September 29, 2005

Strike over reforms hits India’s airports, banks

By M.C. Govardhana Rangan and Surojit Gupta

MUMBAI/NEW DELHI (Reuters) - Flights were canceled and
state-run banks shut across India on Thursday as hundreds of
thousands of people stayed away from work to protest against
economic reforms.

Trading volumes on the country's currency and bond markets
fell to a trickle as bank workers and airport staff heeded the
strike call by the ruling coalition's communist allies.

In Kolkata, the capital of communist-ruled West Bengal
state once known as Calcutta, public transport was brought to a
standstill and factories, offices and schools remained shut.

In Mumbai, India's financial hub once known as Bombay,
about a thousand bank workers carrying union placards marched
from branch to branch shouting "Down with bank mergers!" and
"Down with the government!"

The strike has been called by the United Forum of Bank
Unions, which represents nearly 95 percent of more than 1.3
million bank and insurance workers, and unions claimed early
success, saying no cash transactions were taking place.

"The strike has been successful across the country," said
Kamal Bhattacharya, vice president of All India Bank Employees
Association. "We are against merger of public sector banks,
against disinvestment in state-run banks and allowing
foreigners picking up stakes in old private sector banks."

India has about 300 banks led by State Bank of India and
the Congress party-led government wants some of the public
sector ones to merge and become more competitive but the unions
say fewer bigger banks would not necessarily lead to strength.

Private sector and foreign banks, which do not have many
staff in trade unions, were functioning although some said cash
counters were closed. Stock market trading was normal.

While banks were totting up the cost of the strike, Finance
Minister Palaniappan Chidambaram said it was inconvenient but
its impact on the economy had been marginal.


The ruling coalition, which swept to power unexpectedly in
May 2004, relies on union-backed communist parties for support
but the far left are against greater foreign control of areas
like banking.

In August, the coalition abandoned plans to sell stakes in
state-run firms to strategic investors due to pressure from the
left, which fears massive jobs losses among its core voters.

Analysts said Thursday's strike was a muscle-flexing
exercise by the communist leaders of the trade unions.

"The communists to a great extent have come in the way of
reforms and they will continue to do so," said Saumitra
Chaudhuri, economic adviser with domestic rating agency ICRA.

In New Delhi, riot police monitored dozens of striking
airport employees who gathered outside the domestic terminal
shouting slogans against federal Aviation Minister Praful

"Down, down, down with Praful Patel," they shouted.

The government, which runs India's airports, said the
strike was having minimal impact and the Airports Authority of
India (AAI) said international flights were operating as

But unions said the strike was crippling services in most
of the 78 airports with facilities for commercial flights.
Airlines like Jet Airways Ltd. and state-run Indian Airlines
rescheduled and restricted internal flights.

"The strike is a 100 percent success," said M.K. Ghosal,
general-secretary of the Airports Authority of India Employees
Union. "They (the government) have deployed some air force and
navy personnel ... it is not a normal situation."

Unions are protesting against government plans to set up
two joint ventures to operate Mumbai and New Delhi airports and
offering stakes to foreign firms. Authorities have received 11

In New Delhi's dilapidated domestic terminal, Manjeet Singh
Puri, an airport employee for the last 20 years, said he was
against privatization.

"If they want to build better airports then why can we not
do it?" he said. "Is the airport not already world-class?"

(Additional reporting by Nitin Luthra and Unni Krishnan in
New Delhi, Krittivas Mukherjee in Kolkata and Anirban Nag in