Workers’ Mobility
During boom times call centre companies have to put up with a very mobile work-force. People change jobs frequently in order to improve their pay and conditions. The average wage level of call centre workers in Gurgaon increases by 10 to 20 per cent annually. Companies try to lure people with bonus-systems and gadgets, but in times of shrinking profit margins it might become more profitable to set up lists with data on the most agile job-hopping workers. Disregarding all talk about competition this initiative expresses the common interest of companies vis-a-vis the restless work-force. In times of more collective unrests these kinds of lists could come in handy, as well.
“Giving details of the initiative, Business Process Industry Association of India (BPIAI) president Samir Chopra said that they are going to hire an investigation company to carry out this task.”It’s unacceptable to the industry that people who join companies desert them within few weeks. Then the companies, which have invested so much into the training, lose the man and also the investment for no fault of theirs. We intend to stop this by initiating this step,” Chopra added.
He said that the investigations would cover all and the BPIAI would circulate the information among all the BPOs so that each one of them could refer to the list while going for fresh recruitments. In fact, frequent job-hopping has become one of the key deterrents for the growth story of outsourcing industry in India.” The attrition is high. Officially, it’s about 40%, but in reality it’s between 50-60%. That’s why you will find the major BPOs holding interviews throughout the week,” said HR manager of a big BPO operating from Gurgaon.”
(11th of December 2007 – Times of India)
Turning the Debt Crisis into Business
At least one call centre sector in Gurgaon could benefit from US recession.
“GURGAON, India – In a glass tower on the outskirts of New Delhi, dozens of young Indians are on the telephone, calling America’s out of work, forgetful and debt-stricken and asking for cash. ‘Are you sure that’s all you can afford?’ one operator in a row of cubicles asks politely. ‘Well, how do you take care of your everyday expenses?’ presses another. Americans are used to receiving calls from India for insurance claims and credit card sales. But debt collection represents a growing business for outsourcing companies, especially as the American economy slows and its consumers struggle to pay for their purchases. Armed with a sophisticated automated system that dials tens of thousands of Americans every hour, and puts confidential information like Social Security numbers, addresses and credit history at operators’ fingertips, this new breed of collectors is chasing down late car payments, overdue credit card debt and lapsed instalment loans. Debt collectors in India often cost about one-quarter the price of their American counterparts, and are often better at the job, debt collection company executives say.”
(24th of April 2008 – Economic Times)
The US recession forces companies to down-size their call centre services. Some examples from Convergys, 24/7 Customers, Hexaware, Fidelity Management and Research Company India.
“Rajeev, a Senior Customer Care Executive at Convergys has worked at five different call centres in the last seven years. He’s looking for a change again, but this time not out of choice. “This is the first time I feel I am heading nowhere. I have been asked to leave because of something I haven’t done,” he said. Rajeev is one of the 450 employees fired in the last two weeks by a Gurgaon BPO called 24/7 Customers. Reason being that this UK-based mobile phone company has decided to cut back its India operations. The Orange crisis has led to lay-offs at two other Call Centres, Convergys and EXL services.
And this comes after 400 people were let go last month by another BPO giant, Keane India, after a merger and a scaling down of size.”
(13th of July 2008 – NDTV)
“Mid-tier IT company Hexaware Technologies is in the process of shutting down its Gurgaon centre where about 130 employees currently work. Due to escalating real estate prices in the Delhi NCR region, the company has decided to merge the Gurgaon centre with its other centres. The city based company had set up its Gurgaon centre in April 2007. At that point, the company had said this centre would grow up to 1,000 employees in two years.”
(14th of August 2008 – Sify)
“Convergys is shutting down its Malad facility in Mumbai which employs around 400 people, Patni Computer Systems laid off 400 people citing non-performance, while Fidelity Management and Research Company India plans to shut down its Gurgaon facility by September this year which employs around 350 people, according to reports.
The country’s biggest player in the business and knowledge process outsourcing space, Genpact’s experience indicates towards this. ‘The economy is going through a slowdown and the company is also seeing delays in some contracts. The cycle-time for deals has certainly increased from 3-6 months to 9-12 months, especially for firms outsourcing for the first time.”
(17th of August 2008 – Economic Times)
Cutting corners is not only a deadly phenomenon on construction sites. According to management sources the average call centre company has to spend an additional fifth of the wage sum for workers’ transport. We know how they try to reduce these expenses and we know the consequences:
“Every fourth accident on the Delhi-Gurgaon Expressway is caused by a speeding call centre cab. In Delhi, police say, these speeding demons kill at least five people every month. They are probably the biggest killer on roads today after trucks and Blueline buses. The ill-trained, ill-paid and many times drunk cab drivers speed at 100 kmph to maintain their strict reporting hours. The Delhi Traffic police have arrested 1,097 drivers this year. BPOs outsource cab operations to travel agencies and do not employ drivers direct.”
(20th of August 2008 – Hindustan Times)
BPO’s Emerging Caste System
The mix-gendered employment within the call centre industry was always a thorn in the flesh of the watch-(wo)men of social norms: night-shifts, liberal dress-codes, after-work activities. The Catholic Church in Bangalore was so appalled by the debauched reputation of the city’s call centres that it started offering workers religious counselling. The moralistic back-lash causes difficulties particularly for female call centre workers to find a partner within their upper-caste. This is the official version; it is as likely that these young women would not put up with any traditional village guy who is presented to them by their family. Any which way, the problem of new forms of partnerships is expressed and commercialised in many ways, e.g. specific partnership agencies.
“Now, with growing numbers of India’s lady call centre workers reporting problems finding husbands, an IT-age problem has found an IT-age solution. A new dating agency website offers to put female call centre staff in touch with the one group of men for whom the job holds no scurrilous mystery – other call centre workers. Bposhaadi.com derives its name from BPO, which stands for Business Process Outsourcing – as call centre work is known in India – and “shaadi”, the Hindi word for marriage. Sonia Singh, 23, a single call centre worker in Gurgaon, outside Delhi, said that a spouse who worked outside the industry would have trouble accepting the endless parties, picnics, retreats, and treks in the Himalayas that she now enjoyed with her colleagues. “Even if my husband could accept this, I don’t want my in-laws cribbing that it’s not in their culture for a daughter in law to go to work at night,” said Miss Singh, who logs mobile phone complaints from Britain.”
(10th of August 2008 – Times of India)
Machines have to run 24 hours a day in order to suck up enough of human energy for profitable consumption, but the frequent power cuts pose a serious problem to the local industry. The industrial belt around Delhi on an average suffers power scarcity for eight to ten hours a day. Maruti runs its own power-plant and in the way most of the factories and call centres in the industrial belt around Delhi do: burning fossil fuels in their generators. About 350,000,000 litre of diesel are consumed each year by these industrial units. The rising price of diesel hits hard. According to a recent survey by Associated Chambers of Commerce and Industry of India (ASSOCHAM), nearly Rs 14,000,000,000 per annum is spent on diesel for running gensets by about 40,000 industrial units in Faridabad, Gurgaon, NOIDA. This sum amounts to an annual wage sum of about 430,000 workers. ‘The combined electricity requirement of Gurgaon and Faridabad is equivalent to the total power demand of Himachal Pradesh – a state in the north with over 6.5 million inhabitants’ says Dakshin Haryana Bijli Vitaran Nigam managing director vijayendra Kumar in The Times of India, on 8th of March 2008.
In addition to those industrial units, more diesel is burnt for the air-conditioned islands of the middle-classes, for shopping malls and private homes. “Sixty-two-year-old Vijay Malhotra, a resident of DLF Phase, says living in Gurgaon is a big drain on resources. ‘We had to buy a generator just a week back, I invested Rs 3 lakh.’ he says. That’s nearly ten years of income of an industrial worker’s family. ‘That’s a huge investment besides, I still pay a huge electricity bill. The crisis became so acute last year that my daughter-in-law had to shift to Delhi. I hold the government responsible.’ There is going to be more growth without infrastructure till the city bloats to a point of collapse, people say. The demand for power in Gurgaon is increasing by 28% and availability is much less than requirement. In March 2008 Haryana government has issued notification to all the malls in Gurgaon to close on Tuesdays. The reason is power saving and easing the traffic congestion for residents near the malls.
More diesel is burnt by the increasing traffic on Delhi streets, lots of it ‘unproductively’ due to the major traffic jams.
According to ASSOCHAM estimates, in Delhi alone there are over 6 million vehicles running in roads at present, which will cross over 7.5 million in 2010. In view of hub of services sectors in Gurgaon, Noida, Greater Noida, the total vehicles in Delhi NCR will cross to 16 million by 2010. Currently nearly 420 million (wo)man/hour are lost every month by about 7,000,000 working Population of Delhi and the surrounding industrial areas that are taking to public transport for commuting between home and their work and vice-versa as a result of traffic congestion and increasing jams during peak morning and evenings hours.
The machine has to keep on running, energy is turned into destruction of human health and environment – and into business, e.g. by carbon emission trading. For good reasons the Deutsche Gesellschaft fuer Technische Zusammenarbeit (GTZ) GmbH ‚ (German Technical Cooperation), opened their carbon emission trading office for India right in the centre of the polluting money-machine – in Gurgaon. From their web-site: “German companies have contracted the GTZ to facilitate their access to emissions credits. Specifically for purposes of this private-sector contract, GTZ has created a central contact point, the ‘carbon procurement unit’ or CPU, in Gurgaon near the Indian capital New Delhi. “The CPU is starting up at just the right time, because the market is growing by leaps and bounds. The first customer for the GTZ contact point was RWE Power AG in Essen, Germany, which will be permitted to expend 90 million of the certificates before 2012 to meet its greenhouse gas reduction obligations.” Outside of Gurgaon a minor hydroelectric-plant is being built which will enable RWE to produce more carbon emissions in their coal plants in Germany. Fair deal.
4) About the Project –
Updates on Gurgaon Workers News
Updated version of the Glossary: things that you always wanted to know, but could never be bothered to google. Now even in alphabetical order.
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 along party lines, it was the central trade union organisation in India. Since then it has been affiliated with the Communist Party of India.
Business Process Outsourcing: for example of call centre work, market research, sales.
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 (July 2008)
1 Euro = 68 Rs (July 2008)
Haryana State Industrial and Infrastructure Development Corporation
Industrial training, e.g. as electrician or mechanic. Two years of (technical school), one year of apprentice-ship in a company. During the two years at school the young workers receive no money, but they have to pay school fees. A lot of the bigger companies ask for ITI qualification.
Lay off in the Indian context means that workers have to mark attendance, but they actually do not work and receive only half of the wage.
Official minimum wage in Haryana in June 2007 is 3,510 Rs per month for an unskilled worker, based on an 8-hour day and 4 days off per month. But hardly any workers get this wage.
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.
Officially the so called ‘governmental fair price shops’ are shops were ‘officially poor’ people can buy basic items (wheat, rice, kerosene etc.) for fixed and allegedly lower prices. In order to be able to buy in the shops you need a ration card. The ration card is also necessary as a proof of residency, but in order to obtain the ration card you have to proof your residency. Catch 22. Local politics use the ration depots and cards as a power tool that reaches far into the working class communities. Depot holders’ jobs are normally in the hands of local political leaders. In return they receive this privileged position, which often enable them to make money on the side.
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 (summer 2007):
– Monthly rent for a plastic-tarpaulin hut shared by two people in Gurgaon: 800 Rs
– 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 to 8,000 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
– Bottle (0,7l) of beer at Haryana Wine and Beer shop: 50 to 70 Rs
– Cigarettes (10), cheapest local brand: 25 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
Transport and Communication:
– 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
– One litre Diesel: 30 Rs
– Driving license in Haryana: 2,000 to 2,500 Rs
– Start package pre-paid mobile phone (without the phone) 300 Rs
– Phone call to other mobile phones: 1 Rs
– One month mobile phone flat rate: 1,500 Rs
– Minimum dowry poor workers have to pay for the marriage of their daughter: about 30,000 Rs (80,000 Rs more likely)
– Money given to poor labourers for their kidney: about 40,000 Rs
– Compaq Laptop: 50,000 Rs
– Flight Delhi to London: 28,000 Rs
– Cheapest Hero Honda motorbike (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: 10,000,000 to 50,000,000 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.