VZCZCXRO0554
PP RUEHBI RUEHCI
DE RUEHCI #0525/01 3200920
ZNR UUUUU ZZH
P 160920Z NOV 06
FM AMCONSUL CALCUTTA
INFO RUEHC/SECSTATE WASHDC PRIORITY 1275
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 1139
RUEHBI/AMCONSUL MUMBAI 0448
RUEHCG/AMCONSUL CHENNAI 0446
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC
RHHMUNA/HQ USPACOM HONOLULU HI
RUEHKA/AMEMBASSY DHAKA 0279
RUEHKT/AMEMBASSY KATHMANDU 0279
RUEHIL/AMEMBASSY ISLAMABAD 0215
RUEHCI/AMCONSUL CALCUTTA 1565

UNCLAS SECTION 01 OF 02 CALCUTTA 000525 
 
SIPDIS 
 
SIPDIS 
 
DEPT PLS PASS USTR 
 
E.O. 12958: N/A 
TAGS: ECON EIND ELAB ETRD IN
SUBJECT: LAUNCH OF AN IT WORKERS UNION BRINGS OUT THE SPLIT IN THE 
CPM 
 
 
¶1.  SUMMARY:  On November 14, IT workers formed West Bengal's 
(WB) first IT workers union.  Its creation has exposed fault 
lines within the Communist Party of India - Marxist (CPM) and 
the Left over the role of labor and industrialization.   The 
reforms-oriented Chief Minister Buddhadeb Bhattacharjee and some 
in the CPM are clearly not in favor of militant industrial 
action in the IT sector, a rapidly growing sector in West 
Bengal.  The CPM and its allies were planning a national general 
strike for December 14 to protest UPA policies but Bhattacharjee 
had hoped that the IT sector would be insulated from the 
disruption.  The upcoming general strike will be the litmus test 
for whether the pro-reform faction can shelter this nascent 
industry from economically damaging labor movements.  Worried IT 
industry leaders have been lobbying the administration and 
political leadership.  The developing battle within the Left 
over the unionization of the IT sector will determine whether 
the reformers or hard-line Marxists control the state's economic 
policies.  End Summary. 
 
¶2.  On November 14, the West Bengal Information Technology 
Services Association (WBITSA) became the first IT workers' union 
in West Bengal - and in India.  The WBITSA is expected to 
represent 40,000 IT workers in West Bengal's IT sector.  WBITSA 
is affiliated with the Center for Indian Trade Union (CITU) -- 
the labor wing of the CPM.  WBITSA's creation has exposed 
divisions in the CPM on the party's approach to 
industrialization.  The pro-reform faction, led by Chief 
Minister Buddhadeb Bhattacharjee, argues that any move perceived 
as going against corporate interests will scare the investors 
away from West Bengal, which is showing signs of industrial 
growth after falling behind other states.  In contrast, the CITU 
leadership believes that working conditions and contracts in 
Kolkata's IT companies go against existing industrial guidelines 
and laws.  Hence, workers need to be organized to improve 
conditions. 
 
¶3.  CITU and other elements of WB's Left Front government had 
called for a general strike throughout India on December 14 to 
protest the policies of the ruling United Progressive Alliance 
(UPA).  Because Kolkata's IT sector is considered a shining 
example of West Bengal's industrial revival under Marxist rule, 
the question of IT companies staying open during the strike has 
become a contentious issue.  Most of these IT companies have 
overseas clients and any disruption in operations would result 
in significant losses.  In the recent past, the CPM-led West 
Bengal government had to deploy police to ensure continued 
operation of IT companies during general strikes.   CM 
Bhattacharjee and CPM Politburo member Sitaram Yechury favor 
declaring the IT sector an "essential service" comparable to 
electricity, health and municipal services, in order to permit 
IT companies to remain operational during the strike.  CITU 
hardliners like M.K. Pandhe and Chittabrata Mazumdar have 
opposed this designation. 
 
¶4.  Significantly, the state unit of CITU, led by the pro-reform 
leader Shyamal Chakrabarty has not committed WBITSA to 
participation in the all-India strike.  While inaugurating the 
union, Chakrabarty explained that workers forming unions does 
not necessarily imply disrupting work.  Workers no longer go on 
strike in West Bengal except in jute and tea industries, 
Chakrabarty added.  Although hard-line labor leaders like 
Subhash Chakrabarty (no relation) have been vocal about 
unionizing IT workers, the pro-labor rhetoric was considerably 
toned down during WBITSA's inauguration.  Contacts told post 
that WBITSA in all probability will be a "docile" organization 
to appease the hard-liners.  It was apparently put in place in a 
hurry to preempt a move by the Congress-backed Indian National 
Trade Union Congress (INTUC) to enroll workers in its 
organization.  The INTUC had recently launched a drive to enlist 
call center workers and outsourced contract staff like couriers, 
security services, motor pool workers. 
 
¶5.  Kolkata's IT managers, for their part, are concerned about 
the effects of unionization on development.  Leading IT 
companies have formed an informal group (Salt Lake Rajarhat 
Committee) and have met West Bengal's IT minister to argue their 
case against the move to form unions.   One CEO told post that 
the move may be portentous for West Bengal's IT sector, 
 
CALCUTTA 00000525  002 OF 002 
 
 
especially as the outsourcing segment was going through a boom. 
"The Minister told us not to worry as the development is not too 
serious at the moment," he said.  The Bengal Chamber of Commerce 
has met the state administration on behalf of the IT companies 
and also expressed the industry's concern. 
 
¶6. COMMENT:  While WBITSA's formation may have been inevitable 
given WB's long history of pro-labor movements, many in the Left 
are now projecting a pro-corporate image to attract investment 
to the state.  The CPM's task is to demonstrate that the party 
has left behind its days of confrontational labor movements. 
Labeling the IT sector an essential service may solve the 
December 14 strike problem, but it skirts the real issue: which 
faction within the CPM will influence future economic policy - 
the reformers or hard-line Marxists?   END COMMENT. 
JARDINE