SOAS Research Online

Abstract

This study examines labour–management relations in Indian industries in order to provide an alternative analysis of labour market reform priorities. Using a combination of micro level data collected from field research in Mumbai and Kolkata, complemented by secondary evidence on the wider social and historical contexts, the reproduction and transformation of different types of labour market institutions (LMIs) are explained in terms of the historically specific ways in which industrial development has proceeded under the different socio-political conditions that underpin them. It challenges the common argument that industrial performance in Mumbai has been better because it has enjoyed professional company-based unions as opposed to unions organised at the industry level and affiliated to political parties as has been the case in Kolkata. Instead, an alternative interpretation is put forward that partially reverses the causality: dynamic regions provide strong incentives for unions to organise while seeking company-based economic surplus, rather than politically channelled resources that are more attractive in less industrially dynamic regions. This questions the validity of policy prescriptions that focus on curbing union linkages to political parties or the influence of external leaders. The study suggests that party-political affiliation is not the issue, instead it offers a socio-economic explanation of how and why LMIs take different forms.