India hit by national strike over economic reforms

BHUBANESWAR/NEW DELHI, India Thu Sep 20, 2012 10:50am EDT

1 of 16. Members of the Communist Party of India-Marxist (CPI-M) shout anti-government slogans during a nationwide strike in Srinagar September 20, 2012.

Credit: Reuters/Danish Ismail

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BHUBANESWAR/NEW DELHI, India (Reuters) - Schools, businesses and government offices were shut in many parts of India on Thursday as protesters blocked roads and trains as part of a one-day nationwide strike against sweeping economic reforms announced by the government last week.

The main opposition Bharatiya Janata Party (BJP) and smaller parties from both the political left and right called the strike to protest against a 14 percent increase in heavily subsidized diesel prices, and a government decision that opens the door to foreign supermarket chains investing in India.

The measures, part of a package of economic reforms aimed at boosting a sharply slowing economy, have triggered a political firestorm. Prime Minister Manmohan Singh's biggest ally, the Trinamool Congress party, said it would pull out of the coalition on Friday unless the reforms were reversed, raising the risk of an early election.

The Confederation of Indian Industry (CII) urged Singh not to yield to the pressure, saying the reforms, long demanded by Indian business leaders, were crucial for economic growth.

"Good economics seldom makes for good politics," it said.

The CII said the one-day strike had cost the economy $2.3 billion in lost production and trade.

It did not say how it had arrived at the figure, but hundreds of thousands of owners of mom-and-pop "kirana" stores, who fear the retail reform will drive them out of business, were reported to have shut for the day in protest. Bigger companies gave staff the day off or allowed them to work from home.

A usually bustling Bangalore, India's IT and outsourcing hub, wore a deserted look as offices and shops closed down and public transport came to a halt. But in Mumbai, the country's financial capital, banks and offices were open as usual.

Across the country, morning commuters were left stranded at train stations and bus stops as protesters squatted on railway tracks and laid siege to bus depots. Supporters of the BJP and other opposition parties also burned effigies of Singh and blocked roads with burning tires.

"If we don't protest now, the central government will eliminate the poor and middle-class families," said Santi Barik as she protested in Bhubaneswar, capital of the eastern state of Odisha.

Government offices, businesses, schools and banks in Bhubaneswar were shut, and similar shutdowns were reported in other cities, including Hyderabad, the IT hub that is home to offices of Microsoft Corp and Google Inc.


In Bangalore, most of the 3,500 staff employed by Intel Corp and 10,000 staff at Cisco Systems Inc were asked to work from home, company spokesmen said. Infosys Ltd and Wipro Ltd gave workers the day off.

On the outskirts of Kolkata, capital of West Bengal, protesters smashed car windows and damaged buses as panic-stricken commuters fled their vehicles, police said. In Bihar state, protesters marched through the streets of the capital, Patna, sitting on buffaloes.

"We will be left with nothing but bullock carts and buffaloes to move around in towns due to frequent hikes in fuel," said protester Punam Devi.

The Congress party-ruled coalition, which has a record of buckling under pressure, partially rolled backed a petrol price increase this year after facing a similar strike.

Some Congress officials have hinted that the 5 rupee per liter diesel price increase could be cut, and a new limit on subsidized cooking gas cylinders may also be raised.

But the Congress party has held firm against calls for the retail reform to be scrapped, despite the threat by Trinamool Congress to withdraw its ministers on Friday - which would leave Singh with a minority government.

Singh is counting on support from two regional parties to prop up his shaky coalition in parliament. But the leader of one of the parties, Mulayam Singh, was among protesters marching in New Delhi on Thursday, underscoring the difficulties Singh will face in pushing forward with his economic reforms.

Finance Minister P. Chidambaram played down suggestions of an early election.

"We have enough friends today. We had enough friends yesterday. So I don't see any reason why you should doubt our stability," he said.

The BJP is seeking to exploit anger against the diesel increase and retail reforms ahead of a series of state elections later this year and national elections due by 2014.

Mom-and-pop grocery shop owners are an important constituency for the BJP. Tiny family-owned kiranas are ubiquitous, dotting densely packed neighborhoods across India. Some of them are walk-in stores but many owners operate out of garages or hole-in-the-wall stalls.

(Additional reporting by Sujoy Dhar in KOLKATA, Mohammed Shafeeq in HYDERABAD, Biswajyoti Das in ASSAM, Henry Foy in MUMBAI and Annie Banerji, Arup Roychoudhury and Ankush Arora in NEW DELHI and Harichandan Arakali in BANGALORE; Writing by Ross Colvin; Editing by Ian Geoghegan and Robert Birsel)

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Comments (3)
tmc wrote:
What’s good for the goose is good for the gander. The US leads the way in free trade, if others don’t follow the whole concept of globalization would fail. Luckily it’s hard to stop a train.

Sep 20, 2012 5:22am EDT  --  Report as abuse
tmc wrote:
What’s good for the goose is good for the gander. The US leads the way in free trade, if others don’t follow the whole concept of globalization would fail. Luckily it’s hard to stop a train.

Sep 20, 2012 5:22am EDT  --  Report as abuse
paintcan wrote:
Why should the mass of Indians welcome foreign Supermarket chains? Can’t they grow their own? The local mom and pops at least keep those people employed. And the foreign chains may make it impossible for them to do that. Can the international chains promise the same thing? Why are people so found of glitzy decorations? The prices for the products on the shelves are paying for all that glamorous ambiance and the “look” of modernity.

The US owned chain (is Shaw’s an international chain?) that moved into the small town I live in, drove the local mom and pops out of business overnight and they are now the most expensive and only grocery store in town. If it weren’t for a wholesaler who opened a “hole in the wall” down the street and can offer some basics a third less than the chain and sometimes more for damaged cans and boxes, my food bills would be much higher than they were even five years ago. The supermarket is fond of faux games and prize giveaways but gets it all back with their overall higher prices. It always amazes me how susceptible people can be for the charms of a pretty facade.

The goose shouldn’t be surprised that the gander may start to peck at the goose. They obviously don’t share the same priorities. The goose doesn’t want any back talk? They are not living in the same world.

There really ought to be a life style course taught in schools for the affluent in what it is like to live on short means. The world is rife with cognitive dissonance: if you can call never having been there and not knowing what low income feels like, cognitive dissonance?

India is not the US or the developed world. None of the developed countries were ever so crowded with human beings and their territory isn’t getting larger. Now that the US no longer has the ever-expandable borders it was still enjoying 100 years ago when it was still adding states to the Union, and the resources rife for exploitation, the game has become very different. How many call centers can hold the aspiring and multilingual educated Indians? If we are supposed to, and will be forced to reign in our spending habits, who is going to buy the aspiring entrepreneurs wares? Africans? They’ll want protection from the Indians too. Some countries should be protected from the relatively unpopulated and so much wealthier countries. It takes so much more to keep the well healed fed and content. The wealthy seem to have enormous appetites for everything and so many of them only regard the customer base as an inconvenience if they can’t afford to shop in the trendy and modern facilities. The average Indian can, apparently, afford to shop in the mom and pops.

Supermarkets tend to need gigantic parking lots too. It is hard to fit big box merchandisers into dense old urban fabrics if they follow the American model. That may mean that those Indians working on a dollar something a day have to go into hock to get a car so they can shop for groceries they used to get on the ground floor of their apartment building. That is, if the needs of the modern development don’t cause them to be evicted. And if anyone thinks my “rant” is too “liberal” try listening to the complaints and concerns and protections demanded by the average suburbanite in a planning board hearing. Some of those people can be the most demanding brats and want security and quality of life protection (including no threat to their incomes and property values) that one can imagine. But they can afford the lawyers.

The big chains can cheat on paying their notes while the mom and pops are forced to pay their rents. It happened here with a Rite Aid.
The protests up here didn’t involve water buffaloes. The threatened pharmacist has since died and the new owners are Chinese.

Sep 20, 2012 2:10pm EDT  --  Report as abuse
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