ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Government Wage Policies in Public Sector, 1947-1982

Since independence the government has striven to adopt wage fixation policies with regard to public sector organised labour. Initially the role was discharged by the judiciary and a while later by a tripartite machinery - the wage boards. However, the setting up of the Bureau of Public Enterprises in the early 1960s signalled a shift to greater centralisation. Despite the bureau's existence as a 'supra-bureaucracy', its attempts to impose wage standardisation and salary restraints, but for a brief period during the emergency years, proved by and large ineffectual.

This paper seeks to provide an historical overview of the wage fixation policies adopted by the Indian state with regard to organised labour in the public sector from the time of independence until the early eighties. More specifically, it examines conditions leading to the creation of the Bureau of Public Enterprises (BPE, now known as DPE or Department of Public Enterprises), and the functioning of this regulatory organ, invested with the task of formulating and enforcing the government’s wage directives for all central public sector undertakings. The paper concludes by pointing out that the bureau was only moderately successful in fulfilling this objective; its relations with public sector managements were characterised by a quasi-permanent conflict of interests and explains why it was often unable to confirm the legitimacy of its commands.

It must be stated at the outset that the unifying element behind government wage policies, giving them a historical and structural continuity irrespective of political contingencies, was the high degree of executive interventionism. Indeed, dirigisme was the logical correlate of the Indian state’s ‘involvement as a constant interventionist participant’ in the broader industrial relations sphere, where it deployed ‘its statutory powers to support its interventions in the subordination of labour’ [Crouch 1977:19, 20]. This, in turn, was the consequence of the primacy accorded to the state in spearheading the overall economic development of the country.

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