Coal Is King

(The following is an extract from a forthcoming book by the author on the plunder of the ‘commons’ in India.)

— Yogi Aggarwal (yogi.aggarwal[at]gmail.com)

 

Introduction

Two major events took place in India’s coal sector in the last few months.

 First, on the night of December 30, 18 coal miners were killed after the mine collapse at Eastern Coalfields Ltd’s Lal Matia coal mine in Jharkhand. This  pushed mining fatalities to over 100 in 2016, of which 65 deaths occurred during just the first six months of this year, for which  data is available.

 The Ministry of Mines has termed the Lal Matia accident an “unprecedented” event. “Prima facie, it is observed that the incidence is unprecedented, since an area of 300 m length by 110 m wide solid floor of the Over Burden dump area has slid down by about 35 m involving around 9.5 million cubic metres of earth material. This could be due to failure of the bench edge along the hidden fault line/slip,” the ministry said in a statement.

 In fact, the disaster at Lal Matia was a result of two factors: one, increased pressure to ramp up output to meet ambitious targets; and a policy of outsourcing to private contractors, a form of semi-privatisation of coal operations. Lal Matia supplies almost half the annual production of Eastern Coalfields Ltd (ECL). ECL awarded a contract in 2015 to a private contractor, Mahalakshmi Infrastructure Pvt Ltd, to handle an overburden of 20 million cubic metres. Repeated complaints by social workers  In the first nine months of the previous year, production at Lal Matia grew at the rate of 9.5 per cent. In the course of 2016, several complaints were made to the ECL management regarding the danger of the overburden, but these were ignored, leading to the calamity of December 30.[1] One of the reasons why private coal mines were nationalised in 1973 was precisely their poor safety record and the abysmal condition of the workers.

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Neoimperialism and Labour Compression

By S. Pratap[1] and A.J.C. Bose[2]

Neoimperialism, by way of a new international division of labour, has emerged in the shape of ‘global value chains’ over the last two to three decades. Taking advantage of increased openness of developing countries to foreign investment, transnational corporations based in the developed countries have fragmented production processes across different low-wage locations. Only a negligible share of the value is captured in the developing countries, and the rest is captured in the developed countries, the lion’s share by the transnational corporations. The widespread labour protests in Asia clearly testify to the reality of compression (degradation and repression) of labour in these chains.

 

1. INTRODUCTION

A value chain refers to all the value-adding activities in production and distribution, linked together in the making and selling of a commodity. A production chain, as a subset of the value chain, refers to the value-adding activities in the production of a commodity. Various firms in the production chain are linked through contracting and subcontracting relations, as also arm’s-length ‘purchase’ transactions, and these firms can be classified into a minority of lead firms and a majority of supply chain firms. Value chains exist within and across countries, and it is impossible to track down all the firms/producers and workers in the production chains (Bose and Sinha, 2012a; JCB, 2013).

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GDP Puzzle Solved

New sector expands at breakneck speed

On February 28, the Central Statistical Organisation (CSO) came out with Advance Estimates of GDP for October-December 2017. However, the CSO’s startling claim that GDP grew by 7 per cent during the very quarter in which the Reserve Bank withdrew 86 per cent of the cash in circulation, i.e., that demonetisation had simply no effect at all on national income, has evoked widespread disbelief.

There had been widespread reports of closure of small scale industries throughout the country, from Aligarh to Ludhiana to Bhiwandi; how then did manufacturing Gross Value Added actually rise 8.3 per cent in the third quarter? The fact that “private final consumption expenditure” actually rose handsomely, indeed even grew as a percentage of GDP, during a period in which no one had cash to spend, has occasioned some rather harsh criticism of the official statistical machinery.

We raised some of these questions with a senior official in the CSO. In response, he pointed out that many economists had failed to take note of a significant new sector, namely, manufacture of statistics. According to latest data from the CSO, statistics manufacture surged 243 per cent in the third quarter and 274 per cent in the fourth quarter, averaging an extraordinary 202 per cent for the full year.

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