Data show labour unrest is not the problem

As Nokia officially winds down operations, murmurs in the Sriperumbudur industrial belt indicate that trade unionism has become a major concern.

Though Nokia’ downfall has little to do with labour issues as such, the closure of the plant has given credence to “perceptions” of labour activism driving industry out of the State, including suggestions that Apple’s suppliers chose not to make iPads in Chennai.

A historic analysis of strikes and lockouts in the State, however, shows that the labour movement is more malleable to industry than ever before. The number of strikes dropped from 110 during 2003 to 28 last year. The number of workers involved in strike came down by a fifth in the same period.

Though strident unionism is repeatedly cited for Tamil Nadu’s failure to attract investment, labour accounts for less than 10 per cent of the costs even in the most labour-intensive industry, says M. Vijayabaskar of the Madras Institute of Development Studies.

If Chennai has indeed lost out, a more likely reason would be the State’s abysmal power situation, he says. In 2003, the power deficit was less than one per cent, but by 2014, it has risen to nearly 20 per cent. “In a survey of 400 manufacturing units we conducted last year, power and costs due to poor infrastructure were the biggest issues,” Mr. Vijayabaskar says.

Though the proximity of an international airport was one of the primary reasons for Nokia to choose Chennai in 2006, the airport these days consistently makes it to the list of the worst airports in Asia. Besides, two-thirds of the container traffic, flowing through the Indian Ocean, bypasses Chennai and its sister ports.

“The idea that labour unrest has forced industries to close is not borne out by data at all,” Mr. Vijayabaskar says.