Trade union strike could cost economy Rs 20,000 crore
A two-day strike called by all major trade unions began today, hitting banking and public transport services, even as the government prepares to present an austerity budget to Parliament and weather a corruption scandal in a big arms deal.
The Budget session begins on Thursday.
The unions are protesting high inflation, a fuel price increase and what they say are violations of labour laws.
The Associated Chambers of Commerce and Industry (Assocham) said the two-day strike was expected to cause an estimated loss of Rs. 15,000-20,000 crore.
"The national economy, battling a slowdown, can ill-afford this situation. In fact, the strike will aggravate the price situation because of a disruption in the supply of essential commodities," Assocham president Rajkumar Dhoot said in a press release.
"Given the nature of the strike and the involvement of all the five major central trade unions, it is going to largely affect the services sector, including banking, financial services, tourism and transportation, all of which are major contributors to the country's GDP," Mr Dhoot added in the statement.
Narsing Rao, head of state-owned Coal India Limited, which accounts for about 80 per cent of India's coal, said output losses this week could touch 4 million tonnes (mt) pushing the company further away from its production target of 464 mt in this fiscal year through March.
"The strike is totally uncalled for and will be destructive," said Chandrajit Banerjee, director general of the Confederation of Indian industries.
Prime Minister Manmohan Singh, grappling with the country's worst economic slowdown in a decade, asked the unions to call off the strike, but talks between a ministerial panel and union leaders broke down on Monday.
"As far as we have seen, the government has nothing to offer to labourers," said Atridev Tiwari, general secretary of Bharatiya Mazdoor Sangh, one of the main unions leading the strike.
"It doesn't matter what the prime minister says now because we cannot rely on his word. He says something and does something else," he added.
The Finance Minister plans to cut the public spending target for fiscal year 2013/14 by up to 10 per cent from this year's original target, in what would be the most austere budget in recent history as he tries to avert a sovereign credit downgrade.
The session is also likely to be disrupted by opposition protests over a $750 million deal for AgustaWestland helicopters that the Defence Ministry is threatening to cancel over allegations of kickbacks.
The opposition (Bharatiya Janata Party) has said the Prime Minister's offer of a debate on the deal is not sufficient, but has not specified how it will respond.
The last two sessions of Parliament were badly disrupted by opposition protests and little business was conducted.
With inputs from Reuters
