Pre-Budget Consultation: Central Trade Unions Call it a Farce!

Condemn the Policies of the Government!


(A pre-budget consultation meeting with Central Trade Unions was called by the Finance Ministry, Government of India, on 18th December, 2021 prior to presentation of Budget 2022-23 in the coming Budget session of the Parliament. The platform of Central Trade Unions, in response to the invitation, sent a letter calling the exercise a ritual and a farce. The CTUs condemned the policies of the government as out-and-out pro-corporate and anti-people. The platform also cited the government’s latest pro-corporate and anti-worker, anti-people measures. The CTUs also further reiterated its earlier suggestions for a pro-people Budget.)

Some Sections of the Letter and Suggestions

To begin with, we will like to express our unequivocal condemnation of the illegal suspension of MPs from opposition parties who have been stopped from raising concerns of people in the Parliament. The act of suspension reveals the intention of the government about not engaging with representatives of people while formulating policies.

We have time and again pointed out that your policies are openly pro-corporate and against the workers, peasants, common people and the interest of nation. The entire national assets, capital and wealth created in state sector and public sector, through people's money, are being handed over to Corporates through outright sale (BPCL, SCI, CCI etc.) or through the so-called National Monetization Pipeline (Railway Stations, Airports, Highways, Petroleum Pipelines, Telecom Towers, Power Distribution Lines, etc.)

When the entire country was struggling against Covid-19 pandemic, your government imposed Disaster Management Act and banned all social activity instead of declaring it a Health Emergency. In this banned period, your Government passed 3 farm laws and 4 draconian labour codes scraping the 29 central labour laws without any discussion even in the parliament. You had to repeal the 3 farm laws only after more than one year long agitation and huge sacrifices by the farmers. But the 4 labour codes, which are pro-corporate, are being readied for implementation with States forced to frame corresponding rules.

Here are fresh instances of pro-corporate policies:

(a) You have taken a lenient view regarding recovering AGR dues from the mobile service providers.

(b) You have announced and started implementing the so-called National Monetization Pipeline. You have tried to argue that this is not sale, that the ownership of assets in the pipeline will remain with the Government which has no practical value (with lease periods as long as 99 years). It is, in effect, sale of National Assets, at cheap rates to the Corporates. 

(c) Sale of Air India has been hailed only by the Corporate lobby and not by the employees or the general public and it was at a whopping loss to the Government. 

(d) Reports are appearing of cost overruns of many infrastructure projects, use of funds provided for various schemes being used on advertising, rather than actual implementation (Beti Bachao, Beti Padhao).

(e) You have converted 41 Ordnance Factories into 7 non-viable Corporations, with a view to privatise them (which the entire trade union movement has been demanding be withdrawn). 

Instances of anti-worker Policies:

(a) Your enactment of Essential Defence Services Act, 2021, which makes strike in any defence related industry (definition of “defence related industry” depends on the whims and fancies of the Government) a criminal offence;

(b) Launch of E-Shram portal for unorganized sector workers, without any budgetary provision to provide the social security they are entitled to get further, it should not undermine the social security cover being provided by state governments,

(c) Cancellation of many passenger trains, withdrawal of many concessions and services available earlier on train tickets. Increase in train fares,

(d) Air India employees have been served notices to vacate their accommodation within 6 months.

(e) You have proposed the so-called Blue Economic Policy, which will spell ruin of traditional fishermen-fisherwomen and hand over the sector to the Corporates, who are notorious for damaging even the ecological balances by their rapacious fishing.

(f) Number of posts in Labour Machinery, such as Officers of Labour Commissioner, Tribunals, higher courts etc. are lying vacant. That is one of the main reasons for the workers not getting justice in time. They need to be filled immediately.

You must be aware that the Singareni Coal Workers struck work for 3 days only last week to protest against the Government's policy to lease out coal blocks for commercial mining, bank employees were forced to go on a 2-day strike on 16-17 December against the proposed Banking Laws (Amendment) Bill, 2021, the electricity employees have said they will strike work if Electricity (Amendment) Bill, 2021 is moved in the Parliament. None of these strikes are for any immediate demands of the employees striking work, they are meant to make the consumers aware of the consequences of those policies. Even the 50,000 MSMEs in Coimbatore plan to down their shutters on 20th December to air their issues.

The National Convention of Workers held on 11th November, 2021 at Jantar Mantar in New Delhi has declared the intention to go on a 2-day strike on 23-24 February 2022, during the budget session to protest against all the policies being followed by the Government.

As opposed to your oft repeated claims that the country's economy is about to take off etc., you must have come across reports of extreme income inequality in India, India slipping down in Global Hunger Index etc. This is the net result of your policies.

As for your proposal to join the pre-budget consultation on a zoom meeting for one hour, with more than 14 unions expected to participate, is only a farce. We had protested even last year about this, but to no avail. 

We request you to hold a physical meeting for such consultation so that you may get a feel of the ground realities. Or even better, we invite you to an open public debate regarding these policies, instead of these zoom meetings which leave everyone dissatisfied. We look forward to your agreeing to such a debate.​​​​​​​

Suggestions by Central Trade Unions

Minimum wage and Deliberate Depression of Consumer Price Index (CPI) for Industrial Workers: The Minimum wage, including the National floor level minimum wage should be decided on the basis of the recommendations of the 15th Indian Labour Conference and the Supreme Court judgment in Raptakos & Brett case (which the Govt. has already proposed in the Rules of the Code on Wages Act 2019) and linked to current Consumer Price Index, and the same should be guaranteed to all workers. The 7th Pay Commission has worked this out to be Rs. 18000 per month, with effect from 1.01.2016, which the government has accepted. It has been five years since then and the prices of all essential commodities have increased. But the Government has deliberately made 2016 (Year of demonetization) as the Base Year for calculation of CPI, reducing the weightage of food items, in opposition of the views of the trade unions. The Expert Committee appointed by the Labour Ministry to decide the methodology of fixing minimum wage has artificially suppressed the minimum wage, grossly underestimating the cost of living and arbitrarily cutting down the universally accepted calorie-requirement standard which is totally unacceptable. Hence, the national minimum wage should be fixed at not less than Rs. 21000 per month for the entire country. Need based minimum wage should be considered as an essential part of social security.

• Employment generation: Employment generation has nosedived in the recent period due to economic slowdown. The economic slowdown itself is the result of the Government‘s policies since 2014. Massive public investment in infrastructure, social sectors and agriculture would generate employment. The pandemic has caused further economic disruption the world over. But the sudden lockdown announced has led to unimaginable misery for toiling people, especially the migrant workers. The Unions have demanded that each person outside the income tax net, be paid Rs.7500/- per month and 10 kg per month free ration for six months. The union budget should give priority and allocate the necessary funds for this. Emphasis should be on raising the internal demand rather than exports. All vacant sanctioned posts in the different government departments including in the health, education departments and institutions, in the Railways, PSUs and autonomous institutions should be filled up through fresh recruitment. The ban on creation of new posts and mandatory reduction of government posts should be lifted. Denial of level playing field to many PSUs (BSNL, MTNL, ITI etc.) had put thousands of jobs in jeopardy. The policy of merger of BSNL-MTNL and voluntary retirement (which is actually forced retirement) of almost 79000 workers is just opposed to the idea of creation of jobs. The provision of “fixed term employment” also should be done away with and concerned notification should be rescinded forthwith.

Skill development: Government has been heavily incentivising the employers for engaging apprentices in the name of skill development. The employers, particularly in private sector, including MNCs, are taking advantage of this by deploying apprentices in regular production jobs year after year and gradually cutting down regular employment thereby saving hugely on the statutory social security expenses and wages also. This practice must be stopped by regularising the apprentices working years together on regular production lines as workers.

A white paper should be published on the working of these skill development agencies. The government must also intervene to ensure placement in regular jobs, of those getting trained in those agencies.

• Increase budgetary allocations for social sector: The government should increase allocations on social sector and basic essential services like health, education, food security, etc. in the Union Budget, particularly in terms of improving infrastructure, filling up of all vacancies and creating new jobs to meet the increasing needs of the population. The New Education Policy is a blue print for privatization of Education. It is abdication of the Government’s responsibility to guarantee Right to Education. The necessary financial resources should be raised by increasing direct income tax and corporate tax, wealth tax, and inheritance tax for the topmost level, while reducing the CGST, thus, at the same time, reducing the increasing income gap.

• Effective measures against deliberate tax and loan repayment defaults: Effective and firm measures should be taken against deliberate tax default by the big business and corporate lobby to curtail the huge accumulation of unpaid taxes, which have been continuously increasing. Further, wilful default in repayment of bank loans should be made a criminal offence, the list of wilful defaulters should be made public and stringent measures such as fast track Debt Recovery Tribunals should be implemented for speedy recovery of loans. The easy escape route called Insolvency and Bankruptcy Code (IBC) Procedures, which denies workers any say and robs banks of their NPAs, should be scrapped. The Government should withdraw its policy to continuously reducing the tax slab of the corporates. Roll back the tax concessions to corporates, reduce the user fee in Banks for common man, increase interest on the savings of common citizens and reduction of interest for loans to micro, small and home based sector to help generate more jobs. Stop merger of banks.

7th Pay Commission: Resolve demands of the Government employees regarding 7th Pay Commission, which remain unresolved even when half the duration of this Commission is about to be over.

• Price rise: We had demanded the following in our last presentation: The rise in prices of essential commodities is matter of grave concern for workers. The retail inflation has already crossed the double digit as on November 2019 as per NSSO estimate. Speculative forward trading and hoarding of essential commodities are major factors contributing to the price rise of essential commodities, particularly of food items. It has become impossible for the workers and other toiling people to meet their basic daily needs. The government should ban speculative forward trading in essential commodities, take strong measures to curtail hoarding and strengthen Public Distribution System, making it universal. Stop the system of cash transfer to beneficiaries’ accounts in lieu of PDS. This is leading to exclusion of large number of needy people. Take immediate steps to reduce the price of medicines including life- saving drugs. 

The Government has done exactly the opposite by passing Essential Commodities (Amendment) Act, which in effect allows hoarding of essential commodities!

We demand that taxes on petrol and diesel be reduced throughout the country, as this has kept all transport related costs high and are a burden on the common people.

• Stop disinvestment and strategic sale of public sector units: The reported pronouncements about disinvestment, closure and sale of the public sector units, by those in governance are a matter of grave concern. The Government sets targets for sale proceeds, in complete disregard to the unanimous opposition of all the trade unions to this policy. The public sector has to be strengthened and expanded. Budgetary support should be provided for the revival of potentially viable sick public sector units. Strategic sale of the profit making PSUs and also potentially viable PSUs in strategic and core sectors should be stopped forthright. The immediate example are proposed sale of BPCL PSU, whereas Indian Oil-another PSU is ready to take over the BPCL to which Government is not agreeing. The proposed sale of BPCL should be abandoned. The amendments to the Motor Vehicle Act, has already created problems for the general population and paving the way for privatisation of the state-owned public transport system. We want the Government to withdraw these amendments. So also the proposed Electricity (Amendment) Bill 2020 should be shelved. It is shocking that the Government has not even bothered to place it in the Parliament before trying to implement it in BJP ruled states (UP, and some Union territories for example).

• Extend MGNREGA: Expenditure on MGNREGA should be increased to cover all rural areas. Ensure immediate payment of accumulated unpaid wages to workers employed under MGNREGA. It should be amended to include the urban areas as well. The unanimous recommendation of 43rd ILC to extend the scheme to urban areas, guarantee employment for a minimum of 200 days with statutory minimum wage, should be implemented. Payment of wages for the work done, pending for many months should be immediately paid.

• Contract and casual workers: No contract/casual workers should be deployed on jobs of perennial nature. The contract and casual workers doing the same and similar work as the permanent workers should be paid the same wages and benefits as paid to regular workers as directed by Supreme Court of India in 2016. Regularize the existing contract and casual workers in the jobs of perennial nature.  PSUs and Government Departments should be model employers in this regard.

 FDI: The CTUs have been repeatedly demanding that FDI should not be allowed in crucial sectors like defence production, railways, financial sector, retail trade etc. But the government has persisted with this policy and announced for 100 percent FDI in coal. Corporates with large NPAs are allowed to invest in sensitive sectors like defence. We reiterate the demands that FDI should not be allowed in the crucial sectors.

• Defence: Privatisation and/or outsourcing of the defence sector production should be stopped. The order of outsourcing of the 272 items being produced by the public sector ordinance factories should be withdrawn. The proposed policy of corporatisation of 41 ordinance factories be rolled back. This policy should be abandoned in the national interest. The Defence federations have jointly taken up the challenge of meeting the Government‘s expectations of giving production worth Rs. 30,000 Crores per year. The Government must provide the necessary inputs to achieve this target.

• Railways: Adequate financial resources should be allotted to the railways to ensure more effective, accessible and affordable transport to the common people, particularly the poor. The capabilities of public sector production units should be utilised fully, further developed and strengthened. All measures taken to privatise the railways should be scrapped and abandoned. The measures to hand over the railway stations across the country to private players should be immediately stopped. Decision to corporatize the railway production units should be scrapped and abandoned. No property of railways should be handed over to private sector through lease or sale. The decision for closure of Railway Printing Presses should be withdrawn.  The decision to allow 100% FDI in railways should be withdrawn. Adequate financial resources should be allocated to improve safety systems and ensure safe rail travel for the people. All the vacancies in the railways should be filled up. The long pending demands of the railway employees like enhancement of ceiling in respect of running allowance for tax exemption, housing scheme etc. should be addressed positively.

• Scheme workers:  Regularise the workforce employed in the various schemes of government of India including the ICDS, NHM, Midday Meal Programme, National Child Labour Project, Sarva Siksha Abhiyan etc. Till this is done, at least immediately implement the recommendation of the 45th ILC that these scheme workers should be recognised as ‘workers’, they should be paid minimum wages and provided social security benefits including pension. Increase budgetary allocations to these schemes and stop privatisation of these schemes in any form. The government should implement Gender Budgeting in view of these almost exclusively female workers. These “Frontline Warriors” were cheated of even the allowance promised for the corona survey done. Those who died during their services in Pandemic period, their families have not been given the promised compensation which was announced with fanfare. 

• Domestic workers: The government should ratify the ILO Convention 189 and enact a central law and create support system for domestic workers. Their plight was the worst during the pandemic and they need the financial support demanded by the entire trade union movement in the country.

• Unorganised workers: The Budget allocation for National Fund for Unorganised Workers to provide social security for all unorganised workers be enhanced. Direct all state governments to frame rules under the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act and allocate funds for developing street vending as livelihood model. Provision of cess collection for welfare fund in Beedi, Mining sector, Cine Workers etc. which has been discontinued following introduction of GST should be restored for dedicated funding of the sectors-specific welfare schemes. Management of cess under the Building and Other Construction Workers’ Welfare Board, Beedi Workers Welfare Board etc. should be made the responsibility of Ministry of Finance, which should ensure its proper collection, stoppage of evasion and mis-utilisation. The convention for home based workers be ratified and appropriate law be enacted for these workers for proper piece rate work and ensuring social security coverage to them.

Labour Codes: The entire trade union movement demands that they be repealed/scrapped forthwith. No labour law amendment should be undertaken without the consent of the trade unions and workers who are the main stakeholders and the most affected.

• EPF: There should not be any threshold limit for coverage under EPF scheme. Government and employers’ contribution should be increased to provide a minimum pension of Rs. 6000 per month and make it sustainable. As an immediate measure Govt. should allot more fund to increase the minimum pension under EPS-1995. Stop investing EPF funds in share market. The Supreme Court has given a judgment and order for higher payment of pension under EPS – 95. This option should be made available for all workers covered under the said scheme, whether exempted or un-exempted.  

The unanimous recommendations of the CBT members representing employers and workers in respect of the functioning of EPFO should be implemented.

• ESIC: Government did not honour workers views and reduced the contribution of employers & workers from 6 percent to 4 percent. The share should be raised to earlier level again and the adequate services be provided to insured persons and ESI service must be extended to all yet- uncovered geographic locations with adequate infrastructure.  During the pandemic, ESIC Hospitals were taken over for treating Covid patients, leaving IPs to fend for themselves, while private hospitals shut shop saying they could not bear the expenses and the resultant loss! The employees of the ESIC, manning core services, are denied many labour rights, such as permanency, annual bonus etc. This needs to be corrected.

• Pension for all: Pension should be construed as deferred wage and all workers who are not covered by any pension scheme should be ensured a pension not less than Rs 6,000/- per month and the Government should give budgetary support for this.

• New Pension scheme: NPS should be withdrawn. All central and state government employees recruited on or after 01.01.2004 should also be covered under the Old Pension Scheme under “defined benefit system”.

• Gratuity: Gratuity under the Payment of Gratuity Act should be calculated on 30 days wages instead of 15 days per completed year of service, without any ceiling.

• Aadhaar: Government should not make AADHAAR linking compulsory.

• Closed and sick factories: Ensure that workers of closed factories get their dues within a fixed time limit. Sudden winding up of the BIFR has left many stakeholders without a remedy. Rules for carrying out the provisions of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, should be framed immediately to facilitate them.

• Income tax exemption: The ceiling for income tax for salaried persons and pensioners should be raised to Rs 10 lakh per year. Income Tax ceiling for senior citizens should be raised to Rs. 8 lakhs. All perks and fringe benefits like housing, medical and educations facilities and running allowances in railways should be exempted from income tax net totally.

Stop Political funding under Electoral Bonds Scheme: Recently the government removed the limit on the amount companies can donate to political parties and the need to name the political party receiving the funds. This is far from the transparency promised in public life. The electoral bonds scheme should be immediately scrapped. It is leading to wide scams.