At a Dell Computers factory in Sriperumbudur in Kancheepuram district. Tamil Nadu is home to numerous multinationals and ranks among the top States in the ease of doing business criterion.
| Photo Credit: REUTERS

Tamil Nadu is currently a “boom State”, being a leading manufacturing hub and a major exporter of electronic goods in the country. The government claims that it has brought Rs.10 lakh crore worth of investments in the past three years to generate 31 lakh jobs. Another Rs.8,000 crore of investments are in the pipeline after Chief Minister M.K. Stalin’s recent visit to the US.

With the States in stiff competition to woo investments and thus offering multiple concessions to industry, labour welfare has come under pressure across India after liberalisation. The image of a developed State with vibrant economic parameters often blurs the humane side of industrialisation.

Where the State stands

With a GDP of Rs.23.64 lakh crore, Tamil Nadu’s per capita income is Rs.3.15 lakh, 1.71 times higher than the national average. It has among the lowest poverty rates, with only 2.20 per cent of the population below the poverty line compared with the national figure of 14.96 per cent (“multidimensionally poor”). It ranks third in ease of doing business, besides having the largest pool of skilled workers in the country. But while the economic and development indices look rosy, the success story also has some dark strands.

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The Periodic Labour Force Survey (PLFS) of the Union Ministry of Statistics and Programme Implementation for 2022-23 shows that Tamil Nadu’s unemployment rate among graduates is 16.3 per cent against the national average of 13.4 per cent. Youth unemployment is 17.5 per cent against the national rate of 10 per cent. Despite boasting the highest number of factories, the State faces challenges in generating adequate formal sector employment.

While these concerns may have spurred the State government’s initial decision to back the Samsung management, the fact remains that from the 1990s, with the onset of liberalisation, the State has seen the systematic effacement of unionism.

History of labour movement

Before that, the labour movement in Tamil Nadu was strong, especially in the textile sector in Coimbatore and Madurai and in the cement and sugar factories in Tiruchi and other districts. Plantation workers were also organised in unions in the Nilgiris, Kanyakumari, and Tirunelveli.

In fact, India’s first organised trade union, the Madras Labour Union, was formed in 1918 in Tamil Nadu. The Buckingham Mill case, which followed the strike in the Binny Mills in 1920, resulted in India’s first Trade Unions Act in 1926.

Besides these, there were strikes in Wimco, Simpsons, Aruvankadu Cordite Factory, and so on, leading to many intense moments of labour unrest in Tamil Nadu. R. Venkataraman, who went on to become President of India, was the leader of the Simpson Group’s employees’ union. Job security and fair wages were the primary agendas in those early strikes, and they went a long way towards ensuring dignity of labour and removing toxic working environments.

Liberalisation and anti-worker laws

With liberalisation came a series of laws that went against the working classes. Labour laws and the Minimum Wages Act were diluted, with companies slowly being given the freedom to fire workers, employ contract labour, and shut down establishments without government approval.

A.K. Padmanabhan, the CITU’s national vice president, told Frontline that in Tamil Nadu both the DMK and the All India Anna Dravida Munnetra Kazhagam (AIADMK) discreetly put in place several measures that went against workers. He added: “The steep decline of the unions began in the early 1990s. As elsewhere in the world, the trade unions, which ensured substantial quality in working-class livelihoods, were pushed to the margins of factories and establishments.”

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Changing political equations further eroded the power of mediation vested in trade union activism. With State governments beginning to compete for capital investments, the Tamil Nadu government in the 1990s rolled out the red carpet for many multinationals, who began to dictate terms, including demanding cooperative labour, as a condition of investment. This further aggravated the decline of unionism in the State.

According to Padmanabhan, in the early 1960s, unions and union leaders coordinated their struggles despite political differences. He said: “It used to be a joint leadership in important struggles. The CITU, formed in the 1970s, coordinated with independent trade union activists like R. Kuchelan. Veteran labour union leaders like V.P. Chinthan used to work in tandem with everyone. That was how many important strikes, such as in Wimco, Simpsons, and MRF were successfully handled during the 1980s and 1990s.”

In fact, the dilution of unionism actually began earlier in Tamil Nadu, with the DMK’s ascent to power in 1967 and with the AIADMK’s rise in the late 1970s. Padmanabhan said: “They failed the workers. These two major parties did not support the workers in many important struggles. Violence was unleashed by the state. It was a sort of betrayal of the working class by them.”