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11. Something old, something new, something borrowed . . . the electronics industry in Calcutta

The consumer electronics sector
Electronics components production
The software industry

Nirmala Banerjee


The background

In the 1960s, when the idea of using computers in economic activities was first floated in India, there was a wave of protest from trade unions and political parties who feared the impact of automation on future employment prospects. By the 1990s, computers had been partially accepted in some major service industries, particularly the communications industry, and to some extent in banking and financial services. However because these had also been some of the fastest growing sectors of the Indian economy, employment there continued to grow in spite of the technological changes. The period since the 1960s has also seen the government beginning to emphasize the minimization of employment discrimination against women, at least in the public sector. Since most of the growth industries mentioned above were under public management, women's employment in those industries grew faster than in other sections of the economy. It has therefore been easy to conclude that, as in most other countries, the deploy- ment of electronic technology has on the whole been 'gender friendly'.

In the 1990s, Indian policy makers have somewhat belatedly awakened to the growth potential of electronic goods manufacturing, and the potential uses of computers in other manufacturing industries. Between 1982 and 1992, (the period covered by the VIth and VIIth Indian plans), the value of output of the electronics manufacturing industry grew at about 30 per cent per annum. Even so, India produces less than I per cent of the world's production of over US$750 billion worth of electronic goods (Planning Commission, 1992: pare 5.18.1: p. 116).

The Indian industry is dominated by consumer electronics, especially television sets, whose import content remains very high. In other branches, particularly in controls and instrumentation, India has created a considerable capacity for the manufacture of hardware, but utilization remains low because of the lack of capabilities in systems designing. Another fast-growing section of the industry is software production, mainly for export markets. The eighth plan noted that this industry had only touched on its true potential because of the limited geographical coverage by quick and easy communications facilities (ibid.: p. 117). It has often been observed that, compared to the size of India's national product and its general industrial development, the Indian electronics industry is still a long way away from realizing its full potential.

Although policy makers are not very optimistic about any immediate dramatic improvement in this situation, they agree that even at its current rate of growth, the industry is likely to generate a substantial number of jobs in the near future. Estimates vary widely: a recent well-researched study by the Institute of Applied Manpower Research (IAMR) under the sponsorship of the Department of Electronics of the Government of India estimated that between 1992-1997, there would be 177,000 new jobs in electronics manufacturing alone.1 These estimates probably erred on the cautious side. At the other extreme were the estimates printed in the economic press in 1991, when the industry was given a boost through a few concessions announced in the central budget. Their somewhat euphoric predictions indicated that, over the following five years, the industry and its secondary links could generate as many as 2 to 2.5 million additional jobs.2 Even if one discounts this euphoria, the lower estimates of the IAMR still compare well with the annual additions to registered Indian manufacturing employment (CSO, 1991, Statement I: p. 8).

In the past, women have claimed about 30 per cent to 40 per cent of additional manufacturing employment in the Indian electronics industry (Sen and Gulati, 1987: p. 13; Piore, 1991, Table 4: p. 204). If this trend continues, even the IAMR estimates would mean that the total registered factory employment of women would increase by at least 25 per cent (CSO, 1991). Thus even if Indian women may not be doing as well in these industries as their counterparts in many of the newly industrialized Asian countries, (ILO - ARTEP, 1990, Table 5.9: pp. 81-82),3 they do have a special interest in the further development and spread of the technology in this country.

Objectives of the study

At this juncture there are uncertainties not only about the likely size of the additional employment in this field in India, but also about the nature of those jobs, the kind of labour that would be required for them, and the prospects of it being available and actually drawn from among women.

In the past, changes brought about by the new technologies in the worldwide employment scenario were very much in the pattern posited by Braverman (1974). Skilled jobs, mainly the jobs of men in the manufacturing industries of developed countries, were depleted through automation. On the other hand there was an expansion of low-skilled jobs particularly in the manufacture of electronic components - especially the microchip - where untrained young women in several developing countries had an advantage. Microelectronic technology itself was in a state of rapid transition, and its capacity for industrial use was not fully appreciated. Producers of electronic equipment had therefore been unwilling to invest in large capital-intensive plants and had preferred to use labour-intensive operations located in countries where cheap, docile, and therefore mainly female, labour was readily available. India missed out on these earlier opportunities because of the unwillingness of the then government to accommodate large multinationals on terms comparable to those offered by competing countries. The scale of operations and the pace of technological changes have now altered sufficiently to make it profitable for large producers to introduce a degree of automation in these industries. In a recent interview in India, Apple International's business manager for South Asia said that, 'There are no more lines of young women dropping components into boards. Labour content in computers is dropping dramatically.'4

On the other hand, use of information technology enormously increases industrial efficiency through its capacities to link distant markets, economize on inputs and inventories and streamline product designing. It has played a major role in the worldwide expansion, over the last two decades, in the output and employment of many manufacturing and service industries (James, 1985; Sayer, 1986). In several developing countries which participated in this boom, women provided the major share of the additional labour (ESCAP, 1987). Again, largely because of its governmental policies, India did not participate in these developments in a major way (Bagchi and Banerjee, 1986). But now India is rapidly shifting towards a more open economy, and the question is whether Indian women will get similar opportunities in the expanding industrial sector.

The potential created by the enormous flexibility of the microelectronic technologies and of machines embodying them opens up another vista of employment opportunities which has not been fully appreciated in India. Since the same equipment can be used for a large variety of designs and production processes, producers can switch between different designs as well as scales of operations without a significant loss of efficiency. They are therefore in a position to serve large, diversified and sensitive markets without significantly adding to their unit costs. For this process to work, however, it is imperative that the labour working on those machines is educated in, and at ease with, the technology, and is also well informed about market trends for the final products. Moreover, for a smooth transition from one product or process to another, the workers need to work in close cooperation with the management. In other words, far from being mindless assemblers, the workers need to feel an active partnership in the production, and indeed be a kind of artisan, using both their own skills and their creativity (Piore and Sabel, 1984).

In the literature regarding the impact of these technologies on labour processes, the trends of deskilling and feminization of employment, on the one hand, and the creation of artisan-type jobs on the other hand, have been widely noted. But they have usually been regarded as consecutive steps in a universal and uniform process in which the specific location of a given economy is considered to be a function of its level of development. One comes across scholars suggesting that experiments such as that of 'Little Italy' are easily reproducible in India, now that the appropriate machinery is locally available (Sanyal, 1992).

However, as several recent studies have pointed out, there have been marked differences in the impact on labour processes of these new technologies, even between countries at apparently similar stages of development (Gordon, 1988; Lauridsen, 1991). It has also been pointed out that the pace and form of utilization of available technologies are crucially dependent on the institutional background of a given economy (Freeman and Perez, 1988) and that one can seriously question how far the experiences of one country can be reproduced in another with a different set of institutions (Belussi, 1991).

This study explores the nature of the jobs that are being created in microelectronics in Calcutta in the 1990s. Its thrust is to analyse the economic as well as the institutional factors determining the actual course of events.

The study is confined to a few units of Calcutta which produce the following products:

1 black and white and colour television sets;
2 electronic micromotors; and
3 software.

Regional characteristics

Before discussing these case studies, it is necessary to point out some basic characteristics of this region. First, Calcutta has a large pool of educated persons including a substantial number of computer experts. The local industry has, however, not been able to use them to any great extent, and many of them have looked for jobs abroad. At the same time, as will be discussed later, facilities for basic training in computer languages and usage are not very good in this region.

Second, in Indian manufacturing generally, and particularly in Calcutta, there is a long tradition of production work being farmed out to ancillaries and subcontractors. Much of the work is done by self-employed persons through the mediation of these contractors and middlemen (Bose, 1978; Banerjee, 1988). The system is sustained by the high unemployment and underemployment rate among the many illiterate and semiliterate workers in the region. Studies of Calcutta's economy indicate that the city attracts workers from a rural hinterland with a radius of over I 50 kilometres, which includes parts of Bangladesh (State Planning Board, 1991: supplementary Vol. 1, maps 4 & 5).

Third, the Indian electronic industry has not made any headway in international markets, but it has a large domestic market, thanks mainly to India's numerically large middle class. Also, in the last two decades there has been a marked increase in the average proportion of incomes spent on non-food items in both rural and urban India. Within that group, durable consumer goods claim only a small share, but this share has expanded considerably over the years. Although West Bengal, including Calcutta, is still below the national average, the increase in its figures is of an equally large order (see Table 11.1).

Lastly, perhaps more than other comparable regions within India, Calcutta suffers from several crucial infrastructural bottlenecks. Producers here are not assured of an uninterrupted power supply. The communications system leaves much to be desired. Small industrialists complain about difficulties in obtaining credit. These factors have had an impact on the way industries here are organized and on the pace of their adoption of new technologies.

Table 11.1 Percentage share of non-food items and of durable goods in per capita consumer expenditure, all India and West Bengal, rural and urban





W. Bengal


W. Bengal

Total non-food










Durable goods










Source: Sarvekshana, January 1979 and July-September 1991


A significant section of the electronics-based manufacturing industry in this region is in the public sector. Units under the umbrella of WEBEL (West Bengal Electronics Development Corporation) are yet to run on proper commercial lines. In the private sector there are also too few units for a sample study. This analysis was therefore based on detailed interviews with, first, the chairperson of WEBEL, and then through the introductions provided by him, with the entrepreneurs, managers and some workers of several firms in the selected industries.

The consumer electronics sector

Three registered manufacturers

For manufacturing television sets, public policy has long favoured either semi-government or private medium-size and small firms. There are many firms manufacturing black and white as well as colour television sets, cassette players and two-in-ones (a transistor and a cassette deck in one unit) in the Calcutta region, though not all of them have been continuously in production. For this study, three firms were examined, of which one was medium-size and the others were small enterprises. Later, following leads which they provided, some non-registered producers of black and white televisions were also examined.

The medium-size registered firm was able to produce around 200 colour and 1,000 black and white televisions per month. It had a fixed investment of around Rs 20 million and a workforce (including management, office and sales staff) of 150. It had started well, with financial support from semi-government financial institutions at less than market rates of interest. It had also acquired a good reputation for the quality of its products. However, for the last year or more, it had been closed because of mounting losses.

The smaller two firms were each able to produce around 200 black and white 14-inch television sets per month under their own brand names. Each had started with an initial fixed investment of approximately Rs 2.5 to 3.0 million, raised under public schemes for assistance to small entrepreneurs. At their peak production each had had a workforce of around 50, but lately both had been in financial difficulties, and with unsold stocks mounting they had drastically cut down on their production and retrenched some of the workers.

In spite of the differences in sizes, the three firms were all basically assembly plants: over 70 per cent of the value of the final products consisted of costs of intermediate goods: these were imported either from abroad or from other parts of India (this included the case to house the set).

In all three units, around two-thirds of the workforce were women with secondary education, but none of them had any formal technical training. The men in production work were generally less educated than the women. The white collar workers were all graduates, and some had technical qualifications. Monthly earnings of the workers ranged from Rs 1,000 to Rs 1,200 for the women and Rs 1,500 to Rs 2,500 for the men, depending on the level of skills and experience. The employers especially mentioned various measures, such as regular salary grades and holidays, which they had taken to build up a modern, stable workforce.

The reasons given by the entrepreneurs of all three units for their poor performances were twofold. First, the demand projections made for the television industry by the government (Government of India, 1984) had been highly misleading. On the basis of experience in the developed countries, the latter had assumed that each household would replace its television set after five years. In practice, almost all households had continued to use theirs for ten years or more. Second, they complained that in spite of repeated representations from the industry, the state government continued to levy sales tax on the component parts at a rate way above that of other regions producing similar units within India. This meant that West Bengali products could not compete with those coming from other regions, even after the latter had paid transport costs and entry taxes. In West Bengal the minimum wages fixed for the engineering industry were also higher than those in Kerala and Uttar Pradesh, which were the two main competitors of West Bengal in this industry.

The illicit units

The main threat for these units however appeared to originate elsewhere, and though the registered units knew about it, they were perhaps not aware of its full magnitude. The market for smaller black and white televisions was being flooded with sets made by unlicensed or private units run on 'cottage' or 'sweatshop' lines. The larger illicit units were owned by television parts dealers, who sold parts imported under licence as well as those smuggled in from Nepal or Bangladesh. The television sets were assembled in the back rooms of the dealers' shops. Most of their workers were unskilled women, working under the supervision of a few semiskilled workers who had themselves learned the work by rote in some registered television plant. The women were paid piece rates, earning around Rs 550 to Rs 750 per month. The supervisors earned around Rs 1,500; they were also the sales staff. These television sets usually came complete with some well-known brand name.

The competitive advantage of the unregistered units came from several sources: they could avoid sales taxes on the components by utilizing smuggled or cannibalized parts or by fudging their accounts. There were little or no overheads. The average wage rates of all workers were significantly below those of their counterparts in the registered units. Therefore their prices at the time of our enquiry were as low as Rs 1,400 per set, while the registered units could not bring down their prices for a comparable set below Rs 2,000. As a result, the products of the unregistered units were taking over the low-priced end of the market in rural and semi-urban areas around Calcutta.

These dealer-made sets were definitely of an inferior quality, since the makers had neither the equipment nor the expertise for quality control. They nevertheless found a ready market, partly because of the significant price advantage and partly because they were being pushed in a wide market by the vast army of repair workers, who visited the dealers to buy parts for local repairs. These mechanics often persuaded their neighbours and acquaintances to buy the cheaper sets through them, by giving some kind of a guarantee of quick service in case of a breakdown. For this they got some commission from the dealers and also a lot of poorly paid but frequent repair orders. Occasionally the mechanics would themselves produce a similar unit on their own from cannibalized parts.

Part of this illicit production was going to meet the growing dowry demands, which had increasingly come to include televisions in the list of essential gifts at the time of weddings. The hard-pressed parents of the brides were often relieved to get a cheaper product and were not too concerned about its quality.

The look-alike problem

Competition from look-alikes, which are locally known as number two products, has hit the local production of a large variety of electric, electronic and mechanical products including electrical plugs, switches, light bulbs, electrical fans, radios, cassette players, automobile parts, sanitary fittings and so on. This development is engendered mainly by the character of the labour and capital chat are to be found in this region. The region has a large pool of semi-skilled informally trained workers who learn the basics of all kinds of skills by observing older workers, whom they assist from childhood. They thus become experts at making running repairs to almost any machine. They are however incapable of building up their own legitimate production units because they lack access to adequate technical know-how and also to the social connections and confidence that appear to be necessary for raising capital and getting licences, permits etc.

In addition, as the traditional hub of trading activity in eastern India, Calcutta's credit scenario is dominated by traders. The informal credit market that runs in parallel is probably almost as large if not larger than the formal one; it specializes in providing short-term, unsecured, and extremely expensive credit (the interest rate can be as high as 4 per cent to 9 per cent per month).5 This credit is used mainly for trading activities, but can also be diverted for other purposes with similar credit requirements. These highly volatile but readily-available credit facilities encourage the establishment of any legitimate or illegitimate productive activity, provided it requires little fixed capital, has a low gestation period and a quick turnover. The parts dealers with their own retail outlets appeared to fill this bill ideally. They could tailor their production to fit the demand and not build up unnecessary inventories or other overheads. Since their production was in any case illegal and likely to be banned at any time, the producers were themselves less interested in building up a steady clientele than in a quick sale. Quality was not a consideration for them.

For the licensed units, the fact that the cost of intermediate goods was a large proportion of the final cost of their product meant that they had little scope for improving the cost efficiency of their operations. Nor could they reduce their per unit overheads by increasing the scale of their operations, because they could not get a toe-hold in the faster-growing market of first-time rural or semi-urban buyers. Moreover, the link between the unlicensed producers, parts buyers and repair mechanics cum local sellers provided the customers with a cheap and regular servicing facility which the more distant licensed producers were in no position to offer.

The result is that the consumer electronics industry in the region has remained in limbo. The technically qualified producers with licensed units are unable to develop the potential of the industry because they have failed to make a mark on the newly expanding markets. On the ocher hand, the dealer-producers know that theirs is strictly a fly-by-night business, and they have no intention to organize it better. Therefore, in the new liberalized economic regime of India, the local industry is under serious threat from competition from large-scale, modern and efficient units from other areas.

Women workers

In the illicit units, employers were wary of any outside interference from unions. They therefore hired women of their own communities (two of the dealers were Muslims) and their own localities, or others who had been strongly recommended by some reliable mechanics. These women usually had no more than primary education. The employers tried to keep them confined to specific tasks and gave them as little information about the business as possible. They also tried to create a divide between the men and the women by treating the men on a somewhat better footing.

Nevertheless, because the operations were so crowded and small, the women had come to know almost all the aspects. They had become familiar with the men's skills and felt confident that they too could mend a television set or even assemble a complete one. In fact, though they were originally from considerably inferior backgrounds than the women working in the registered units, they had become much more sure of themselves. The few women from the registered units that we met had been laid off on several occasions: they had quietly sat at home waiting to be recalled. The women from the unregistered units knew that their jobs were temporary, and they were constantly on the lookout for some other opportunities.

The problem was their lack of systematic training. Although most of the men mechanics shared this handicap, many had done some kind of an apprenticeship with senior mechanics or repairmen in their localities. So they were more confident about the work and could also inspire more confidence among their customers. For the women to be able to convince customers of their skills, some formal qualifications were necessary. The ones we met repeatedly asked us if we knew of any courses they could take up.

There is however a serious lack of training facilities in this region. According to the report prepared for the Eastern Regional Committee of the All India Council for Technical Education, ( 1992: pp. 42-69), in the whole of West Bengal there were only 53 places for boys and 45 places for girls in polytechnics which gave a diploma in electronic maintenance and repairs. The entrance requirement for these courses was school graduation with 10 years of schooling. Several private institutions do offer shorter courses, but they are more expensive and have similar requirements.

Electronics components production

From the seedy backyard sweatshops producing inferior quality television sets, the focus now shifts to a modern, well-designed factory situated about forty kilometres from the city of Calcutta. The enterprise was established in 1989 by a group of local engineers in collaboration with a Japanese firm. It produces electronic micromotors, an item which had hitherto been marketed in India entirely through imports. Of the initial capital investment of around Rs 180 million, the Japanese firm had put up one half and the other half had been obtained by raising loans from several Indian financial institutions. The firm has an assured market, because the Japanese had a contract to take half of its production and Indian demand for the product is growing fast.6 Although the price of the Indian product was higher than the price at which Taiwanese manufacturers had been dumping the item in the Indian market, the Indian product was considered to be better because it had been designed for Indian conditions. Moreover, after the devaluation of the rupee in June 1991, the entrepreneurs had devised local equivalents for most parts. Whereas nineteen of the thirty-seven parts making up a micromotor were imported previously, now only six had to be imported. The local parts were also said to be better designed and sturdier. The firm had the capacity to produce 5,000 items per shift, but previously, uncertainties in the supply of imported parts had kept production down to only 3,000 per day. The management was confident that, with local parts, they would find a market for all their produce even if the plant was run at full capacity for three shifts a day.

Use of ancillaries

Although the owner/entrepreneurs of the micromotor plant had been closely involved in designing the indigenous parts to replace the imported ones, orders for the production of the parts were being farmed out to several metal and polyurethane fabricating units around Calcutta. I had a chance to visit a few of those ancillary units. Most used standard equipment and the bulk of their work consisted of filling the orders of the micromotor plant. However, managers of the latter unit were quite firm in their resolve not to integrate this fabrication work into their own plant and management. Although they admitted that the use of these ancillary firms might occasionally create quality control problems, or supply bottlenecks if they expanded the scale of their own operations, they felt that integrating the two kinds of operations would increase the cost of the parts. The ancillaries used skilled workers but their wage rates were below those paid by the micromotor plant. And in any case the characters of the two workforces were quite distinct: bringing them together under one management could only lead to labour unrest in the coming years.

An ikebana in Calcutta soil

More important, the micromotor plant had been organized mainly on the Japanese pattern of minimizing inventories of inputs and intermediate goods. If the plant were to start fabricating parts, it would be forced to build up stocks of raw materials and other inputs, because Calcutta's channels of supply are notoriously unreliable. By using several ancillary units for each part, the micromotor plant was hedging its bets and passing on these problems of getting inputs on time to the ancillary units.

The workforce of the micromotor plant was indeed distinctly different from the average manufacturing workforce in this region. Of the 110 workers, nearly half, including one technical manager, were women. In a politically volatile area with traditions of an aggressive labour force, the managers had managed to avoid confrontations by adhering to a strict policy of hiring only local youths. Interestingly, though the plant was located in rural surroundings, there had been no dearth of young people with at least eight to ten years of schooling. In the production of micromotors, young girls are given a preference everywhere because they are said to be biologically more suited to detect a certain sound that is emitted at one stage of production. The managers had looked for and readily found young unmarried women who had all had at least twelve years of schooling. However they had been obliged to hire an equal number of men, even though the average level of education of the men was three to four years lower. The less educated workers were given six months' of initial training, and the others three months. This training had familiarized all of them with the basic theoretical principles involved in the operation and with the various tasks of production. It had also explained to the workers the potential uses of the product and the nature of the market for them.

It was obvious that all the workers were fully familiar with the entire work process and there was no attempt in the plant to segregate or grade them. The salaries of all the workers varied within a narrow range between Rs 1,000 to Rs 1,035 per month. The Japanese collaborators had taken an active part in the initial training programme and had instilled a basic plant discipline which included a daily open air physical exercise programme for all workers. All in all, the owners had created a small, smoothly-working Japanese island within the more rough and ready world of Calcutta's manufacturing.

Being an exotic island was now posing problems for the management in its plans for expansion. Their assessment was that the initial project had been successful for two main reasons: the elaborate training programme which had cost over Rs 2,000 per trainee, and the fact that they had been able to find at least fifty women willing to be trained. It was the presence of the well educated women which had made the training itself a serious and committed programme. Now there were plans for an evening or night shift, but the managers doubted whether more women would come forward to join the plant. The additional workforce would also have to be drawn from the surrounding villages if they were to avoid future labour trouble. Since it was unlikely that all of those women would come from a single village, each would have to travel alone at odd hours. Women with the requisite educational qualifications would probably come from relatively affluent rural homes and those families would probably be unwilling to send them under such circumstances. The managers too were wary of the risks posed for the women in this project.

The initial training exercise also seemed difficult to replicate. They themselves were now very busy running the ongoing operations, and this time they could not hope to get any Japanese help. Moreover, if there were no women in the next batch of trainees, they were worried that the whole group would be less disciplined or willing to undergo the routine. In spite of a ready market for their product, the managers were thus extremely ambivalent about their plans for further expansion.

Women workers

This would indeed be unfortunate because the work in the plant had been highly rewarding for the women workers. The plant was situated in an area with a considerable Muslim population, and eight of the women were Muslims. The rest were from families in which they were the first generation of women to get secondary education. Going to school had itself loosened some of their inhibitions. It had also meant that they were all unmarried at the age of 19 or 20, when they joined the plant. But it was the work that had given them the confidence to feel that they were as capable, if not better, than the men. They were quite sure that they could now tackle any new skills or techniques that the management might bring in. They were also quite firm about having a lifelong career: several had married since joining and a few had also had a baby, but none of them wanted to give the job up. The only thing they were worried about was the possibility of the plant closing down, and whether the skills that they had acquired would be adequate to get another job.

There were mixed reactions to the early morning physical exercise routine. Several felt embarrassed because local boys teased them, but others pointed out that this was important to create a mood for team work. It was interesting that all of them, including the Muslim girls, came to work on their own bicycles, although girls riding a bicycle are not a common phenomenon in West Bengal.

Views and practices regarding marriage had also undergone changes. One of the Muslim girls pointed out that in her family, two older sisters had been married without dowry as per Muslim traditions, but for her third sister her father had been forced to give a substantial dowry, because the custom was now making inroads in their community. She had decided that she was not going to be subjected to this, even if it meant her staying unmarried. On the other hand, one of the Hindu girls had married a man of her own choice and had insisted that her father should give her some cash instead of the usual ornaments and clothes, so that she and her husband can set up an independent household. There was an easy camaraderie between male and female workers, in spite of there being marked differences of class or religion. There was some giggling about a Muslim girl who was engaged to a Hindu fellow worker, but there was no shock at this breakdown of traditions. In another instance, one girl had been married off by her father, and has Rs 15,000 in dowry, which all the other women found shameful. Several said that they were saving a part of their salary in order to be able to marry whom they liked, and set up a home. It was therefore a pity that this very enriching experience was essentially a product of an alien hothouse and could not be expected to be easily reproduced on a larger scale.

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