Rising Inflation – Protests by Labor Unions

Inflation in India crossed 7% in July 2022, after remaining stable at 4% for over 3 years. Different labor unions in India are planning to take on the government on this issue as well as other subjects such as minimum wages, unemployment, corporatization of Public Sector Undertakings, and quashing of labor codes as they feel that these have made conditions worse for workers in the informal sector (90%). 

The government has been responding that inflation was being tackled at various levels including reducing excise duty on petrol and diesel, banning wheat exports, allowing duty free import of edible oils and revising downward duty structure on steel. Unions labelled Govt’s efforts as insincere and dishonest, and were looking to mobilize on specific issues, though they were no immediate plans to call for a general strike. 

HRPI View: Given the earlier repealing of farm laws due to protests, extensively reported in our earlier issues, it is very possible that nationwide protests may breakout, if the Govt does not act fast, leading to supply chain issues. Companies would be advised to stay cautious and ensure robust business continuity plans.