Time
to Re-Think ?
Among many problems being faced by India
these days ,are :
>
World - wide slowing down of economy
>
Rapidly rising workforce / unemployed
>
Resistance to Labour Reforms by Unions
>
Chinese currency devaluation
>
Rapid decline in our Exports
Even as Central Government Ministers sit
down today, to listen to ,and address the Charter of Demands of Labour Unions ,
may be they need to articulate , in no uncertain terms , what the Unions must
" Give " , in return for what they expect to " Take "
At this stage , the only thing that can
save our country going the way of Greece , is :
Make India , a " Low Cost Economy
"
I hope what I wrote to 7,500 employees of
L&T Powai Works , some 31 years back , provides some clues
with regards,
hemen
parekh
27
Aug 2015
hcp@RecruitGuru.com
----------------------------------------------------------------------
16 AUG 1984
To: All Employees at Powai Works
-------------------------------------
Dear
Friends :
SCALA - MOBILE ESCALATOR
In America they call it...... COLA
( Cost of Living Adjustment )
In India we call it.......... D.A.
( Dearness Allowance )
But everywhere, it means the
same thing to the employees.
Whenever inflation pushes
up prices in the market, some index
published by the Government will also
rise.
In India, we call it Consumer
Price Index ( CPI )
Whenever C.P.I, goes
up, D.A. goes up,
putting more money in the hands of an employee.
The idea is that even
though the prices may have gone up , with the
extra D.A. in
his hands, he can continue to purchase the same
quantity of articles as before.
Rising prices raise the " Cost
of Living " .
So the experts thought :
"Let us put more money in
the hands of an employee - to take care of
the rising prices - to neutralize the rise in the
," Cost of Living "
In fact, originally this is an Indian
idea
We, in India, introduced it 40
years ago.
Americans and Italians introduced it only a
few years ago.
Italians call it " Scala
- Mobile Escalator ".
Seems like they borrowed the
idea from our own " Escalator-culture " !
Except that they seem to have
discovered something within 5 years (1979-1984) which we have
still not discovered after 40 years . Or do not wish to discover !
Every time D.A.
goes up, " Cost of Production"
also goes up !
And if " Cost
of Production " goes up, " Selling
Prices " must also go up.
( We were forced to raise the
selling prices of our Switchgear Standard products a few days
ago )
If we do not raise our selling prices,
our profits will go down
But nobody likes
profits to go down -
neither the shareholders nor the employees.
So what is the problem ? Just keep raising the selling
prices, whenever costs go up.
But the Italians are thinking :
"No that won't work.
If we wish to sell fertilizer
plants in India, our selling prices must be lower than the selling
prices of the Japanese manufacturers ( who last month gave a YEN 6
billion loan to India, to buy a fertilizer plant from Japan )
And our selling prices must
be lower than those of an Indian company called L&T.
But we cannot force L&T
to raise its selling prices.
All that we can do is to
reduce our costs, by slowing down the " Scala Mobile Escalator "— Down with D.A. !
"
If our Mr. V.G.Desai (Divisional
Manager -Chemical Division ) could hear the Italians thinking, he
would jump-up and say:
" Very dangerous thinking ! "
He means dangerous for us - for L&T
!
Let me assure you, VGD has no love lost for the
Italian workmen !
And with all the
affection he has for our own employees he keeps
gazing at the following chart.
And he wonders :
How the Italians ( even
Japanese ) would love to get a copy of this chart !
Does Indian Industry
have the "Italian Option" ( of stopping or
slowing down the D.A.) ?
If not , can people
of Powai, possibly increase
their productivity quickly enough to neutralize the following increases
in the wages ?
Increase/ Employee
Rs / Month
|
||
A.
|
Jan. 1979 Settlement
(Average)
|
200
|
B
|
D.A.Increase (Jan1979 -July 1984)
|
475 to 1114
|
C
|
April 1984 Settlement (Average)
|
550
|
TOTAL
|
1225 to 1864
|
|
How shall we respond to these
questions ?
h c parekh
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
Make
Yourself Heard
Dear Visitor :
It is time for YOU to speak up - and demand that YOU
are heard
By emailing this suggestion - incorporating your OWN
improvements - to the following Policy Makers
( Just multiple
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