Bureaucratic character of welfare provisions

From its inception, ITI readily assumed overall responsibility for the well-being of its employees. The centrepiece of its initiative was a spacious, well-planned township, capable of housing around 1,700 employees and their families, and equipped with a fully fledged hospital, a school for resident children, playgrounds, and other recreational facilities.Footnote ³⁰ All medical treatment delivered at the hospital was free of cost (both to township residents and other employees) as was schooling. To assist employees in emergencies and other unforeseen circumstances, management also established savings-and-loan associations.

At the same time, it subsidized transport services, distributed low-cost meals, free uniforms, as well as a raft of fringe benefits and cash advances destined for various purposes such as festival expenses, children's education, and the like (see Annex A). Introduced either directly by management or in response to union demands, the various welfare measures were progressively implemented over a period of roughly three decades. For example, advances for vehicle purchase were granted from 1956 onwards; four years later a canteen was established; in 1971 a production bonus system was initiated, followed in 1976 by a family planning incentive. During the initial years of the factory's existence, many of these perks could plausibly have been viewed as a social wage designed to compensate for relatively low levels of monetary remuneration. But this interpretation no longer remained valid from the early 1970s onwards when collective bargaining agreements yielded regular pay increases.

Two features of the ITI social safety net merit emphasis. First, in tune with the overall style of functioning of the public sector, the provisioning of social needs in ITI tended to be extremely bureaucratic and impersonal in character.Footnote ³¹ The distribution of benefits was in no way subject to the personal discretion of managers. Instead, workers’ entitlements were rigorously encoded by the personnel department in an elaborate framework of rules and regulations. This had the effect, intended or otherwise, of transforming unilaterally instituted benefits into de facto contractual guarantees without the union or workers having to exert any pressure.

Suspicions of irregularities surfacing at the level of individual shops or departments, where officials and foremen might have been expected to act arbitrarily, show favouritism or demand bribes, are also not borne out by the evidence at our disposal. Company records contain few complaints from workers and/or their representatives accusing superiors of twisting regulations to suit their interests and convenience. Nor did this issue crop up during discussions with the union and employees. One plausible explanation for this surprising situation is that ITI was a publicly owned company, and as such answerable to a host of watchdog bodies, its top management strove to avoid all accusations of impropriety in the administration of the welfare system. Workforce-related grievances generally tended to attract far greater public attention, and consequently criticism of management, than did production and allied operational problems.

Second, the distribution of corporate largesse at ITI rested on relatively egalitarian and inclusive foundations. Scholarship in this domain has shown that the scope of employer social safety nets did not always cover all sections of the workforce uniformly.Footnote ³² Skilled, older male workers of native origin together with those deemed reliable and/or obedient by employers were quite often the primary or sole recipients of extra-wage incentives. In contrast to this restrictive focus, at ITI the ambit of welfare facilities covered the entire permanent workforce. Barring certain advantages, such as gratuity and soft loans for home ownership where a minimum length of service was necessary, none of the others had any eligibility conditions attached to them. Welfare services once introduced were also never suppressed, even when their provision was not compulsory under the law. Monopolistic privileges meant management could easily afford such displays of generosity, at least until the advent of economic reforms in 1991.

True, the advantages of company-built accommodation and free education at the ITI school were available only to a fraction of the employees. At the peak of the Bangalore plant's strength in 1980, for instance, no more than 10 per cent of the total workforce lived in the township. These figures could perhaps suggest a more qualified assessment of the inclusive nature of the ITI welfare programme. However, non-township residents were hardly discriminated against. They received a monthly house rent allowance (which was deducted from the salaries of township residents) as part of the overall pay package, besides being eligible for soft loans to construct their own house.

Rules restricting some cash benefits (vehicle purchase, annual advance, and leave encashment) only to those employees who met the prescribed attendance norms were never enforced. Nor were employees with poor disciplinary records penalized in any manner.Footnote ³³ Families of workers living in the township were not neglected either: health care and birth control programmes, as we shall discover, targeted all household members while a company-run school in the township dispensed free education to residents’ children (non-residents were paid an education allowance for their children).

Paradoxically, the only category to be excluded from this protective embrace was the one most in need of it, the casual workers. However, their numbers were relatively insignificant even during the post-1991 reform era when public and private sector firms alike embarked on a massive casualization drive in a bid to exploit cheaper labour costs.Footnote ³⁴ For ITI this did not represent a viable strategy option: a near-empty order book meant that non-permanent workers would have often remained just as idle as regular hands. Casual labourers thus rarely averaged more than 3.5 per cent of the total workforce at any given time at the main Bangalore factory.Footnote ³⁵ So leaving aside the employment contract, other discriminatory markers grounded in trade, gender, age, ethnicity, or personal conduct played no role whatsoever in specifying the beneficiaries. Once again we can see the crucial bearing the legal status of ITI had in determining its obligations. As a state-run enterprise, it had at once to ensure that its social provisions were spread as equitably and broadly as possible, and to guarantee free and fair access to these provisions.

As well as a potent safeguard against managerial arbitrariness, the bureaucratic operation of the welfare package had another important consequence. In conjunction with state ownership, and the rapid turnover of chairmen, it prevented officials from invoking conventional family imagery with a view to dissolving hierarchical divisions and fostering greater worker allegiance to company objectives. Whereas private firms, irrespective of their size, could try and elevate the proprietor or boss to the position of paterfamilias, provider, and benevolent protector of the interests of all those gathered under his wing, the very nature of the public sector militated against such a strategy. Not only were these enterprises defined as the property of the nation at large, but the locus of authority, resting as it did outside the enterprise in the hands of the administrative ministry rather than management, impeded efforts at cultivating a paternalist ethos.

Indeed, several of the workers I interviewed were firm in asserting that non-wage benefits were not a gift or a concession from management. Instead, they claimed them as their legitimate right or entitlement because, as they pointed out, the public sector belonged first and foremost to those who spent their lives contributing to its development.Footnote ³⁶ Worker perceptions of free uniforms, vehicle purchase advances, and so forth as their rightful due also stemmed from the fact that these advantages represented an inherent component of the overall employment package and carried the force of legally recognized rights as they came to be progressively incorporated in collective bargaining agreements which were ratified by the government.

In other words, in the context of a state-run enterprise, social welfare entitlements were defined by anything but their exceptionality; on the contrary, they were firmly grounded in a bureaucratic structure of industrial jurisprudence.Footnote ³⁷ It is worth noting that this embedding of social provisioning in contractual regulations is also what differentiates it from the notion of customary rights as defined by Eric Hobsbawm, that is, rights endorsed not by the sanction of the statute books, but by the ‘sanction of precedent, social continuity and natural law as expressed in history’.Footnote ³⁸

This said, claims to welfare as their legitimate due did not preclude the first generation of workers in particular, who joined the Bangalore plant during the first 15 years of its existence, from invoking the ma-baap (mother-father) idiom. Their sense of obligation and loyalty towards the company for having made them a ‘respectable member of society’, by providing them with a job despite lacking ‘even a high school certificate’, often expressed itself in the familiar terms of filial gratitude.Footnote ³⁹ As one operative spontaneously told me, ‘I might have some complaints against ITI, but it is like my mother. On holidays when I go past the front of the factory, I automatically bow my head in gratitude (sic) . . .’Footnote ⁴⁰ What these lines reveal is that generational differences are likely to have played a considerable role in moulding workers’ perceptions of the corporate social security net, so much so that no straightforward conclusions can be drawn on this point. Entitlements or justly deserved for some, completely decoupling company-delivered welfare protection from the gift-counter-gift principle might have proved a more complicated exercise for others.

Welfare policies target township residents’ bodies

The impersonal character of the welfare programme, built essentially around subsidized services and the cash nexus, did not mean it was completely unintrusive. Certainly, the company did not strive to use its personnel policies to reshape workers’ dispositions so that they conformed to some imagined ideal of the ‘committed worker’. As the overall architecture of the benefits package illustrates (see Annex A), it was largely free of moralistic or manipulative intent. Individual and monetized forms of security took precedence over ‘soft’ or in-kind services and group uplift. We know from the historical record that it was these latter perks, offered collectively, which typically served as the Trojan horses by which employers sought to exercise control over their workforces. In other words, social control imperatives by and large took a back seat to the primary goal of bettering employees’ material conditions.

Nevertheless, there were two distinct areas, both touching predictably enough on health or bodily issues, where the welfare scheme at ITI definitely impinged on workers’ intimacy. The first concerned the prevention of a variety of epidemics within the township, the second involved family planning where management threw its weight enthusiastically behind government policies, as discussed below.

At regular intervals, but particularly following the outbreak of diseases like smallpox, typhoid, cholera, diphtheria, and so forth in areas neighbouring the ITI township, circulars were issued informing township residents of the launch of vaccination campaigns and urging them to get themselves and their families inoculated as soon as possible. Auxiliary medical personnel from the ITI hospital made house visits in order to ‘intensify propaganda regarding paramount need for preventive vaccinations. . .’(sic)Footnote ⁴¹ They were also instructed to maintain records on each family so as to ensure that all household members were vaccinated. A specially equipped clinic for infant children started functioning later in the hospital where women doctors gave employees’ wives advice on baby care and vaccinations.Footnote ⁴²

Yet these precautionary measures remained inadequate. A circular dated January 1963 noted that despite the ‘repeated publicity’ given to fighting whooping cough, it was a ‘pitiable thing to see babies and small children suffering from this disease’, especially when the ITI hospital had ample stocks of the vaccine.Footnote ⁴³ More alarmingly, in 1966, twelve cases of smallpox were reported among children living in the township, six of which proved fatal. In the wake of these deaths, after pointing out that quite a few children had still not received even primary vaccinations and that it was essential they did so in the interests of all residents, the company said it would be compelled to take action against those who disregarded this warning.Footnote ⁴⁴

The nature of these sanctions, however, went unspecified. Two years later, when announcing the start of a new house-to-house vaccination drive as part of a national effort to eradicate smallpox, management again felt it necessary to repeat this threat.Footnote ⁴⁵ Whether it did so as a mere formality or because of continued resistance from certain employees is a matter of conjecture. Going by the records, though, the township seems to have been spared epidemic attacks thereafter, proof perhaps of the efficacy of the sanitizing policies pursued by the company.

An even deeper intrusion into workers’ private lives related to the measures adopted by ITI to promote birth control. With the perils of unbridled population growth a recurrent theme in government discourse, and with official reports exhorting employers to make family planning ‘part and parcel of labour welfare activities’, a good deal of attention and resources was devoted to this question from the outset.Footnote ⁴⁶ For, as the company reminded employees, ‘family planning stands not merely for the limitation to the size of the family, but for the health, happiness and prosperity of the family as a whole’ (sic).Footnote ⁴⁷

To achieve this goal, the ITI hospital conducted sterilization operations free of cost for male employees and their wives, and for female employees. A special family planning clinic was opened inside the hospital staffed by both female and male doctors to advise employees and their wives. During the course of their house visits, the pace of which was significantly stepped up from the mid-1960s onwards, paramedical staff handed out ‘motivational pamphlets’ specifying the cash and other incentives awarded by both the government and the company.

A register of all eligible or target couples residing in the township was also maintained in accordance with the instructions of the health and family planning ministry.Footnote ⁴⁸ Educational visits to the factory by personnel from the family planning clinic soon became a daily occurrence. In December 1966, as part of the ‘Family Planning Fortnight’ activities, which were celebrated throughout the country, the company screened educational films daily at various locations in the township, plied employees with condoms and oral contraceptive pills, and bombarded them with a steady flow of slogans and announcements through the public address system during the lunch break.Footnote ⁴⁹

With the Indira Gandhi regime placing fertility control high on its list of priorities in the aftermath of the imposition of a state of emergency in 1975, ITI predictably enough announced that it would be intensifying its family control programme. ‘It need hardly be mentioned that in a country like India, keeping an eye on the birth rate is as essential as planning for more food and more goods.’Footnote ⁵⁰ A family planning committee which included union representatives was constituted and a questionnaire distributed to all employees to collect information regarding their family situation and size. To what extent ‘every employee . . . filled up the questionnaire without fail’ and what purpose the questionnaires really served remains unknown.Footnote ⁵¹ Nevertheless, we may presume that much like the registers maintained on target couples in the township, the responses to the questionnaire helped the company establish a list of potentially ‘sterilizable’ candidates.

At the same time, much publicity was given to different government initiatives such as the organization of vasectomy camps and exhibitions. With the national Family Planning Fortnight now enshrined as an annual fixture, theatre shows and discussions, involving worker representatives, union leaders, and public officials, were arranged both inside the factory and in the township. For the year 1975–76, ITI boasted of having exceeded all the family planning goals fixed by the health authorities, performing in particular 100 sterilizations as against the target of 80.Footnote ⁵² For vasectomy operations, it paid compensation of Rs 150 and for tubectomies Rs 110, besides granting a week's leave. As a further inducement, it promised a special increment, varying between Rs 200 and Rs 300, to all employees younger than 50 who had three or fewer children, and who had agreed, or ensured their wives had agreed, to be sterilized.Footnote ⁵³

Even after the withdrawal of the state of emergency, management continued to energetically champion the cause of birth control.Footnote ⁵⁴ In one circular it declared that public enterprises ‘should play a vital role in motivating employees to accept the concept voluntarily in their own interest and in the interest of their children, as well as in the larger interests of the Nation’.Footnote ⁵⁵ This ‘vital role’ prompted it to announce a reward of Rs 100 for workers over and above the sum of Rs 175 that the government had already proposed to give in order to attract sufficient volunteers for a family planning camp organized in October 1984 in the township.Footnote ⁵⁶

Whether or not this and the other measures devised by management succeeded in converting employees to the credo, tirelessly reiterated by the official propaganda, that a ‘small family is a happy family’ is a question difficult to answer in full. Given the gaps in the sources, all that is clear is that 2,757 employees out of a total of about 8,000 were still receiving the small family increment in July 2000. The statistical information available on the number of sterilization cases also shows that the ITI hospital performed 682 operations between 1976 and 1979; a further 561 sterilizations were carried out between 1989 and 1990, and between 1994 and 1995.

More to the point, out of this total of 1,243 operations, nearly 95 per cent were tubectomies.Footnote ⁵⁷ In other words, those willing to be sterilized were not male employees, but their wives, and female employees. The above figures speak volumes for the gender bias embedded in family planning programmes across the country. Because of the stigma attached to vasectomies, an upshot of the coercive methods applied by the Indira Gandhi regime during the Emergency, when men were forcibly sterilized, government officials primarily targeted women, despite being aware that tubectomies tended to be more expensive, more complicated, and riskier compared with vasectomies.Footnote ⁵⁸

There is no doubt that these experiments in social engineering designed to produce healthier and smaller worker families represented a profound intrusion into employees’ intimate lives. On the other hand, it must be remembered that only a relatively small fraction of the factory population experienced the impact of these measures, namely township residents. At the peak of the Bangalore plant's strength in 1980, for instance, no more than one in ten workers lived in the township. The design and implementation of the company's family planning policy was also free of all coercive intent. In distinct contrast to the forced sterilization excesses of the Emergency years, all those who underwent operations here did so of their own volition.

At the same time, it is worth recording that the ‘regimes of justification’ mobilized by ITI to legitimate its violation of workers’ privacy both with respect to the eradication of contagious diseases and birth control, pertained to the ‘civic world’ as opposed to the ‘industrial world’.Footnote ⁵⁹ It was not with an eye to achieving productivity increases that these actions had been undertaken. Instead, they stemmed from a concern for the greater ‘good’ of each worker family, the local township community, and the larger community of the nation. The company itself stood to gain little directly from the measures it sought to push through.

Outside of this realm of ‘body power’, we do not find any other overt moves on the part of ITI to restructure the lifestyles of the township's inhabitants. Management officials remained by and large respectful of their privacy. No form of surveillance was exercised over workers and their families, nor were any restrictions imposed on their movements.Footnote ⁶⁰ Their leisure time was also very much their own, totally preserved from company interference. If the periodic organization of good housekeeping and gardening competitions furnished an occasion for company executives to inspect living spaces and check whether or not workers complied with regulations, participation in such events was wholly voluntary.Footnote ⁶¹ Malaria control measures gave management another pretext to scrutinize domestic conditions since all houses were sprayed daily with anti-mosquito insecticide by the maintenance department. Cost-cutting constraints, however, put a stop to this practice, the task being entrusted directly to residents who were provided with the materials.Footnote ⁶²

As a top union delegate remarked, not without reason,

This is an opinion confirmed by one long-time township resident:

While company security guards frequently intervened to settle neighbourhood disputes or family quarrels, they seldom set foot inside workers’ houses without permission. Workers guilty of mistreating or neglecting their wives were sometimes interviewed by welfare officers and either verbally warned or charge-sheeted when the offence was considered to be serious. Thus following a complaint from Venkamma that she was being harassed by her husband, Byranna, and his concubine, a charge-sheet was issued to him. Interestingly, five of Byranna's neighbours also submitted a signed petition to management where they accused him of ‘beating and torturing’ his wife and urged it to ‘take necessary corrective action’.Footnote ⁶⁵ Alcoholics were also sporadically called in and advised to mend their ways. Nevertheless, going by the available records, the counselling cell in the personnel department does not appear to have suffered from overwork. This suggests that the company, unenthusiastic about reforming workers’ morals, was not too keen to interfere in their domestic affairs, preferring the local police to handle such problems.Footnote ⁶⁶

The self-restraint exercised by ITI officials appears quite surprising. Personnel departments at other big public and private enterprises such as the Bhilai Steel Plant and the Tatas had far fewer qualms about prying into the domestic sphere, refusing to prioritize the provisioning of social needs over the imposition of new moral codes and sensibilities.Footnote ⁶⁷ So why did ITI decline to adopt similar practices? The answer can perhaps be traced more to an interweaving of spatial and social considerations than ideological ones. Writing about the pressure exerted by the personnel department at Bhilai on bigamist employees to get them to mend their ways, Parry rightly argues that managerial interventionism stemmed from a melange of ‘paternalistic Nehruvian modernism’ and the desire to uphold traditional, middle-class Brahmanical family values.Footnote ⁶⁸ To these two determinants, ideological in nature, he could have added a third, namely geography.

Situated in remote rural areas, Bhilai and Jamshedpur, the city established by the Tata family, bore close resemblance to the archetypal company town where a single employer, by virtue of the fact that it monopolizes the most desirable employment opportunities, is in a position to exert considerable influence over workers’ professional and personal lives as well as over the affairs of local governance. Such control was likely to have been even greater in some, but not all, state firms where customary rights ensured that jobs were like a family inheritance being handed down from one generation to the next.Footnote ⁶⁹

None of these factors applied in the case of ITI. An examination of recruitment records throws up no evidence of a formal or informal corporate policy systematically privileging the second generation during the hiring process, the sole exception to this rule being the dependants of workers who had died in service (even this measure ceased after the enforcement of a recruitment freeze in the early 1990s). More significantly, ITI's location in a metropolitan centre not only meant, at least in theory, that its workforce enjoyed access to alternative employment avenues. It also meant that the ability of management officials to determine whether workers’ worldviews and actions conformed to the company's interests was likely to have been checked and challenged by a host of competing forces, be they political parties, trade unions or cultural and religious organizations.

Workers could have turned to these countervailing forces to help them resist attempts on the part of management to intervene in their private affairs far more easily than might have been the case in a company town where local political and civic institutions were likely to have been no less reliant than the workforce on corporate patronage for their well-being, thereby undermining their scope for independent action.Footnote ⁷⁰ It would therefore be safe to state that the ties of dependency sustaining management-worker relations at ITI did not run as deep as they did at Bhilai, Jamshedpur or Durgapur, which in turn could have exercised a restraining influence on managerial behaviour.

Workers subvert welfare benefits

At the same time, township residents fully capitalized on lax administration to contravene the rules of conduct and carve out greater spaces of freedom for themselves. Though houses had to be vacated within three months of an individual leaving the company's services, employees and/or their families stayed on for much longer periods, often even without paying rent, due to official negligence. A list drawn up by the personnel department in January 1997 referred to 24 cases of extended occupation (an earlier estimate had placed the figure as high as 100) by workers, one of whom had retired as early as June 1994.Footnote ⁷¹

Subletting of houses, another proscribed practice, was not uncommon either. In one such instance, we learn that Pilappa, a telephone division operative, not only infringed rules by concealing ownership of a house in the city when being allotted company-built accommodation; he also set up his second ‘wife’ in the township while he himself continued to live elsewhere with his first wife and children.Footnote ⁷² A few workers even converted their houses into temporary brothels leading to police searches and arrests.Footnote ⁷³ Others opted to run more respectable business ventures (travel agencies, crèches, tailoring, photo processing, sofa repair, petty commerce, etc.), but which were no less proscribed.

Virtually every shopkeeper who leased commercial space in the township was paying rent several months late, and one of them had decamped without settling arrears of Rs 15,615.66.Footnote ⁷⁴ Officials from the ITI sanitation department railed incessantly against the poor hygienic conditions prevailing in the hairdresser's but to little avail.Footnote ⁷⁵ Workers, no doubt emboldened by the fact that offenders invariably escaped punishment, repeatedly flouted regulations prohibiting the keeping of cows, goats, and chickens; constructing additional fixtures to houses or parking commercial vehicles inside the township.

Company officials, for instance, turned a blind eye to the installation of a makeshift shrine dedicated to Adiparashakti, a fertility divinity, by a worker in his front courtyard. Though the presence of the shrine caused some amount of disturbance as it attracted crowds, it was pulled down only after the worker's death and his family's departure from the township. A group of residents who put up a statue of Vinayaka (one of the several names bestowed on the god Ganesh) on a vacant plot of land, however, enjoyed less luck; they were ordered to remove it, albeit not immediately.Footnote ⁷⁷

The township administration's lack of apprehension of incurring divine and human wrath on this occasion perhaps stemmed from the fact that the statue was erected on ‘public’ company property rather than on ‘private’ space inside a worker's house as in the case of the Adiparashakti shrine. Permitting the Vinayaka icon to stand, one official document warned, would inevitably trigger demands from other religious communities for similar concessions. On the whole then, Dooravani Nagar, as the locality was baptized, could hardly be likened to a feudal company town where an omnipotent management imposed its writ on the inhabitants by controlling all aspects of their lives.Footnote ⁷⁸

Moreover, after losing a long-running battle with local government authorities, ITI was also forced to surrender the administrative powers it exercised over the township whose juridical status underwent a change in 1992. From a ‘notified area’ directly administered by the company, which had successfully lobbied to shut out outside interference from ‘uneducated and faction-minded’Footnote ⁷⁹ elected officials so that it could run things as it saw fit, Dooravani Nagar finally passed under the formal jurisdiction of the Bangalore City Municipal Corporation.Footnote ⁸⁰ Complaining of the consequences of this decision to state authorities, management wrote that since the municipality was distinctly unlikely to ‘provide any facilities or civic amenities’ to township residents, ITI would have to continue assuming this responsibility even as it paid extra taxes.Footnote ⁸¹

Township residents were not alone in misusing the welfare benefits extended by the company. Other employees behaved in an identical fashion as well. Quite a few of them attempted to pass off non-family members as dependants so as to avail themselves of free medical treatment or at concessional rates. One worker was dismissed after having fraudulently admitted the wife of a washerman to the ITI hospital, claiming she was his sister.Footnote ⁸² Another worker was found to have passed off the son of a retired colleague as his own child.Footnote ⁸³

A far more widespread occurrence was the misuse of soft loans disbursed by the company either as aid to reconstruct employees’ houses damaged in natural disasters or to purchase a two-wheeled vehicle. By the early 1990s, sums as high as Rs 9,500 were advanced towards the acquisition of a motorcycle or scooter. To prove that they had spent the money for the stated purpose, employees drawing these advances were required to produce documents within a stipulated period of time. A number of them, however, failed to do so and appropriated the cash for other ends. In such cases, apart from recovering the money in accelerated instalments and charging penalty interest rates, management punished offenders by postponing their annual increments. The sanctions, though, were unsuccessful in dissuading individuals from breaking the rules. For even under these conditions, borrowing money from the company was an infinitely simpler and less expensive affair than it was from banks or the local moneylender.

Workers also went to great lengths to try and exploit the leave travel concession scheme to their advantage. Under the terms of the scheme, all workers and their dependants were entitled to first-class train travel once every two years to their home town and once every four years to any destination in India, the fares being paid in full by the company, subject to certain conditions. This benefit had been introduced, noted the company, ‘. . . so that employees after their hard work can take leave and spend the same leisurely by visiting many places of religious and also of tourist resort with their families so that monotony of work is released’ (sic).Footnote ⁸⁴ Subsequently, workers not availing themselves of the facility were permitted to cash it in. While several people chose this option, others sought more profitable but questionable alternatives.

According to the company, 651 instances of abuse had already come to light in the seven years following the implementation of the scheme in 1974.Footnote ⁸⁵ Some infringed the rules by putting the cash advance allotted for purchasing train tickets to other uses. Others furnished false railway ticket numbers or receipts when asked to corroborate having undertaken the journey. Yet others submitted fraudulent claims with respect to their families. Thus one worker inflated the size of his family, drawing money for three children when in reality he had only two.Footnote ⁸⁶ Another filed a claim for seven children, but omitted to mention that two of them were already married and therefore no longer qualified as dependants.Footnote ⁸⁷

In their ploys to hoodwink management, employees were sometimes abetted by more enterprising colleagues. From the security department records, we learn of the dismissal of Babu, a machine tender, who had collected kickbacks amounting to nearly Rs 7,000 from eight workers. In return, he not only supplied them with authentic train ticket numbers, obtained through his contacts in the railways, but made sure that their leave travel payments were cleared by, what he called, his ‘friends’ in the factory administration department.Footnote ⁸⁸ Similar rackets were operated by other workers too, who, unlike Babu, apparently had few scruples about supplying their clients with fictitious ticket numbers. All these examples attest to the wide variety of ways in which certain sections of the workforce appropriated and subverted the social benefits provided by the company, putting them to radically different uses than those for which they had been intended.

High financial costs of welfare provision prompt cutbacks

Company size, market configurations, and the overall economic scenario all have a decisive bearing on the distribution of corporate largesse. Not unsurprisingly, therefore, the advent of neoliberal reforms in 1991 triggered significant transformations in corporate policy orientations. Companies hitherto renowned for their commitment to corporate social responsibility such as the Tatas and Bhilai seized this opportunity to dismantle the internal welfare state they had established, even when, as in the case of Bhilai, bottom-line constraints were absent.Footnote ⁸⁹

Prior to 1991, a determining factor in ITI's ability to offer its workforce an extensive range of services and facilities was its exclusive market power which endowed it with considerable financial resources. Protected from all forms of internal and external competition, its position was further bolstered by the expanding and unbroken demand it enjoyed for its products. This in turn greatly facilitated the allocation of even greater sums of money for welfare programmes. Only a large, profitable company like ITI could, first, generate the capital needed to construct physically substantive amenities such as a company town, a hospital, a canteen, or to acquire a fleet of buses to transport workers to and from their homes and, then, meet the constant operating costs. The telecommunications manufacturer, for instance, maintained a fleet of over 70 buses and covered a radius of 50 km, penetrating even beyond the limits of the city corporation. Monopoly privileges thus coalesced with an enviable tariff structure for its products and buoyant market conditions to furnish the material preconditions for sustaining generosity.

This underlying economic logic becomes all the more transparent upon examining the statistical evidence. Between 1967–68 and 2000–01, data for the intervening years being unavailable, spending on extra-wage incentives at the main Bangalore plant of ITI amounted to a massive Rs 2,963.2 millionFootnote ⁹⁰ while per capita expenditure averaged Rs 7,246.80. Annual investments jumped from Rs 6.87 million in 1967–68 to Rs 44.52 million in 1979–80, and then to Rs 137.21 million a decade later before reaching Rs 175.78 million in 2000–01 (see Annex B). Paradoxically, the welfare benefit least appreciated by employees—the ITI hospital, widely denounced for providing very poor quality service—was also the one which absorbed the lion's share of the money (see Table 1). The progression in per capita costs was equally impressive: between 1967–68 and 1979–80, the figure rose fourfold to reach Rs 2,283.5; a decade later it stood at Rs 8,378.7 and then shot up to Rs 24,339.5 by 2000–01 (see Annex B).

Table 1

ITI Bangalore welfare expenditures (1967–68 to 2000–01)⁽ⁱ⁾

i) Figures pertain only to non-mandatory benefits and do not include any capital expenditure.

ii) Percentage figures in brackets indicate share of total expenditures.

(Source: ITI Personnel Dept.)

The aggregate picture, though, concealed important variations from one chronological period to another, particularly with respect to annual investments. While expenditures under this heading certainly registered a tremendous increase in absolute terms over the three decades odd as a whole, a distinct waning in the company's enthusiasm and support could be discerned from the 1990s onwards (see Table 2). In the first phase from 1967–68 to 1979–80, funds channelled into welfare rose more or less steadily with average yearly increases of 16.4 per cent.

Table 2

Welfare spending growth rates at ITI Bangalore

(Source: ITI Personnel Dept.)

A more or less similar trend prevailed in the following decade, though growth slipped to 12.7 per cent annually, which in a way was only to be expected as investments had already climbed to fairly high levels by now. The years from 1990–91 to 2000–01, however, not only witnessed sharp swings in spending patterns from one year to the next, but a dramatic contraction in the volume of investment: growth rates for this period averaged a meagre 2.8 per cent per annum. With the advent of competition and the attendant financial crisis faced by ITI, management sorely lacked the means to play the role of model employer.

Interestingly, even prior to the removal of all entry barriers to the telecommunications equipment market in 1991, the company had started to explore ways of downscaling its welfare activities, finding the burden of social costs an increasingly onerous one to bear. As early as June 1978, it informed union officials at the Bangalore plant of its desire to stabilize canteen and transport subsidies at existing levels. The union was therefore asked to back plans to charge employees higher rates for these services as well as automatically review rates subsequent to each new wage agreement.Footnote ⁹¹

The management repeated its demand a few years later, but in what would develop into a familiar pattern of declarations chasing inaction, no concrete steps were taken to implement these changes. In February 1989, at the time of negotiating a fresh wage settlement, the company not only renewed its call for a reduction in subsidy levels particularly for canteen services, it also wanted to revise the definition of a worker household in order to restrict medical and leave travel privileges to the nuclear family alone, which, to boot, would comprise only two children.Footnote ⁹²

Once again nothing more was heard of these proposals until April 1993 when the ITI chairman instructed top executives in all units to address themselves to, among other things, the question of mounting welfare expenditures.Footnote ⁹³ Specific recommendations were therefore tabled before the unions with respect to areas where spending had been rising the fastest and where misuse of facilities was suspected: health care, transport, canteen, and leave travel concessions.Footnote ⁹⁴ In the first three areas, at the Bangalore plant notably, the company claimed it was barely able to recover between 2 and 14 per cent of its total costs, and in the case of the township, this was just 16 per cent. It went on to add that, since services like transport, hospital, and canteen were ‘not directly connected with production’, the company ‘would not like directly to get involved in the(se) activities’, or, in other words, that it wished to outsource them.Footnote ⁹⁵

Top executives expressed particular concern about the growing costs incurred by medical insurance because employees were under no obligation to go to the ITI hospital, and could obtain treatment elsewhere. Hence, even as the ITI hospital kept absorbing substantial investments, many of its 200 beds lay unoccupied, and the 30 doctors on its payroll ‘lack(ed) sufficient work’, a reflection of its dismal reputation.Footnote ⁹⁶ Efforts to try and remedy this state of affairs by making outside consultations conditional upon the prior approval of company doctors also proved rather ineffective. Pressured by union officials, the doctors readily gave their consent even when the necessary facilities and expertise existed internally. Other proposals to rationalize the provision of medical care never saw the light of day either, and the threat to outsource certain services remained an empty one.

Reluctant to antagonize the union and the workforce by jettisoning various benefits, which, as the former pointed out, had been ‘provided for the well-being of employees and greatly influence motivation and morale’, the company struggled to contain costs throughout the 1990s.Footnote ⁹⁷ While it succeeded periodically in reducing investments, accomplishing this feat on a sustained basis appeared to have been beyond its capacities. Thus, the figures for Bangalore for the period 1990–91 to 2000–01 reveal a drop in spending only during four years, never consecutively, while registering double-digit growth on three occasions (see Annex B). Despite raising tariffs, canteen subsidies, for example, still worked out on average at almost 80 per cent for non-officer categories in 1999.Footnote ⁹⁸ Water subsidies for township residents stood even higher at 96 per cent.Footnote ⁹⁹

Nevertheless, during the course of wage negotiations in the year 2000, the unions agreed to a certain number of concessions. As a consequence, the company ended the practice of supplying uniforms, and cancelled all leave encashment facilities as well as the education allowance for children. More schemes were axed after management, alarmed by the magnitude of the losses ITI was expected to post that year, declared a financial emergency in January 2003. The festival or annual advance that entitled non-officers to receive a sum of Rs 2,000 yearly was discontinued as was the annual performance award. Transport and canteen subsidies were partly withdrawn, while employees living in the township, in Bangalore at least, were required to pay market rates for water and electricity, though this latter measure would only be implemented a few years later.

At a time when cutting costs on all fronts was imperative for the survival of ITI, curtailing the scope of welfare activities is estimated to have netted economies of around Rs 80 million, or roughly half the overall sum expected to be saved across the different units for the year 2003–04. The results would, of course, have been more satisfying had management succeeded in pushing through the reform of health care benefits as well, notably by augmenting the share of employee contributions. Aware that the unions were in no mood to make further concessions, and unwilling to extract these by entering into a full-blown confrontation with them, it was, however, forced to keep its plans in abeyance.Footnote ¹⁰⁰ So from the foregoing we can see that ITI stopped short of pulling down the social security net root and branch, and retained its fundamental role in the delivery of a broad range of social amenities and services to the workforce. Nevertheless, it strove to reconfigure the foundations on which the different welfare institutions rested, acting to transfer a greater portion of the costs of sustaining them to employees.

Cooperative untainted by scams and scandals

To finance the expansion of its activities, the cooperative relied entirely on internal resources. Additional capital was generated at regular intervals through the introduction of fresh savings schemes to which all members were required to subscribe. Every month workers contributed a minimum of Rs 45 in subscriptions, the sum being directly deducted from their pay packets, though a large proportion was refunded with interest upon retirement or death. Attracted by the promise of higher rates of interest than the nationalized banks paid, workers also increasingly entrusted their entire savings to the cooperative. By the early 1990s, it boasted total assets of around Rs 200 million.Footnote ¹¹³

With its coffers constantly replenished, the cooperative was in a position to steadily expand its range of benefits (see Annex C).Footnote ¹¹⁴ A death and retirement plan, partially paid for by workers themselves, provided Rs 10,000 to the families of individuals who died in service and half that amount to those who retired. In a show of solidarity with employees who, having undergone major operations or suffering from chronic ailments, were forced to go on unpaid leave, the cooperative instituted a medical relief fund, donating up to Rs 5,000 to each beneficiary.Footnote ¹¹⁵ The most substantive financial benefit it offered, though, was a house-building loan. In an interesting reversal of roles, the cooperative offered to underwrite this scheme after the company, citing insufficient funds, had announced its cancellation.

Undergirded primarily by the distribution of hard or pecuniary benefits, the operations of the union-run welfare system shared much the same bureaucratic and impersonal traits as its company-sponsored counterpart. Because loans recoveries were automatically executed through paycheck deductions, the cooperative's default rates were extremely low. In 2000–01, bad or doubtful debts barely totalled Rs 30,000, an astonishingly small sum when set against the cooperative's turnover of Rs 499 million the same year.Footnote ¹¹⁶ To limit the scope for fraudulent practices, cash transactions were kept to the minimum, loopholes in the different schemes were speedily detected and plugged, and accounts were audited annually and verified by the membership. Administrative costs represented less than one per cent of turnover as cooperative officials and staff sought to practise the same virtues of thrift they preached to the membership. All these efforts did not go in vain: from 1978, the ITI cooperative systematically secured the top ‘A’ rating from the Karnataka state audit authorities.

The high standards of performance maintained by the organization throughout its existence thus underlined in no uncertain terms that, when given the chance, workers possessed sufficient skills to govern their affairs independently and competently. As one of the directors declared with justifiable pride, ‘People come from all over India to take our guidance on how to run a cooperative society properly.’Footnote ¹¹⁷ A potent symbol of the union's organizational acumen and resourcefulness, combined with the workers’ sense of reciprocity and desire for self-amelioration, the cooperative fully vindicated the faith members had placed in it, many of whom had turned over their life savings to its care.

Posting profits every year, it not only issued regular dividends to shareholders, initially averaging 9 per cent, and then 12 per cent,Footnote ¹¹⁸ it also earned an enviable reputation for financial rigour and good management. The vigilance exercised by the union leadership, apart from safeguarding the longevity of the institution, ensured that its functioning was neither compromised by financial wrongdoings nor by mismanagement. This was in stark contrast to the vast majority of cooperatives in the country, including one venture in ITI itself, which inevitably tended to be short-lived experiments, chronically in the red, and plagued by embezzlement, corruption, and other woes.Footnote ¹¹⁹

Not all however heard this ‘clear message’, for instances of irregularities did occasionally crop up. After a worker protested against having to repay a loan he had never taken, it was discovered that his signature had been forged by an official.Footnote ¹²¹ Allegations of bribe-taking also circulated against certain officials who helped workers cut through the thicket of government red tape throttling their house construction projects. Similarly, employees applying for housing loans in some cases knowingly submitted fake documents.

Nevertheless, on the whole the union cooperative remained free from any major controversy or scandal. Union executives and workers tended to generally attribute this fortunate state of affairs to the personal integrity of the leadership and Michael Fernandes, in particular, the union president and driving force behind the cooperative. A more satisfactory explanation could perhaps be found in the institutional checks and balances put into place by the leadership, which had the effect of considerably reducing the scope for corrupt practices and mismanagement. Moreover, these formalized safeguards presented the advantage of assuring the survival of the cooperative after the departure of its founders.

To what extent did the union credit cooperative society succeed in offsetting, at least partially, the effects of the cutbacks in welfare spending decided by ITI management from the year 2000 onwards? The data available only allow an indirect answer to this question. What is clear is that the departure of large numbers of workers from the Bangalore plant, following the introduction in 1991 of a voluntary retirement programme by the company in an effort to reduce labour costs, had a major impact on the cooperative.Footnote ¹²² While retired workers could in principle remain on its rolls, the decade 1990–91 to 2000–01 saw membership levels fall by practically half to 8,289 workers.Footnote ¹²³ The erosion of its base obviously took a toll on the cooperative's financial results. After years of uninterrupted growth, in 2000–01 both profits and turnover registered a decline for the first time.

Other statistical details, however, reveal a fuzzier picture. An examination of the number of beneficiaries in 2000–01 of the various benefit and loan schemes offered by the cooperative shows a decrease in some areas and an increase in others compared with previous years. Given these contradictory patterns, drawing definitive conclusions one way or another about its influence becomes a difficult task. But it would be safe to assume that the steep drop in membership suffered by the cooperative could not but have sapped its strength and compromised future growth prospects even as its monetary clout assured it, at least in the short run, a dominant role in the overall welfare distribution system.Footnote ¹²⁴

The foregoing discussion reveals certain parallels between the management and union-sponsored social security nets: in both cases, the precondition for their sustainability or viability was contingent on the exercise of monopoly power by ITI. The absence of competition not only guaranteed the financial resources underpinning corporate largesse, it also allowed for the creation of a large, stable, permanent, relatively well-paid, and unionized workforce. Without this solid base, the source of regular and ever-bigger cash inflows, it is open to question whether the credit cooperative society would have succeeded in becoming the key player that it did in the provisioning of social amenities at the ITI Bangalore plant. Thus, once deregulation inflicted a hammer blow on the entire business model upon which the company and, by extension, the union's fortunes rested, it was only a matter of time before this unique system of dual welfare coverage, where economic and social factors operated in a mutually reinforcing dynamic, began to unravel.