- DEARNESS ALLOWANCE
The first two main demands in the notice for strike were grant of Dearness Allowance (DA) and Need Based Minimum Wage. Let us examine how these demands were evolved and how much important are them to the workers.
Dearness Allowance is a bye-product of the II World War. DA as such did not exist before the II WW. The main demands in the Postal Strike of 1908, Telegraph Strike in the same year and the Postmen Strike of 1919 were wage revision, increase in certain allowances and improvement of service conditions. Pay was revised during 1926-27 also. All these could be achieved due to the strong organization, strategic position of the services and the effective strikes organized. But there was no scientific base evolved for calculating the basic wages.
Due to the spiraling prices of essential commodities as a result of the II WW 1939 – 45, the real value of the wages got drastically eroded. It was a situation where one cannot even buy the essentials with the meager wages received. Workers’ struggles arose one after another as the employers were not prepared to increase the wages, as a result of which, they were compelled to grant some allowance to the workers. They were called “Dear Food Allowance”, “Old Textile Allowance” “Revised Textile Allowance” etc.
Many employees in P&T and Railways were recruited to ‘Defence of India Army’ during the war. They were eligible for Free Ration Allowance, Military Compensatory Allowance and certain other allowances. Other central government employees were denied of the same. Demand was raised that these allowances should be paid to all C.G.employees. Agitational programme ‘Hungry Badge Campaign’ was organized in this connection. As a result, Government was compelled to grant ‘Grain Allowance’. It was the start of the system of ‘Dearness Allowance’ in the Central Services.
During this period, the Adjudication headed by High Court Judge Rajyadhyaksha took decision to grant Rs. 5 to Rs. 15 as ‘Dearness Allowance’.
The First Pay Commission, headed by Federal Judge Sreenivasa Varadachariar, appointed in 1946 recommended a scientific basis for calculation of DA connecting it with the cost of living index. It stated that the basic wage recommended by it was based on the then existing cost of living index and DA should be increased according to the increase in the COL.
The prices increased drastically during and after in II World War. Partition of India along with achievement of independence, migration of crores of people from Pakistan to India, vice-versa and connected fratricides, other unexpected developments – all resulted in shortage of food articles and huge increase in prices of essential commodities. The real value of the wages went down. The condition of the Central employees, who are transferred now and then, worsened beyond explanation.
There were other reasons for the rise in prices. The new government in power gave a long rope for the market forces by withdrawing many earlier restrictions. It resulted in increased exploitation of people and toiling masses by the bankers, big industrialists, manufacturers and business tycoons.
Interested parties used to propagate that price rise is similar to natural calamities like floods, drought etc. It is ‘god’s wrath’ according to some others. The fact is that the continuing price rise is only man made. It is a natural phenomenon of the capitalist system. Increasing prices to amass profit is the method adopted by capitalist countries. This type of increasing prices cannot be seen in socialist countries.
There is full justification to demand DA to compensate the increase in prices. But Nehru government was not prepared to grant DA as per the recommendations of the First Pay Commission. A meager Rs. 10/- was only granted in the background of the 1949 strike-call by the Central Government employees.
The II CPC appointed in 1957 did not recommend the Minimum Wage of Rs. 125/- as was required based on the decision of the 1957 Tripartite Labour Conference. It recommended only Rs. 70/- and DA of Rs. 10/- only. It recommended a pay slab up to Rs. 150/- and another up to Rs. 300/- and recommended Rs. 10/- and Rs.20/- respectively for those slabs for 135 points in cost of living index on the basis of 1949 = 100. The II CPC also recommended to consider increase of DA if cost of living increases 10 points for 12 months, but did not state what the amount to be given is. It can be seen that the recommendations were even lower than what was recommended by the First CPC in 1946. The suggestion that central government can take decision on DA considering the finance of the government and connected matters was nothing short of actually denying DA.
The government and the II CPC were trying to impress upon the employees that increase in prices was a temporary phenomenon and that it will not continue. But the facts were completely contrary. The First CPC had prophesized that the prices will stabilize within a few years at 185 -200 (1939=100). But by 1948, it increased from the earlier 310 to 346. The Gadgil Committee appointed in 1952 also gave similar prophesy that prices will stabilize by end of 1952. But instead the cost of living index increased form 367 in 1952 to 377 in 1953 (1939=100).
II Central Pay Commission was compelled to accept this fact. It noted that the COL had increased to 414 in 1958 with base 1939 = 100, meaning that 314 points have increased after 1939. Though CPC expressed the hope that price rise can be contained through the intervention of the government, again the COL increased 21 points within a short time. The hope expressed by the CPC that the COL could be contained at 115 points (1949 = 100) was also shattered as the COL increased to 118 from 112 in 1959.
These facts expose the fallacy of the government’s assurance that price rise is being contained. It was only intended to mislead the workers. The opinion of financial experts, who was towing the line of the government, also was proved wrong. The government was trying to reduce the expenditure on wages by cheating the workers; at the same time allowing the corporate houses to reap big profits. The steep rises in prices, exposed the hollowness of the government’s anti-worker policy.
The propaganda of the government that taxes will have to be increased if wages are increased was also exposed, as the taxes got increased even without any increase in wages. Another argument was that prices will increase if the wages are increased. This was also found hollow, since the prices increased without any increase in wages. The government was misleading the public to deny justified wages to the employees.
Another argument of the government was that workers will have to tighten their belts for the success of the Five Year Plans and developmental activities. It has been proved that this argument only helped the capitalists and corporates to increase their profits manifold. The workers are always prepared to make sacrifice for the progress of the country. But it can never be agreed that the workers have to sacrifice for thickening the pockets of the employers.
In short, the demand of the workers that DA should be granted to compensate the increase in prices is based on historical facts and economic justification which are time proved. That is why the demand for DA was placed as the first demand in the 1960 strike notice. (To be continued).