Economic Liberalization Multinational Companies and Small Business

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Economic Liberalization

Multinational Companies and Small Business


The new economic policy of India has increased the scope of business for multinational companies in India. But still their scope is limited

  The new policy does not allow unrestricted entry into all areas of business as alleged by some critics. IT is criticized that small companies will be doomed as MNCs and big houses dominate the Indian economy. Even the big industrial houses of India are expected to be strangled by MNCs. But if India is careful and cautious then

So the government can play an effective regulatory role.

There are many reasons why we should not fear MNCs.

1) Although the provisions of the MRTP Act relating to concentration of economic power have been struck down, it is still a powerful weapon to curb monopolistic, restrictive and unfair trade practices. The Act can regulate the concentration of economic power through amendments.

2) Small entrepreneurs should not be rained upon for the growth of large firms. Experience shows that the growth of large firms supports the growth of small enterprises in many sectors. The increasing trend of putting out system i.e. sub contracting system further strengthens this possibility.

3) There are many Indian cases which show that in some industry small firms can achieve spectacular growth by being competitive with large firms including MNCs. eg. Soaps and detergents, paints, soft drinks, drugs and pharmaceuticals, electronics, etc. have made some success.

4) Small firms can strengthen their home market position by utilizing the modern opportunities in the growing economy.

5) Small firms can earn good profits by cultivating suitable market strategies. Many small Indian companies are doing well in the markets of advanced countries.

6) The new policy which provides a better environment for the introduction of modern technology will help in increasing the competitiveness of domestic industries and will also help in increasing exports.

7) Though there is much talk about liberalisation, only select industries which are mostly high tech and priority sectors with potential to earn foreign exchange are open to liberal foreign investment and technology.

8) Many multinational products have failed in India. Procter & Gamble fared badly in Japan or Poland. Thus it is not necessary that all MNCs perform well.

9) Even ‘big houses’ can do well in the international market.


The new policy will definitely create problems for the enterprises. Sick units in India may not be restructured, but short-sighted vested interests should not be allowed to undermine the long-term national interest.


While some industries are facing competition with foreigners, they are not able to procure their line materials at competitive prices. This is a clear flaw in the new policy.






First operated industries and their labor force:


Recruitment for each type of job depended partly on one’s skill and hard work, but mostly depended on contracts, especially with a network of relatives or friends from the same village or region, who in turn were of the same caste or community. belong to the category of castes, if they are not relatives, thus one finds




A group of people of similar social origin in a firm, sometimes in a trade or industry.


In big cities where there is rapid growth of industry, employers and workers are found to be educated skilled people from other regions and to set aside other languages is necessary to employ people in factory areas for skilled workforce . The division between Ibor markets for factories and workshops is not always the result of local historical accidents, as much as any systematic discrimination in favor of the rich, educated and upper caste. The largest bureau is not among regular workers in factories and small workshops, but among everyone. There and casual laborers, (unorganized sector)










The ground was in fact prepared for the development of modern industry, but enthusiasm was dampened by the disastrous first effects of colonialism, which hit India at a time when the imperial power itself was industrializing. Modern industries came to India as a result of colonial rule and not intentionally. Village industries include the work of artisans, country weavers making cloth, potters and goldsmiths, similar craftsmen working for a modest market, but better arranged


  Urban craftsmen such as brass and coppersmiths who lived in cities could make artistic items as well as simple utensils. There was another group of workers mainly from local industries who lacked the specialized knowledge that was so necessary. In some heavy industries such as iron-smelting where the products find their way across the country, the methods employed were generally crude.




and unconstitutional. And these industries (signs, glass, paper) were fast dying out for various reasons, one of them being the pressure of imported goods.


Craftsmen and artisans decided to return to the land they could have either as tenants or as landless labourers. The craft industries were not gradually replaced by factories. It took about two or three generations for industries to develop in India. Thus the urban labor of modern India did not fall outside the category of artisans, but consisted mainly of landless farmers or agricultural labourers. According to some authors such as Morris who think that it is unclear why large numbers of craftsmen were forced to become landless laborers in the nineteenth century, as there was a major shift from industry to agriculture, according to Daniel and Alice Thorner, If it did, the time would have been between 1815 and 1880. to say

There is no data as to whether this actually happened or not. From the occupational data of the census we are led to conclude that from 1881 to 1931 the industrial distribution of the Indian workforce was stable. Many old crafts survived. Blacksmiths and carpenters still existed in rural and town areas. The skills and traditions of these tightly organized castes were not lost, but they needed more modern technologies or became industrial entrepreneurs.


Cotton, jute, railways and coal mines were the first modern industries in India. It was not until the Second World War that serious engineering industry was established to supply machinery to existing industries such as cotton, jute, mines and railways.


The character and social composition of the workforce depended to a large extent on the methods of recruiting industrial workers in these four main industries earlier. The workforce there, as in earlier English factories, was unskilled and drawn mainly from poor peasants and landless laborers in the countryside, with a heavy proportion of upper but not lower castes. It was difficult to say how many of the early migrants to Bombay came exclusively from artisans rather than agricultural families, but R. Das Gupta (1976) examined census and other material on the industrial workforce in eastern India in the jute mills around Calcutta. and engineering industries which required more skilled labour. The Census of 1911 showed that the ruined artisan laborers failed to find adequate employment and subsistence in the rural economy, the peasantry unbalanced by the changes taking place in the agrarian economy, the unskilled of all occupations and the peasantry. Artisans and laborers were rendered destitute and most of the people working in jute mills were destitute.



India has been a traditionally organized agricultural society, characterized by a complex division of labor and the employment of a wide range of skills, many of which were transferable to new industrial patterns, when modern institutions began to invade India in the nineteenth century. They didn’t take root. Totally new environment. Elements of literacy were highly present for a modern bureaucracy, a sophisticated system of banking and commerce was in operation, and there was a substantial tradition of workmanship. As a new industry slowly developed in the late nineteenth and early twentieth centuries, they found that the land was partially prepared.



  The rise of cotton mills in Bombay and steel mills in Jamshedpur depended largely on a reservoir of labor coming from Surat’s traditional shipbuilding industry. By the end of the nineteenth century traditional iron working skills found their way into the railway workshops and this modern skill from the railways was eventually adapted into private industry as far away as Jamshedpur. In earlier days factories had less trouble finding both skilled and unskilled labor because they were found almost everywhere in supply, they were either trained in traditional crafts, or some of them were literate adaptable workers who Could have acquired the required skills sooner or later. , But the workforce in those early industries was unskilled and mainly illiterate. Sometimes people traveled long distances in search of work. The employers’ complaints of labor shortage and unsustainable undisciplined work and frequent return of the force to the villages are not justified by the records and figures. Where there was high turnover, as in the Bombay cotton mills, it was a result of poor management and working conditions, with workers leaving for better pay and holding ties to their villages as their only security.



There was considerable industrial migration of weavers, iron workers, carpenters and others who were dispossessed or displaced from their traditional occupations and ‘there the industrial migrants formed a kind of pool of skilled labor for the new factories. New skills learned become technically fit easily and soon. A minority of traditional artisans went directly into the ranks of skilled and better paid workers, the group of unskilled workers, were from very mixed social origins.





Role of Jober:


The role of a jobber was very important from his own point of view, moreover he was also seen as a very important person in the series of tasks performed in the factory, having full experience of working in the factory, He was responsible. To supervise the labor on the job. He had to keep the machines in working condition and provide technical training to the worker or he was also called ‘Sinder’ or ‘Sardar’, his role as registrar of labor came in the form of bulbs, otherwise he was called ‘sindar’. Dasturi’ – Hierarchical job holders were similarly paid ‘Surance’. A jobber is very active during a strike, running around looking for workers. To the master he seemed as indispensable a person as the laborer to the wheel.


He played the role of a ‘patron’ as well as an ‘oppressor’ for the workers according to the situation. Protected their rights and provided them great security and sometimes he could prove to be tyrannical, yet he was precious to the master as well as the worker. At times he lent money to workers for interest and received commission from various other sources. After 1930, the jobber’s role gradually diminished. According to Morris, Jober played the role of a middleman. Employers rejected this system and it was quite

was beneficial to the self-employed to an extent,

One who made the most of the present situation and this was the maximum level up to which an ‘industrial’ worker could rise, there was no ‘possibility’ of rising higher.




  Emerging Terms:


After independence when many strong and new laws came out, a clean division could be seen between the labor force on the payroll of registered factories and other industrial work employees on less favorable terms in small factories which were not registered. This was the time when the job role war was slowly coming to an end.


By this time contract labor emerged as a distinct type – a contractor often employed when labor was scarce. The contractor paid the workers or sometimes the management made the payment and debited the contractor’s account. in some corner




The contractor only supplies the labor which is paid for by the factory management. In some of the best organized industries of the country like engineering workers of cotton and jute factories etc., the way they recruit on a large scale is not known even in other countries. So there the contractors are seen working almost like subordinate employers for the factories. In such situations two types of workers in a factory earning from the same machinery doing the same work in two different ways. Contract worker does this work minus privilege. Even without legal safeguards against dismissal, the white regular employee had become disenfranchised from all other categories of contract temporary or replacement workers.


If one wishes to study the development of the industrial workforce in India, Bombay is once the city to exemplify with its longest history of relatively uninterrupted industrial and commercial development. The docks of the mills, the offices of the railway factory were the foundation of what the new land of work was made of. Especially after World War II, there was a great increase in studies in engineering and metal workers, petrochemical, pharmaceuticals, electronics industries, studies on the living and working conditions of labor force became comparatively an important field of study. Things are as bad as Bombay is.



labour market:


The study of labor markets is about how many natives get a job, how many friends or relatives helped them in the occupation that secured this job. Bombay with its mix of old industries (mostly cotton) and new technologies (engineering, chemical, electronics) provides or provides a cross-section of the types of work found in other cities that have developed over the past twenty years.


Bombay being a city of migrants, waves of migration from different regions during setting up of various industries, the rise and fall of these things leave their mark in the composition of the workforce long after. In recruiting workers the management depends heavily on its existing employees. An important factor in finding a job is access to the ‘contacts’ of relatives or friends with ‘influence’, this is a common agreement.


Scarcity and insecurity compel migrants to maintain their original ties to the village, to maintain the village base and to come back properly if they lose their jobs or earn very little. To avoid the labor hassle and get a better grip on your laborers, Employees use the simplest and safest recruitment methods to recruit laborers through their current workers. He always keeps a list of his laborers, along with the names of the people who brought them. In firms large and small, most employees who are in




Recommendations are relatives or friends of the current worker. The opportunity to bring in relatives is a significant advantage of regular employment in large firms, often formalized in written agreements with the union, for example, that in the death or retirement of a worker, his or her sons or close relatives are employed. Will go if it is suitable.


The practice of hiring relatives and friends of workers as a replacement or taking on new workers has given rise to clusters of particular castes or villages or languages in the same occupation throughout the industry.




Women Task Force:


Semi-skilled women workers cooperate for a casual labour. Since women are known to be neat and delicate in their work, they are required and given priority whenever equipment is carefully handled to withstand the monotony of a production line. Women are not only fighting for their rights with men, but they are also found competing for jobs with equal pay as men. Nowadays most of the clerical work is done by women. A Look As Through A Employers believe that women are best suited for the most boring assembly jobs.


Some factories hesitate to employ women because the Factories Act states that if there are more than 30 married women, a crèche, separate toilets, dressing rooms, etc. have to be provided. machinery. Unskilled female employment in the mills of Bombay c/


percent between 1961 and 1971. While industries mainly requiring educated women, teaching, public administration, medicine and nursing, commerce and banking, pharmaceuticals, (as packers) and post and communication (telephone operators) etc.

There has been an increase in female employment. Home based work (electronic assembly, incense stick making etc.) Most of the poor class working women are recruited in units with very low pay and poor working conditions. Most women workers live in households where the main earner is a man, although women work in networks in different departments or occupations, although the jobs they get are extensions of resource networks.

labor commitment


The development of modern industry is critically dependent on the existence of labour. An efficient labor market is one where positive financial incentives act as a major allocation mechanism in the distribution of labor among factories, industries, geographic regions, and skill levels. Industrialization implies a complex process of social change. In this sense labor commitment is both a cause and a consequence of industrialisation. This is because industrialization cannot be complete until workers undergo this change, and it is a consequence because steps toward industrialization reinforce the process of change and adaptation.




  meaning of commitment


Commitment is expected from the full range of personnel in the industry, including clerical, technical and managerial categories. The worker cannot be expected to commit unless the management does so itself. The three contexts of commitment are as follows


  1. a) Workplace – In a workplace a worker has to interact with machines, other workers and supervisors. Between man and machine worker and worker, and between workers and their subsequent superiors, a specific pattern of behavior is expected of the committed worker. One major consequence of industrialization is that the worker is forced to respond to the pace of work set by the machine. The highest level of machine pacing is experienced by workers in the middle range of skill. Workers at the lowest level of skill may not come into contact with machines at all, while at the highest level, as with the craftsman, they may exercise dexterity rather than control over machines and tools. Workers in all societies are faced with the problem of dealing with machine pacing. Industrial jobs are generally fragmented; The work area of the worker may be limited to the performance of some specific tasks. It is important that the worker is only concerned with the tasks assigned to him, leaving it to others to coordinate the process of work flow. Commitment to division of labor and the performance of narrowly defined tasks can be problematic for workers in newly developing societies accustomed to a unitary rather than fragmented approach to work.


  1. b) Market – The industrial society is a market society. The functioning of society is dominated by the market, which means that any resource is transferable to the highest bidder. The two key characteristics of a perfect market are breadth and purity. In a completely free market society, literally every good and service is transferable. Expansion refers to the total quantity of goods and services available for sale and purchase. Purity refers to the purity of market principle, which is unaffected by non-market considerations such as friendship, kinship, caste and class.


  1. c) Society – The institutional order of society provides norms of conduct that facilitate commitment in the workplace and market context. Kinship is a fundamental and universal feature of all societies. The kinship group most consistent with the notion of personal mobility and new occupational roles is the small, nuclear family. Extended kinship obligations can be a major barrier to mobility. At a minimum, commitment demands a rejection of the obligations of such kinship, commitment implies acceptance




System of social stratification based on merit and mobility of the talented. Since early industrial workers were often unskilled, they were often assigned low positions in the new hierarchy. For some it means loss of status.





  labor commitment in india



The problem of labor commitment in India can be traced back to the Royal Commission on Labor in India, whose report came out in 1931. The commission made several observations, concluding that Indian workers lacked commitment to industrial employment. By 1925 there was an acute shortage of workers in the factories. Workers flocked to the city in search of work during the lean agricultural season, usually without their wives and children. The labor shortage in industry was particularly acute when they returned home during the harvest season. The workers had to compete among themselves for the labourers. He gave various concessions to attract the workers, which seriously affected the discipline in the factory. The overall shortage of labor is claimed to have affected the rate of industrial growth.



Ensus data showed that the urban population had a high component of migrants. The urban sex ratio also showed a higher number of males than females, indicating that many males were single migrants who had left their wives behind. Housing in the city was scarce and expensive. There were few employment opportunities for women. The migrants’ own jobs in the factory were far from secure. a

Banana migration was considered appropriate. The owners of the Testament themselves did not want a permanent workforce. They preferred the flexibility of being able to fire unwanted workers when necessary. Even when an employee went on leave after obtaining prior permission, he could not be sure that his job would remain vacant on his return. If it was taken back, it was not necessarily in the same work, and even if it was, it was treated anew. All these factors increase the turnover rate in the workforce. According to Morris, even in the early thirties there was a sizeable section of workers who developed a long-term attachment to the Bombay cotton mills. There was a high level of absenteeism among the workers, attributed to their roots in the village, and the need to visit the village frequently to fulfill social obligations. Indian workers were often not committed to work. The major findings are as follows –

1) Even in the middle of the 19th century, a large part of the population of Bombay Presidency had to face daily wages. There was no shortage of workers in factories at any point of time. In addition, mills laid off large numbers of workers and shut down when business conditions were recessionary.




2) Workers easily moved over long distances when they got employment opportunities. The caste system did not pose any serious barriers to switching from agriculture to industry or to labor mobility within industry. All kinds of caste groups took employment in the factories.

3) The industrial labor force has not been particularly volatile. The quality of labour, and the degree of its commitment to industry, was more a result of managerial policies and market forces than the psychology of workers and their involvement in caste, kinship and the traditional social structure of the village.


Myers argues that Indian managers showed little interest in labor problems. The work force of the Bombay cotton mills in the thirties was little more than a vast seething mob, with little loyalty and little discipline, labor was cheap and plentiful, and taking measures to foster a stable and committed labor force was poor economics . This situation is not found anymore. Labor may still be plentiful, but the era of cheap labor is over. Furthermore, workers are now well organized, politically aware and have powerful political allies. Labor certainly will not tolerate short-sighted managerial policies. Since the workers maintain their links with the village, village visits are now done institutionally and with the consent of the management. Myers concludes that turnover has dropped sharply and the employee wants to keep his out-of-town job. But he also wants to maintain his connection with the village.


Holmstroms study of engineering workers in Bangalore conducted in the seventies. Bangalore’s employees are production conscious and appreciate the work done conscientiously. They accepted the output goods of the management even when they disagreed with the managerial policy. They wanted to do work that was efficient, offered some variety, and from which they could learn something new and useful. The work of the craftsman was considered most satisfactory. Most of the men had jobs that entailed performing repetitive tasks, but they saw them as the price to be paid for working in a good factory with high wages and security. It was everyone’s effort to move from a monotonous to a more efficient and interesting job, and from a small factory that offered low wages and little security, to a larger and more prosperous one where the job paid well and was more secure. Was. The large factory is a bastion of security and relative prosperity, factory work is seen as a career, and industrialism is seen as a good way of life. Few men would give up a good factory job, in fact most would rather a working girl.


Although the percentage of industrial labor in the country’s total population is still capital, the growth of the wage-earning class in India has clearly been inevitable


The tremendous increase in population greatly helped the results of industrial development of the country. The increasing pressure on land as a result of rapid growth in the country’s population is forcing many people to find alternative occupations. This coincided with the decline of traditional rural industries on the one hand and the growing demand for labor from growing urban industries on the other. Thus, the emergence of an industrial labor force in India is markedly different from its counterpart in countries such as England. Some

The notable features of Indian industrial labor during its development were illiteracy, ignorance and conservatism, heterogeneous structure and consequent lack of stability and a united front, migrant nature, irregular attendance and punctuality, low standard of living, low efficiency and productivity, lack of mobility. Etcetera.





Important characteristics of Indian workers. (Early Industrial Workers):-


Some of the important features are as follows:- Migrant Characters:

A notable feature of industrial labor in India is its migrant character, which indicates the absence of any permanent industrial population in the country that claims the industrial cities of the cities as their homes, with most of the workers living in nearby or remote rural areas.

Immigrants from Poland. Industrial workers in India are mostly migrants from villages. The industrial working class in India has not been a homogeneous class, workers drawn from all parts of the country and from all classes of people.


There have been many reasons for migration which are as follows:-

  1. a) The main reason for this migration is the pressure of population not only on the land but also on the village and its resources.
  2. b) Joint family system has also facilitated such migration as some members of the family can leave the village without breaking up their house or giving up their land.
  3. c) There has been a gradual increase in the class of agricultural laborers without hands over a long period of time in this country.
  4. d) The landless laborers belong to the Dalit class who gradually migrated to the cities to escape from various social disabilities. As industrial employment breaks down social caste distinctions, these people receive better social treatment in industrial centers than in villages.



  1. e) In some cases, people have migrated from villages to cities to escape various punishments for crimes against the social or moral code of the village. Family worries and conflicts also compel some villagers to migrate to cities and seek employment in factories there.






The effects of migration of industrial workers from villages to cities in India can be seen at every stage of industrial life:-


1) Since the migration of these workers can be inter-district and inter-state, therefore, the labor population in most of the industrial centers of India is made up of a heterogeneous group who speak different languages and follow different customs and religions. Hence the factory operator often finds himself in a completely new and unfamiliar environment and his life becomes more individualistic in contrast to the community life in the village.


2) The migrant character of workers in Indian industry has often prevented them from joining any permanent labor unions or unions that are different from their traditional forms of social association. Most workers preferred not to pay their monthly or annual membership subscriptions to existing unions or take any active part in the formation of new unions as they did not intend to live permanently in the industrial city.


3) The majority character of industrial workers has also often been one of the causes of ‘absenteeism’ which is found to be widespread in Indian industries. So employers have to maintain an additional complement of workers or have to hire a larger workforce including substitute workers. is the production cost. Thus, unnecessarily hindering growth and efficient working. The working efficiency of the workers has also suffered as they are not able to get complete and proper training in a particular operation due to frequent breaks in their work due to occasional visits to their villages.


4) Workers in industrial cities generally have to live in various ‘ghettos’ in dark, narrow and overcrowded quarters that lack sanitation. The health of industrial workers is adversely affected by the extremely low quality of diet that they usually get in the city due to low wages or improper food habits.


5) Forced separation from family due to inadequate and poor housing and overcrowding in industrial cities further reduce the health and efficiency of workers. Deprived of the pleasant comforts of family life, the workers in the city easily involve themselves in various unhealthy and immoral practices such as drug addiction, gambling and sexual immorality.




6) Unfortunately, there is a growing disparity between employment opportunities and labor supply in industrial sectors in India, which is constantly widening through new inflows from rural areas. This has had a depressing effect on urban living standards to such an extent that in some cases the newcomer to the city has merely substituted urban misery for rural poverty.


1) The migrant character of workers in India is often taken as an excuse

2) I on behalf of employers for not providing various social amenities of life.


4) It is significant that in most cases the migration of workers from rural areas to urban centers of industry has been of a temporary nature. At heart, factory workers are essentially villagers and yearn to go back to the village. The reasons for the temporary nature of migration of Indian industrial labor are as follows:


6) a) life in cities and working conditions in factories do not suit them; These are completely different from the ones they are used to.


8) b) Without proper accommodation they cannot keep their families with them. Furthermore, the cost of living in cities is very high. Therefore, they prefer to leave their wives and children in the villages where they can live cheaply in a healthy environment and sometimes get some work.


10) c) Due to inadequate housing, there has been a lot of moral decay among the working class in the industrial cities. There is no privacy at all and hence the workers prefer to leave the wives and daughters in their village homes. Therefore, the workers have to maintain close and constant contact with the villages.


12) d) The workers frequently visit the villages to meet their relatives and friends. These visits often coincide with some social or religious function.


14) e) The loss of traditional forms of security has also been an important obstacle in the stabilization of the newcomer in the new social environment. Attachment to traditional forms of social security and belief in their efficacy in comparison to the uncertainties of industrial employment are important influences that prevent peasant migrants from permanently settling in urban environments.


16) A stable labor force “reflects loyalty and co-operation, acquired skills and practical understanding and has a value that cannot be easily measured in financial terms”. Broadly speaking, the relationship between village and stage


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20) Industrialization Whenever organized factory industries have stabilized themselves, they have attracted a permanent industrial population. Whenever employers have taken care of their workers by paying them a decent wage, providing decent housing accommodation and making provisions for the future, labor is more stable than anywhere else. Various measures like the introduction and wide expansion of the Employees’ State Insurance and Employees’ Provident Fund Schemes and Labor Welfare Fund in industrial undertakings in India have gone a long way in stabilizing the industrial labor force in the country. A worker today is far more urban in taste and outlook than its predecessor.


22) Due to instability in the labor force the association of industrial workers with the village has become more or less a thing of history and today the workers are attached to the village but they do not go there for any economic pursuit but the main ostensibly for relaxation, attending social gatherings and spending holidays alone. He has almost lost his economic interest in the land and has decided to follow the vocation he has chosen.


24) Studies on industrial workers in cities such as Mumbai, Pune, Delhi and Jamshedpur suggest that earlier migrants had a desire to return to the village but later showed a growing commitment to urban life and factory work. The age of the worker is also a factor, with urban attractions acting more strongly on the youth. This is more or less true in the expansion of urban industrial centres, where a large number of workers in the cities turn to factory jobs. In sequence industries, a second or third generation of workers has also emerged. A self-generated, working class has its roots in the industrial environment in which a worker is born and thus breeds.


26) Low level of literacy:


28) It is common knowledge that the percentage of literacy in the industrial workforce is very low. However, today a worker knows better that learning is necessary to earn better. He is passionate about self-learning in adult literacy centers and is even passionate about his children’s education and their future. He wants them to enter a more remunerative path, which was denied to him because of the skill requirements. And this aspiration is not limited to urban workers. It has traveled to rural areas, but not very far from them. The labor aspirations have changed mainly due to the large number of young workers joining the workforce. Some of the aspirations of the workers are the result of social consciousness. Others are generated by what they see around them. Role of political parties and business


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32) Unions have been no less important in making workers aware of their surroundings.


34) Low degree of federalization:-


36) The organization of industrial labor and trade union development in India has not been healthy largely due to the fact that the characteristics of the labor force in India

37) The above mentioned has acted as a major hindrance against the growth of union consciousness among the workers.




39) Since independence, the degree of unionization has been increasing, due to the viability of trade union 7 compulsion by the government and recognition of trade union by the employers and by the employers. Moreover a worker today is more politically aware than earlier and is more vocal in his criticism of the existing system and more sensitive to his conditions and difficulties. He has participated in the political and constitutional processes of elections. Workers turn to the union for the fulfillment of their aspirations. Their own involvement in union activities may be modest due to their prior occupations, but they do not hesitate to avail themselves of the services of their union when the need arises. When it comes to choosing the union to which they should belong, the thought at the back of their mind is to support the one that can deliver economic goods. In the leader he seeks only sympathy for the cause and the ability to place his grievances before the employer. He is ready to pay for the services that the union is able to provide. It may be for a reason that is of direct economic interest to him or for welfare activities but more for the former than the latter.


41) High rate of absenteeism and labor turnover:-


43) According to Webster’s Dictionary, “absenteeism is the practice or habit of being ‘absent’ and an ‘absentee’ is one who habitually keeps away”.


45) According to the Encyclopedia of Social Sciences, absenteeism is the “avoidance of employees”.

This is the time lost in industrial establishments by unavoidable absenteeism. Losses of an hour or two from strikes and lockouts or delays are usually not included.


47) KN Vaid says that unauthorized absence is the root of absenteeism measure.


49) The working party for the textile industry defines absenteeism as “the average percentage of workers absent from work per day for any reason”.


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53) According to another definition, absenteeism is the total number of man shifts lost due to absenteeism as a percentage of the total number of man shifts scheduled to work.


55) In other words, absenteeism means absence from work of an employee which is unauthorized, unexplained, avoidable and willful. This absenteeism is the failure of the employee to report for work when the employer has work available for him and the employee knows about it and the employer has no reason to expect that the employee will not be available for work at the specified time.


57) Frequent absenteeism in an industrial establishment is a great hindrance to both the employee and the industry. According to the absenteeism frequency rate, the absence of an employee over a period of consecutive days is taken as one absenteeism. As “no work no pay” is usually the general rule. The loss caused to the worker due to absenteeism is quite different. When workers fail to attend their regular work. Their income goes down and the poor workers poorer. Hence worker’s irregularity in attendance adversely affects the worker’s health and efficiency. The loss to employers and industry due to absenteeism is still greater as both discipline and efficiency suffer. Further, employers or So to meet this emergency an additional complement of workers has to be maintained throughout the year or the industries have to depend entirely on the workers who present themselves at the factory gate and who are generally inefficient. There are


59) Thus, absenteeism causes a distinct loss to both the employers as well as the workers.


61) The various reasons responsible for the prevalent high rate of absenteeism among the industrial workers in the regions of India are as follows:-

62) 1) The most important reason for the absence of labor in various industries in India is the persistent urge of rural migration. The phenomenon of industrial fatigue. Universal malnutrition and poor working conditions forced shifts among industrial workers and forced them to frequent their village homes, sometimes to rest.

63) 2) Attachment to traditional forms of social security and belief in their efficiency is also largely responsible for the high rate of absenteeism in various industries in various industrial centers of India.

64) 3) Certified illness or feigned illness under the sickness insurance scheme accounts for a considerable part of the absenteeism in most places. The life force of Indian workers is generally very low because of the low level of poverty. therefore, they


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68) become easy prey to various diseases and hence fail to attend their regular work and thus become absentee.

69) 4) The percentage of absenteeism is generally higher in night shift than in day shift. Employees working the night shift experience more discomfort and discomfort at work than those working during the day.

70) 5) Industrial Accidents, Religion and Social Celebrations

Birth and various other rites on the occasion of birth and death are also some of the important reasons for absenteeism in industrial establishments in India.

6) Monotony of work, poor working conditions, poor supervision etc. also adversely affect the rate of absenteeism.

7) Low morale of workers has also been an important reason for frequent absenteeism in Indian industries, workers are often absent from work due to frequent involvement in various entertainments like drinking, gambling etc.

8) It is observed that absenteeism is lowest on game day and generally the level of absenteeism increases immediately after pay day. After the monotony of work for a long time, the tired worker has an innate desire to return to his village home for a short time to spend good time with his friends and relatives or to meet his wives and children once his pocket is full. ,

9) Absenteeism is generally higher among workers under the age of 25 than over the age of 40. This is probably due to the presence of a large number of new entrants among the young age group due to the tough nature of the task.

10) The rate of absenteeism is generally found to be higher in large organizations than in small organizations where the manager or boss can maintain personal contact with the employees.

11) Management attitude or unrealistic or better personnel policies also sometimes contribute to high absenteeism.


Absenteeism is a very complex problem for the industry, which requires a very comprehensive and integrated approach and which cannot be solved through piecemeal efforts by harsh penalties or disciplinary measures alone. Industrial absence is rather a creation of social order. The cure for absence, therefore, “does not consist primarily in man’s re-adjustment to social conditions, but in man’s need

lies in the re-adjustment of social conditions for


Controlling absenteeism in any industry requires a three-pronged approach; Firstly, appropriate action should be taken to assess the magnitude of the problem, which requires regular and up-to-date record keeping




Absenteeism data was collected on a scientific basis according to a uniform standard formula for such calculation. Secondly, the various causes of absenteeism in the industries should be properly investigated. Lastly, necessary measures to remove such causes should be taken in a comprehensive manner. However, in order to bring about a positive reduction in absenteeism in industry, it is essential that all possible welfare and other measures are taken to deal with the sense of frustration of industrial workers, to address their personal and family concerns and to improve their health. Nutrition plays a major role in promoting health and vitality. Provision of suitable housing facilities in industrial cities will also go a long way in improving attendance. An effective measure to deal with absenteeism would be to provide leave to employees preferably with pay and allow them adequate rest and relaxation. This will also enable the employees to attend to their personal affairs from time to time. The introduction of breaks during work in the factory has also been found to be very helpful in this direction. Efforts for effective publicity and educated work are needed in this direction. The best policy to reduce labor absenteeism would be to improve the working life conditions for the workers in general and make them happier in every possible way.





Labour turnover:


Labor turnover refers to the movement of a workforce into and out of an organization and, therefore, broadly refers to the inter-firm mobility of labor, defined as “the rate of change of the working workforce of a concern during a given period”. can be defined in Labor turnover measures the morale of workers and their efficiency. These things, too, are the life and blood of an industrial organization and therefore, the problem of labor turnover which is ultimately the problem of stability of the labor force, needs serious consideration of all concerned.


The high rate of turnover, such as frequent absenteeism, is a major deterrent for the workers as well as for the industry; This implies a decrease in skill and efficiency on the part of the workers and less output for the industry. Some amount of labor turnover is inevitable and natural. This type of turnover arises due to retirement of old employees and entry of new blood. But in most cases the percentage of such turnover is very less; Turnover occurs due to resignation and dismissal. Such turnover proves to be very harmful. The loss of laborers is different. a) turnover reduces their efficiency b) due to change of service from one mill to another; The workers are not able to enjoy the various benefits of continuous employment in a concern. c) due to faulty

E system of recruitment, workers after leaving the job in a particular mill has to pay a substantial price for their



Re-engagement in the same mill after some time) Movement of workers from mill to mill and industry to industry also adversely affects solidarity among them. The loss to employers is still high.

  1. a) New employees are often not able to adjust themselves immediately to the machines as well as to the working methods. The attrition rate of new employees is usually higher.
  2. b) Production is affected both in quality and quantity.
  3. c) Labor turnover is a serious hindrance to the full utilization of human and material resources of the country.
  4. d) Hiring as well as training cost has increased, thus adversely affecting the industry and workers and also the society at large. The nation is prevented from taking maximum advantage of its productive resources.


The causes of labor turnover are varied and can be classified in different ways. They can be classified as avoidable and inevitable. The former is related to the factors which are related to the personnel policy of the establishment and the latter is related to the factors which are beyond the control of the management. The former thus refers to resignation, dismissal and lay-off inevitable turnover or natural turnover arising due to factors such as death, retirement and frictional unemployment etc. Workers may be laid off due to reduction in the amount of work due to industrial process or closure. The business-


Resignation and dismissal are the main reasons for labor turnover, resignation can be due to various reasons such as dissatisfaction with working conditions, inadequate wages, poor health, illness, old age, family circumstances and in some cases, migration from village to agriculture, strikes. Conduct due to disciplinary action in cases of misconduct, disobedience, inefficiency etc. or some other. One of the reasons for dismissal is also alleged harassment by employers of workers who take an active interest in trade union activities. , Apart from the above two reasons for dismissal, there has also been an allegation of harassment by employers of workers taking active interest in trade union activities. Apart from the above two reasons, poor management has also contributed to high labor turnover as poor

Many workers are forced to take leave in order to provide work to the workers.


Labor turnover is the result of a number of factors such as the methods of handling men, which are related to the availability of more attractive opportunities, which are related to job mates, which are related to workers and unions. related to



Recruitment etc. These various factors affecting the turnover rate vary according to time, location, firm industry, and the character of both workers and management. Labor turnover, therefore, is more or less concentrated among new entrants to the workforce, some relatively unattractive jobs; Low skilled workers and youth.


A high rate of labor turnover is highly undesirable and efforts should be made to reduce it as far as possible. Isolation which is not inevitable can be reduced to a minimum if the following facts are kept in mind.


Firstly, accurate diagnosis of the maladies is necessary before proceeding to adopt remedial measures. Therefore, to analyze the problem scientifically, proper data regarding the extent of turnover should be maintained. The second vocational guidance which is gaining momentum these days is needed to help people choose jobs. Third, the problem of labor turnover is largely linked to recruitment, if the workers recruited to a firm are not selected efficiently, have either a poor quality of work or a high rate of labor turnover. Therefore, scientific system of recruitment selection and placement will help to a great extent in reducing labor turnover. Fourth, scientific selection pre-suppose job analysis and worker analysis. A comprehensive study of business requirements is necessary to find out the suitable person for the suitable job. Fifth, research of industries is very important because it reveals difficulties and shortcomings in an organizational structure. Sixth, enlightened labor supervision would be another important step in this direction. Labor supervision includes everything that leads to a civilized and conducive work-environment. Good working conditions, better level of pay, a good system of transfers and promotions, sympathetic and fairly supervisory staff are some of the essentials to keep men employed. facilities for education and training, security of employment, facilities for recreation and entertainment, provision of old age pension or insurance are some others

Factors that can be helpful to a great extent in reducing labor turnover, in the end, it is important to provide a fair deal to the workers. Labor turnover is one that can be against the working environment of the workers. It is, therefore, essential that there should be definite means of communication between the management and the workers in order to address the grievances of the employees and to encourage mutual understanding and general co-operation. Harassment of workers for participating in trade union activities must stop completely. Thus, any measure for economic advancement and welfare of workers is bound to reduce labor turnover to a minimum in Indian industries. The Government of India is doing a lot in this regard apart from seeking to pass laws and enforce them through various agencies.





Modern Workers:

The organized sector relies on unorganized or multiple shakes for spare parts and sometimes maintenance which would be uneconomical for large firms to do on their own. Because wages from unorganized sector employment are very low and volatile when added to family income, it becomes possible for a potential organized sector worker to somehow sustain himself in expensive cities like Bombay. Costs that would otherwise have to be borne by a welfare state, or patriarchal management on the Japanese model.







Today, many workers in industry are born in cities, although some of them still come from villages. In new industrial towns or colonies, most of the workers come from the surrounding villages or tribal areas. But now they do not have much attachment to their native places.


According to some studies done on the condition of the workers. 50% of women workers in modern industries and 24% in traditional industries had cut off all ties with their villages, so they never visited them.


Moreover, it is proven and confirmed by numerous studies. That modern worker is more committed than many studies. The modern worker is more committed to industry, he accepts factory discipline, is willing to learn new skills and discard old ones, produces efficiently and fights for his rights as a worker through a trade union. fights for He may still have a keen interest in the land, but it doesn’t let it get in the way of his career.


Although not high absenteeism, some absenteeism may be due to the attachment of agricultural life among the workers, although it is not so alarming.


Some of the characteristics of the modern Indian worker may be listed as under:-

1) Less dominance of caste system: Indian labor is divided and sub-divided on the basis of caste, region and language but these are not very important today. With the introduction of reservation policy by the government, caste structure has lost its importance in industries.

2) Higher Education: Through the Indian industry in its early days Mank farming got hands on, this is the minimum qualification for the job

is not protecting workers with higher educational qualifications than

3) No agricultural work experience: Research studies conclude that most of the workers have rural background due to lack of agricultural work experience.

4) Good Attendance Record: Research studies show that absenteeism is very rare among modern workers today. Most of the workers from rural background have a good attendance record. Immigrants displayed better work adjustment than local workers.

5) Good working conditions: Employees who work in better conditions and have less stress do not shy away from work.




6) Low mobility: Indian workers are less mobile. They don’t leave the job and go to another. It is mostly due to excessive obedience, lack of competitive spirit, desire to stay in or near the original place, resistance to change, problem in adapting to the new environment and organizational climate, etc. It shows that the Indian worker is used to doing routine work rather than accepting challenging tasks.

7) Deserve for Job Security: Indian workers are more inclined to get job after security. They want permanent job as initially job does not have high salary.

8) Low unionization: The Indian worker, though he subscribes his name to one or the other union, does not participate in any of the union activities. Most workers are extremely self-centered.

9) Wages: More wages create more interest and more rights. It also provides a greater sense of responsibility.

10) More Disciplined: Workers today are ready to be disciplined and controlled. They follow most of the rules.

11) Technology and Labour: If technology is superior, then the worker accepts the challenge and can adjust well with the work conditions.

12) Skill and Labour: Skilled workers are more satisfied than unskilled workers.

13) Workers and Aspirations: Higher level workers have higher aspirations


Some of the notable characteristics of the Indian industrial labor (early industrial workers) during its development may be called illiteracy, ignorance and conservatism heterogeneous structure and consequent lack of stability and a united front; Migratory nature, irregular attendance and punctuality, low standard of living, low efficiency and productivity, lack of mobility etc.


Indian laborers have changed now. Modern workers are no longer rural at heart, they are city born, educated, skilled and ambitious.



An economy in which organized sector employers and permanent workers are privileged at the expense of the industrial unorganized sector and rural masses. Since capital is scarce and labor is abundant, this leads to unemployment. Using traditional artisan labor lost their markets, small firms




Intensive if not traditional methods cannot offer enough alternative employment as they cannot compete with large firms.


1) The ILO mission in Kenya advocated strong action to remove constraints on the informal or unorganized sector and to increase formal sector demand for goods produced in the informal sector. If small companies cannot beat the big companies, they can continuously join the Indian Governments, especially acting through the Small Industries Service. Institutions have tried to encourage large-scale ancillary small-scale development or to find organized sector markets for the products of small firms, particularly in the engineering industry. And whether one believes in banning large firms or not, it is clearly prudent to remove constraints on small ores and promote a healthy complementary division of labor by helping those developing small units that need it the most. the wanted.


2) Organized sector workers enjoy much higher wages than unorganized workers with certain skills, or simply being in the organized sector, they have the chance to acquire valuable skills that cannot be learned in smaller firms . Two things drive the difference there.


unions that are strong in the organized sector but weak or absent in small firms, and labor laws, which cover only the organized sector and are effective only in large firms.


In their H and V Joshi Surplus Labor and the City A Study of Bombay, they argue that the authorities need to revise their image of the unorganized sector as a motley collection of riff-raff with little productive potential. The unorganized sector can provide employment to a much larger number, meet the needs of men more cheaply and efficiently and produce for export if it is not held back by a structure of regulations and policies when more vested interests Meets the needs of small groups with , If so, this privileged group consists of organized sector employers, workers and unionists. Organized sector workers can give better education to their children, and they can get jobs, so that the privileged class of organized sector workers continues generation after generation and loses contact with the masses.


capital intensive technology and large

The units move closer together, they are also said to lead to cities with higher concentration of people and employment opportunities. This leads to social disorganization and crime in the slums. It corrodes the countryside, drives away talented people and puts rural masses at a disadvantage.


Modern production methods pollute the environment more than traditional methods, and mine the world’s supply of limited resources. Modern production methods not only deprive


Crowding out useful employment, but dehumanizing those employed, destroying the natural rhythm of agricultural and handicraft work. In addition, labor in small units tends to be isolated – even if technology is not traditional, the relationship between workers and employers tends to be closer, more humane and less exploitative than in large firms.


The flourishing nexus of small businessmen, with employees in their private pockets, is to prevent the polarization of society into rich and poor, the existence of a large number of independent self-employed individuals is a guarantee of the maintenance of democratic institutions, an obstacle to trade unions. An obstacle to dominance and unity H and V Joshi believe that large companies make the wrong products, mainly luxury items for the rich. The organized sector is only interested in supplying lucrative urban markets, not in encouraging the growth of healthy, small firms that can supplement large firms in supplying mass corruption goods cheaply, with little effect This is because big companies use only the weak unorganized sector. on grossly unequal firms.


The organized and unorganized (formal and informal) sectors of urban industry are mere links in a chain of exploitative relationships stretching from multinationals with their political allies in rich countries to the poorest of the poor, the rural poor. Foreign investment and aid, providing inappropriate technology, reliance on trade with rich countries, and the creation of an indigenous capitalist class and managerial class with expensive tastes are the means by which dominant foreign interests extract surpluses from everyone down the chain in varying degrees. Let’s take it out. ,


Radicals believe that Western affluence and consumer society, even if they were attainable in India, are false ideals. Indians should content themselves with a spiritual life rather than modest self-reliance, dutifulness, co-operation and social equality. they should

The village republic returns to the traditional values of the society.


3) It is true that the Indian industrial economy is a dual economy, where the entire organized sector—owners, management, workers and unions—form a privileged enclave or elite at the expense of the entire unorganized sector. owner and worker alike – who are prevented from realizing their potential for employment and production; And there workers in the unorganized sector, such as farmers and other outside industries get the backwash of industrialization and not the benefits?


Organized sector means firms with ten or more workers which must be registered and inspected under the Factories Act.


Small unorganized sector firms are covered under another act, which is enforced by the local authorities. In much of the literature, the term informal sector is used, as in other countries, to define ‘small scale industries’ below a certain investment threshold to cover them broadly, which enjoy benefits such as easy credit and reserves. are entitled to. product time. Thus many small scale industries are in the organized sector, and there would be more if the law was implemented. Ownership is something else; Many small firms are owned or controlled by men with multiple interests, who divert their capital from one use to another, or occasionally by very large companies. There is a wide gray area of firms, which legally should be ‘organised’, but in fact are not.



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