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Power is the most
important component of our country’s industrial development. Government’s
policies determine whether power industries were built with a view to fulfill
the profit motive of a narrow stratum of pro-MNC big business/big capitalists,
or for promoting a self-sustaining pro-people economic development. Here we
briefly discuss the present position of power industries, with emphasis on SEBS,
WB-SEB (West Bengal-State Electricity Board) in particular, so long the premier
power producer in the public sector. Power production under the PSU regime has
been shown to fall into two periods.
The first period
covering the end of the sixties shows how the Indian ruling classes, comprador
big industrial houses in particular, got an extensive network built throughout
the country, of an integrated structure of generation, transmission and
distribution of power at the cost of the state exchequer. This period has also
seen other social classes such as capitalist landlords, rich peasants vying for
availability of power at subsidised rates for their enrichment; and also poor
peasants, marginal peasants, urban and rural poor asserting themselves for
access to this essential input of life. And the governments, both central and
state, have had to accept these demands partially due to pressures from those
social forces and also to satisfy the needs of the vote banks of various
parliamentary political parties.
The second period,
beginning from the mid-seventies till date, marks a reversal of the first
process with the governments gradually adopting policies in regard to
disintegration of unified structures and encouragement to forming separate
companies for generation, transmission and distribution, withdrawal of the
public sector, deregulation and privatisation at the dictates of the World Bank-IMF.
Those measures necessarily accompany withdrawal of subsidies and priorities for
all classes except the pro-MNC big business. This article also examines how
those power policies have an impact upon the scenario of the country’s power
industries, as also upon the service conditions of the working people employed
in the power industries, particularly in the SEB; the working class response to
this deindustrialisation of the power industries as illustrated from experiences
of struggle by a section of WB-SEB employees; the concept of an alternative to
the pro-MNC path of power development, and the need to draw appropriate lessons
by the working class.
lndia’s power industries and WB-SEB’s pioneering role
The Electric (supply)
Act was promulgated in 1948 providing for the creation of State Electricity
Boards (SEBS) and the Central Electric Authority (CEA) with distinctive and
regulatory functions. Industrial policy resolutions of 1956 reserved the
building of power plants exclusively to the domain of the public sector. From
the early sixties, electricity reached every nook and corner of the country. For
this purpose the country has been divided into five power regions. To facilitate
the spread of electrification in the countryside the Rural Electrification Board
(REB) was formed. The entry of the central government was ushered in with a bang
for power generation and bulk transmission activities. The state governments
were thought to be the centre of power production and supply activities, and the
central government was supposed to coordinate and supplement the states’ effort
with emphasis on removing regional imbalances and system optimisation.
Entry
of private investors, domestic and foreign
From the
mid-seventies, governments decided to allow the entry of domestic and foreign
private investors into power production because resources of the public sector
were strained beyond recovery, providing opportunity for imperialist players to
press upon access to this vital sector. New state power units thus began
emerging under the management of autonomous bodies, corporations, whose rules
permit purchase of private equity shares from the capital market to strengthen
their capital base. Conditions further worsened as a result of a deep economic
crisis during the eighties and the beginning of the nineties when public sector
units were sought to be maintained through heavy state subsidy, massive internal
and external loans, and foreign firms supplying the inputs at exorbitant cost to
the people and drainage of foreign exchange. This factor too contributed to the
acute balance of payments to tide over which the government chose to accept
loans from the World Bank-IMF on humiliating terms. The rail on which the Indian
economy had so long been moving forward with limited industrialisation was put
into reverse gear. This is vividly clear in the case of power production under
the SEB dispensation. The following points may be noted:
(i) The vertically
integrated structure is being changed to the formation of separate companies for
generation, transmission and distribution, breaking the unified command. The
Left Front government of West Bengal, though stopping short of wholesale
privatisation like Orissa, has already commenced building new units under
corporation, now opevn to the entry of private equity from the market. In this
way, the West Bengal government has entered into agreement with Japan for the
Teesta Canal Fall project, Purulia pump storage scheme and revamping of the
extra high voltage transmission system including a part of satellite
communication. Japan is also a partner with the West Bengal government in
building the Bakreswar thermal power project in the joint sector; similarly
Rolls Royce, a British MNC, has been collaborating with the government for the
Balagarh and Budge Budge thermal power station, also in the joint sector.
(ii) It is argued
that the structural break-up, corresponding to functional divisions, would
ensure efficiency, equitable pricing and competition as opposed to a big state
monopoly like the SEB. Rather than following competitive bidding, the country’s
private utilities are prone to take project specific loans/assistance from
foreign MNCs specially with IPP experience, consortia of equipment manufacturers
/ suppliers/ external financial agencies. It would result in monopolisation in a
new form.
(iii) Now a few words
about the cost-benefit aspects of the Foreign Investor Power Project (FIPP)
vis-a-vis the public sector SEB.
One of the terms for
FIPPs is that they have to be given a minimum return of 12 percent to 16 per
cent over and above the cost of production for which the concerned state or
central government has to provide guarantee, that it would make up the losses in
case of default by SEBs that produce power from the former. Generally FIPPs
produce electricity at costs that include imported hi-tech machinery, cheap raw
materials, cheap labour power available from the domestic sources, plus a 12 to
16% profit, large chunks of which are transferred to the foreign countries
instead of being reinvested domestically. Computed thus, the prices of power
charged by the FIPPs (Enron for example) comes to Rs. 2.25 per unit with the
year 94-95 as basis. Presently, the rate charged ranges from Rs. 3.20 to Rs.
4.95. Maharashtra SEB run on the basis of some social priorities, fixed the
tariffs at unit cost much less than it receives from the Dabhol power plant
built by Enron. This gap in unit prices amounts to a huge Rs. 5600 crores shown
as subsidies ultimately paid from the government exchequer. This amount
constitutes an outflow of our valuable national resources. Further the SEBs are
forced to work below their plant load factor and to shut down their plants, as
the FIPPs must generate electricity non-stop during the day to maximum their
profits. All these phenomena work to the disadvantage of SEBs in as much as they
are even denied three percent returns according to provisions enshrined in the
Central Electricity Act ’98. The power purchase agreements (PPA) concluded with
the MNCs by the West Bengal Left Front government are deliberately shrouded in
secrecy, and the WB-SEB, purchasing power from the MNCs, has already incurred
huge losses most of which have ultimately to be borne by the people.
Workers’ Response to Globalisation/ Privatisation
Different pay bodies
by the West Bengal State government since the eighties upto date unfailingly
recommended — and subsequently implemented — job freeze and workers-shedding.
Needless to mention that none of the pay-bodies cared to recommend need-based
minimum wage as well as equal pay for equal work. Further to note that all four
pay bodies were led by CPI(M) MPs as well as labour leaders. It was on the basis
of their recommendations that the WB-SEB abolished every basic post
corresponding to a promotion to the concerned higher post. Then again, all
vacant posts automatically stand frozen in case these are either caused by
vacancies arising out of retirements or not filled up within six months. Orders
from the state governments (SEB being an autonomous body) are necessary when
freshers are to be appointed or vacant posts are to be filled up. Previously, to
run a shift required five workers. Now it has been reduced to two per shift. It
is to be noted that one of these packages of anti-labour recommendations by the
Dipen Ghosh Committee is co-terminus with the signing of the Dunkel Draft in
I991. Since Atal Behari Vajpayee and Jyothi Basu have already opted for power
development mainly through the FIPP or joint venture route with central/state
government as a collaborator with MNCs, these have some far-reaching anti-labour
consequences. First, such power plants are in the main capital-intensive
requiring gradual retrenchments, lay-offs, VRS (voluntary retirement schemes)
etc. Second, disintegration and functional divisions being implemented within
the SEBs generally contribute towards retrenchments or reductions of workers
alike. These methods divide and destroy the workers’ solidarity characteristic
of a centrally-planned undertaking. It creates job-insecurity as the workers and
employees fall under different types of employers with different service
conditions. Third, as it is the motto of the World Bank-IMF, there would be
contractualisation and casualisation of labourers in order to reduce wage bills
and achieving substantial down-sizing of fiscal deficits. These phenomena are
also noticed in the case of the WB-SEB. There is a substantial increase in the
number of contract labourers to substitute the work done by regular
workers/employees. Also routine types of jobs of a regular nature, such as
sweepers, farash etc., are being manned by contract workers whole-sale. Still
further, meter reading and bill collections, instead of being done by the WB-SEB
workers as previously, have now been entrusted to the rural panchayats. The WB-SEB
workers have time-to-time launched heroic struggles against these anti-working
class offensives.
The Left Front
government of West Bengal headed by the CPI(M), soon after it took over ofrice
in 1978, took a vindictive attitude towards SEB employees. To begin with, Jyothi
Basu sought to mobilise public opinion against SEB workers with a view to laying
the ground work for privatisation. At that time the scapegoat was the Congress
regime which was charged with unproductive recruitment of about 12 thousand
employees mainly to distribute political favours. Thereafter the Left Front
government unleashed random press statements propagating against the integrity,
capability and efficiency of WB-SEB and its workers in general. In this way,
mass hatred and anger were roused against the field workers whenever there were
power failures. On more than one occasion, these led to attacks on SEB
substations where the masses gheraoed the poor SEB workers for serious cable
faults, for which they were by no means responsible. Other heinous methods
adopted to terrorise the workforce consist in issuance of charge-sheets,
suspensions, dismissals, policing, threats through the press, and so on. The
Left Front government got so panicky with the rising struggles of the workers
and employees that it forced the SEB management to issue a black circular No.
P/457 to curb all sorts of trade union activities including postering in the
office premises. Though before resumption of office the Left Front criticised
the colonial system of CCR (Confidential Character Roll), they themselves, while
in office, introduced a system of PAR (Performance Appraisal Report), which is
no less a handle to the management than the erstwhile CCR
In December 1980, the
Left Front government fired the first salvo of privatisation at the dictates of
the World Bank by handing over the Singur-Haripal Electric supply to a
cooperative. Naturally during this period a sizable section of fighting SEB
workers and employees broke away from the CPI(M)-Ied union that sided with the
Left Front govemment’s each and every anti-labour misdeed. They formed an
organisation of their own to respond to the anti-working class offensives by the
state government. During the eighties two such movements were of significance.
In December 1980, contract labourers at Saltaldil rose in struggle and demanded
regularisation. The SEB management faced this movement taking recourse to an
indiscriminate lathi charge, burning of red flags, and arrest of the concerned
contract workers. The leadership of the rebel union supported this struggle,
and, for a price, some of them were transferred to far-flung places at
gun-point. Another struggle by the SEB workers/employees erupted at the same
time against handing over electric supply to a cooperative. The workers who
protested against this were forcibly driven out of the office in the presence of
CPI(M) leaders. In 1981, hill employees demonstrated and demanded winter
allowance as well as regularisation under the leadership of the rebel union.
This union also organised rallies and processions before the then SEB head
office at Mominpur(Calcutta) in protest against the ESMA (Essential Services
Maintenance Act) as well as the Black circular P/457. Again during 1985, another
agitation of the SEB employees and workers was sparked off under the auspices of
the said union in support of the demand for more man power and the opening of
promotion prospects. The Linesmen of the WB-SEB took a prominent role in this
struggle. The Left Front govemment’s characteristic response to these struggles
during the eighties was brutal repression on the fighting workers in the form of
police arrests and lathi charges, suspensions, charge-sheets, down-gradation in
service and other punitive measures. The employees had a taste of unprovoked
terrorisation when in 1983 about five thousand workers were transferred at
random to the places where there were no posts or work for the respective
workers. In defence of these brutalities inflicted upon the workers, the
government held a press conference stating that the employees thus transferred
were anti-social and involved in malpractice.
An important lesson
to be learnt from these struggles during the eighties is that the rebel union,
formed by the employees who defied the dictates of CPI(M)-led union, faced the
major brunt of state repression. This resulted in the erosion of its effective
strength, which could not be reinforced from the rank of grassroot workers
immunised partly by fear of repression, and partly by the power of distributing
small favours enjoyed by the pro- government union. Even then, the emergence of
fighting unions/associations is a reality given the naked exposure of the pro-MNC,
pro-capitalist bias of pseudo-left parties like the CPI(M), CPI etc. The
vanguard section of the working people should accept the challenge of forming
such fighting organisations wherever the situation demands.
WB-SEB workers’ and
employees’ struggles have gone through a further and deeper polarisation during
the present decade mainly against the CPI(M) which has established its exclusive
political domination over the Left Front government. In 1990, there was an
all-out strike involving 90% of the workers for 48 hours. Again in January,
1999, there was a strike by about 65% workers fighting under the banner of the
Rebel Union, Power men’s Union (SUCI), Sramik Karmachari Union, Bijli Majdoor
Sangha (BJP), Staff Union (CPI) and Employees Union (a section of INTUC). This
strike struggle was organised against reduction of pay, increment and other
facilities in the name of so-called pay revision. Dipankar Mukherjee, a CPI(M)
leader, was in the committee regulating the whole affair. The political
polarisation is now going on along party-lines, and it is quite probable that
some of the aforesaid allies would desert the workers, if the centre (led by BJP
or Congress-led alliances) comes under attack by the struggling forces. The
vanguard of the workers employed in WB-SEB do not accept this dichotomy in the
roles of parliamentary political parties. With the deepening of struggles under
their leadership, the political polarisation along class-lines is bound to take
place sooner or later.
To conclude, we may
touch upon an Indian alternative prepared by a National Group on the power
sector entitled "Current Power Politics-A Critique". We may quote from
it, "the extra resource mobilisation required for the Indian alternative is
only marginally more. If 3% rate of return (ror) on investment is made by the
Boards as prescribed in the statutes, and the Indian savings that are any way
mobilised for the FIPPs are considered, the resource gap for the Indian
alternative hardly exists. With 50% project costs for the FIPPs being raised
through local resources, the resource gap can be seen to be largely illusory."
This alternative is
only tentative. It only shows that all materials including a vast experienced
work-force and engineers really exist to build people-friendly power plants
which face resistance from the Indian ruling classes. Our working people, while
fighting for their service security and rights, must propagate a scientific
alternative to lay out a sound perspective of their struggle.
4-8-99
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