The Nationalisation 1971 – 1973

Submitted by Django on July 31, 2011

Formally the coking coal collieries – main source for steel production – were nationalised in 1971, and the non-coking ones in 1973. Subsequently, all coking and non-coking collieries were merged into the Coal India Ltd. (CIL) on 1st of November 1975. [9]

First of all, the ‘idea’ of nationalising the mines was neither new, nor did it express any ‘popular’ of socialist shift within the ruling class. Factions within the colonial regime had opted for nationalisation and later on, during the Nehru developmental regime, steps towards ‘centralisation’ were taken, e.g. through setting up the Committee on the Amalgamation of Collieries in 1955. Formally the main mines might have been ‘privately owned’, but they were dependent on institutional (World Bank) credit, state controlled prices, mainly state-run industries as consumers. The mining sector itself was already very centralised: a few mining houses accounted for 70 per cent of the total output; in 1971, 34.5 per cent of the mines produced only 1.32 per cent of the total output and 60.9 per cent barely 10.6. In this sense ‘nationalisation’ was a rather formal step.

The onset of the crisis by the mid-1960s forced the state towards this formal step: the wider industry was eager for lower energy input costs. It is revealing to see how the regime made use of ‘controlled forces of competition’ in order to implement the formal act of nationalisation – how state and market are not separate entities, but mediating forms of class power. In 1967 the state ‘de-controlled’ the coal prices, which passed the price pressure on to the coal producers. The railway apparatus became a main price negotiator with the mining industry. This happened for three reasons: the railways used to run their own mines and therefore had insights in mining activities; the railways were a main consumer of coal themselves; the mining industry depended on the railways for transport. The negotiated ‘Loco Price’ became a generalised price for the industry and pushed the ‘private mines’ into a formal bankruptcy by 1971.

The regime used and shaped the ‘competition’ of its internal apparatus, like the railways, in order to negotiate its way through the crisis. The ‘class cohesion’ behind this ‘competition of different interests’ revealed itself subsequently, once the general attack on the working class emerged. In the following years this attack hit workers in all ‘competing sectors’, from the mines, to the railways to the manufacturing industry. In a single week following the nationalisation of coal mines nearly 50,000 miners in the Dhanbad region lost their jobs and were partly replaced by ‘newly immigrated workers’. During the first three years of nationalisation total production went up from 70 to 90 million tonnes, the fatality rate through labour accidents per thousand jumped from 0.42 in 1974 to 1.4 in 1975. In May 1974 tens of thousand railway workers were arrested during their general strike, which hinted at the general repression of workers’ unrest during the State of Emergency, which was declared in the same year as when the ‘state-owned’ Coal India Ltd. was formed.

After nationalisation in 1971-73 it was not sufficient to merely change the formal owner-ship of mines, the actual production process had to be re-shaped. The first main shift in the Dhanbad area was a kind of selection process between mines, which were to be incorporated into Coal India Ltd. and mines to be left out in the ‘illegalised fringe’. For following reason this process was the most intense in the Dhanbad-Jharia region: Coking coal reserves – coal with high energy content important for steel production – constitute only 15-20 per cent of the total Indian coal reserves and these reserves are concentrated in the two fields of Jharia and Ranigunj. In 1972, Jharia coal fields accounted for about 66 per cent of India’s total output of coking coal. At the same time these coal fields were characterised by the highest share of small mines, over 300 small mines in total. The dualism of ‘illegal mining’ and ‘centralised mines’ became the sharpest in this particular area. The emergence if ‘the mafia’ was also based on its bridge function between these to sectors of uneven development.

The mining regime tried establishing a stable core-workforce, in certain terms ‘privileged’, in order to find secure conditions for the mechanisation process – while the mechanisation process in turn was driven by the ‘flight’ from an unruly mass of industrial workers. The wider proletarian unrest of the 1967 – 1974 period had also entered the coalfields and was only shortly interrupted by the Emergency. In 1977 workers struggles, mainly among the contract work-force, broke out again – see for example movements in the Rajhera mining area, which were brutally quelled by the post-Emergency democratic government. [10] From 1971 we can see a shift towards capital-intensive open-cast mining and intensified international cooperation with ‘mining capital’ from Soviet Union, Poland, Australia, Germany and the UK – which was not only a ‘technology transfer’, but also a transfer of experience with a century of ‘class struggle management’.

The ‘nationalisation’ also re-defined the formal border-lines between different stages of development, by de-marketing more clearly what is called ‘the illegal mining sector’.