LAUNCH OF AN IT WORKERS UNION BRINGS OUT THE SPLIT IN THE

UNCLAS SECTION 01 OF 02 CALCUTTA 000525

SIPDIS

SIPDIS

DEPT PLS PASS USTR

E.O. 12958: N/A
TAGS: ECON EIND ELAB ETRD IN
SUBJECT: LAUNCH OF AN IT WORKERS UNION BRINGS OUT THE SPLIT IN THE
CPM



1. SUMMARY: On November 14, IT workers formed West Bengal's
(WB) first IT workers union. Its creation has exposed fault
lines within the Communist Party of India - Marxist (CPM) and
the Left over the role of labor and industrialization. The
reforms-oriented Chief Minister Buddhadeb Bhattacharjee and some
in the CPM are clearly not in favor of militant industrial
action in the IT sector, a rapidly growing sector in West
Bengal. The CPM and its allies were planning a national general
strike for December 14 to protest UPA policies but Bhattacharjee
had hoped that the IT sector would be insulated from the
disruption. The upcoming general strike will be the litmus test
for whether the pro-reform faction can shelter this nascent
industry from economically damaging labor movements. Worried IT
industry leaders have been lobbying the administration and
political leadership. The developing battle within the Left
over the unionization of the IT sector will determine whether
the reformers or hard-line Marxists control the state's economic
policies. End Summary.


2. On November 14, the West Bengal Information Technology
Services Association (WBITSA) became the first IT workers' union
in West Bengal - and in India. The WBITSA is expected to
represent 40,000 IT workers in West Bengal's IT sector. WBITSA
is affiliated with the Center for Indian Trade Union (CITU) --
the labor wing of the CPM. WBITSA's creation has exposed
divisions in the CPM on the party's approach to
industrialization. The pro-reform faction, led by Chief
Minister Buddhadeb Bhattacharjee, argues that any move perceived
as going against corporate interests will scare the investors
away from West Bengal, which is showing signs of industrial
growth after falling behind other states. In contrast, the CITU
leadership believes that working conditions and contracts in
Kolkata's IT companies go against existing industrial guidelines
and laws. Hence, workers need to be organized to improve
conditions.


3. CITU and other elements of WB's Left Front government had
called for a general strike throughout India on December 14 to
protest the policies of the ruling United Progressive Alliance
(UPA). Because Kolkata's IT sector is considered a shining
example of West Bengal's industrial revival under Marxist rule,
the question of IT companies staying open during the strike has
become a contentious issue. Most of these IT companies have
overseas clients and any disruption in operations would result
in significant losses. In the recent past, the CPM-led West
Bengal government had to deploy police to ensure continued
operation of IT companies during general strikes. CM
Bhattacharjee and CPM Politburo member Sitaram Yechury favor
declaring the IT sector an "essential service" comparable to
electricity, health and municipal services, in order to permit
IT companies to remain operational during the strike. CITU
hardliners like M.K. Pandhe and Chittabrata Mazumdar have
opposed this designation.


4. Significantly, the state unit of CITU, led by the pro-reform
leader Shyamal Chakrabarty has not committed WBITSA to
participation in the all-India strike. While inaugurating the
union, Chakrabarty explained that workers forming unions does
not necessarily imply disrupting work. Workers no longer go on
strike in West Bengal except in jute and tea industries,
Chakrabarty added. Although hard-line labor leaders like
Subhash Chakrabarty (no relation) have been vocal about
unionizing IT workers, the pro-labor rhetoric was considerably
toned down during WBITSA's inauguration. Contacts told post
that WBITSA in all probability will be a "docile" organization
to appease the hard-liners. It was apparently put in place in a
hurry to preempt a move by the Congress-backed Indian National
Trade Union Congress (INTUC) to enroll workers in its
organization. The INTUC had recently launched a drive to enlist
call center workers and outsourced contract staff like couriers,
security services, motor pool workers.


5. Kolkata's IT managers, for their part, are concerned about
the effects of unionization on development. Leading IT
companies have formed an informal group (Salt Lake Rajarhat
Committee) and have met West Bengal's IT minister to argue their
case against the move to form unions. One CEO told post that
the move may be portentous for West Bengal's IT sector,

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especially as the outsourcing segment was going through a boom.
"The Minister told us not to worry as the development is not too
serious at the moment," he said. The Bengal Chamber of Commerce
has met the state administration on behalf of the IT companies
and also expressed the industry's concern.


6. COMMENT: While WBITSA's formation may have been inevitable
given WB's long history of pro-labor movements, many in the Left
are now projecting a pro-corporate image to attract investment
to the state. The CPM's task is to demonstrate that the party
has left behind its days of confrontational labor movements.
Labeling the IT sector an essential service may solve the
December 14 strike problem, but it skirts the real issue: which
faction within the CPM will influence future economic policy -
the reformers or hard-line Marxists? END COMMENT.
JARDINE