Size and Finance of TU

Copyright © 2013 by P. R. N.
Sinha, Indu Bala Sinha, and Seema Priyadarshini Shekhar

Size and Finance of Indian
Trade Unions
Industrial Relations, Trade Unions, and Labour Legislation, 2e Authors: P. R. N. Sinha, Indu Bala Sinha, and Seema Priyadarshini Shekhar
Why is the Average Size of Indian Trade
Unions Small, and
Their Financial Position Poor?
Copyright © 2013 by P. R. N. Sinha, Indu Bala Sinha, and Seema Priyadarshini Shekhar
• The industrial town of Kanpur, a cluster of industrial
establishments continued to grow from the beginning of the
twentieth century.
• The more notable of them have been cotton textiles, leather and
footwear, canvas, wood and electrical equipments.
• Along with these, a number of other industrial and commercial

establishments, shops and transport services also flourished at a
more or less rapid pace. Since Independence, the city and its
vicinity also witnessed the establishment of few large-scale public
sector undertakings having a concentration of an appreciable
number of workers
Frequency Distribution
• An idea of the frequency distribution of trade union membership in
the country can be had from Table 6.2 (Refer book), the figures of
which relate to the years 1956 and 1964.
• In both 1956 and 1964, unions having a membership of less than

500 constituted more than 80 per cent of the total unions,
whereas those with a membership of 2,000 and above accounted
for about 4 per cent only.
• The rest having a membership of 500 and above but less than
2,000 constituted 14.3 and 13.5 per cent of the total number of
unions in 1956 and 1964, respectively.
Factors Responsible for the Small Size
The first and the primary factor responsible for the decline in the
average size of the Indian trade unions:
1. structure of the trade union organization in the country. The

primary unit of union organization in the overwhelming number of
cases is the factory or the unit of employment.
2. Industrial unions covering employees in the industry as a whole

are a rare phenomenon. (Consequently, whenever employees in a particular factory, mine, or
as a matter of fact, any business establishment are organized, a new union is formed.)
3. Unionization in India, started with the big employers and gradually

spread to smaller employers and the process continues till today.
4. It is this process of unionizing the smaller and smaller units of

employment that have pulled down the average membership.
Consequences of the Small Size of
Trade Unions
The most important • Their inability to engage in effective
consequences of the collective bargaining
average size of the
• Their extremely poor financial
Indian trade unions
being small are: position.
Finance
Income and Expenditure
• An idea of the income and expenditure of workers’ trade unions
from 1951 to 2002 can be had from Table 6.3 (Refer book).
• A study of Table 6.3 shows that the average annual income of a
trade union in the country has been less than 3,000 during 1951–
63, between Rs 3,000 and Rs 8,000 during 1964–79 (except in
1978), between Rs 10,000 and Rs 20,000 during 1980–83, and
between Rs 20,000 and Rs 40,000 during 1984–98 (except in
1990 and 1995).There has been a substantial increase in the
average income per union from 1999 onwards during which it
varied between Rs 62,000 and Rs 82,000.
• The moderate rise in income during successive years may be
considered insignificant in view of the mounting price rise,
inflationary pressures and substantial erosion of the value of
money.
Finance
Sources of Income
• An idea of the sources of income of Indian trade unions can be had
from Table 6.5. Table 6.5 clearly reveals that the primary source
of income of Indian trade unions has been the membership
fee which constituted about 70 per cent of the total income
during 1956–62, but it decreased to about 62 per cent in 1972 and
1974 and then recorded a further decrease of about 43 per cent in
the case of central unions and 58 per cent in the case of state
unions in 2002.
• In spite of a gradual decrease in the percentage of contribution

from members and donations, these two have continued to be the
most significant sources of income of Indian trade unions. Income
derived from other sources, that is, sale of periodicals and
interest on investment, and so on, has been more or less
negligible.
Ways of Improving Finance
• Large Enrolment of Members: The average size of trade unions
in the country has been very small, which has generally varied
between 500–900 in almost all the years between 1951–2002.
• Strict and Regular Collection of Membership Fee: In India,
the trade union law does not authorize even the recognized
unions, not to speak of others, to compel their members to pay
membership fees, whether regularly or intermittently.
• Increase in the Membership Fee: Under the situations
explained above, even the powerful and big unions find it very
difficult to suitably increase membership fee. They fear that such a
move will result in loss of membership and weaken their
organizational strength.
• The Check-off System: Under the check-off system, an employer
undertakes, on the basis of a collective agreement or under
provisions of law to deduct union dues from the workers’ pay and
transfer the same to the union account.
The Second National Commission on
Labour on 'Check-off'
• The second National Commission on Labour considered the
question of check-off along with the determination of the
negotiating agent for the purpose of collective bargaining and its
advantages vis-à-vis those of secret ballot.
Contd…
The Second National Commission on
Labour on 'Check-off'
• The advocates of the check-off system, while making submissions
before the commission, referred to the following merits of the
system:
It represents the relative strength of unions.
It shows continued support of the union over a long period
of time.
Since the negotiating agent has to represent workers over
a period of time till the next negotiations fall, due
membership of the union is a far better and more reliable
index than a secret ballot
The system promotes unionization.
It does not involve any special expenditure for verification.
The administrative cost of a secret ballot is very high.

Size and Finance of TU

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Size and Finance of TU

Uploaded by

Copyright:

Available Formats

Copyright © 2013 by P. R. N.

Sinha, Indu Bala Sinha, and Seema Priyadarshini Shekhar

• Along with these, a number of other industrial and commercial

• In both 1956 and 1964, unions having a membership of less than

1. structure of the trade union organization in the country. The

2. Industrial unions covering employees in the industry as a whole

3. Unionization in India, started with the big employers and gradually

4. It is this process of unionizing the smaller and smaller units of

• In spite of a gradual decrease in the percentage of contribution

You might also like