Friday, October 21, 2011

A policy error on Maruti's part

There is continuous problem that has been cropping up at the Maruti's plant. Every now and then they are shutting it down for fairly long period.

But no one, it seems is actually trying to solve the underlying problems they are just playing the immediate game.

To start with the main problem is that temporary workers are paid less and have less amenities but companies prefer them because its easy to issue them pink slips (in other words fire them) when there is a slow down.

This is definitely a skewed system.

The solution would be to pay higher wages (i.e. cash in hand) to temporary workers.

The easiest I could think of was to pay 20% more to temporary workers than the permanent workers. That should even out the playing field between temporary and permanent workers.

Permanent workers get less cash in hand and more benefits plus firing them would be difficult. Meanwhile temporary workers will be paid more because they will have more risk, the risk of losing the job.

Why is the state government not suggesting such simple solution or coming up with a solution that is (a) practical (b) solves the real problem?  A policy problem cannot be solved by signing agreement and playing strikes and suspension.