The trade unions accepted a court-brokered agreement with the new Sterlite management that workers would be paid two months wages and that there would be no retrenchments or victimisations. Within 48 hours, Sterlite reneged on the guarantee of no retrenchments, laying off 2,000 contract workers on May 10 on the grounds that their contracts had expired. The management then reinterpreted the pay agreement, declaring the two months pay was an advance on workers' future wages, not backpay for the duration of the strike. The end of the Balco strike was greeted with jubilation by sections of Indian big business. The day after the strike ended, Sterlite's shares increased by 4.6 percent on the Bombay stock market.
Privatisation is a key component.
The workers failed to achieve their main goal to stall the privatisation of the company. The government is aware that the role of the trade union federations will be essential in pushing through this program. Two discussions have been held between Prime Minister A.B. Vajpayee, the Minister of Labour and the leaders of all the major trade union federations since the end of the Balco strike. The Labour Minister has stated they are steps towards regular consultation between the union leadership and the government. Vajpayee's call for a consultation framework is based on an understanding of the trade union bureaucracies.