By Satarupa Bhattacharjya
NEW DELHI (Reuters) - Millions of workers of all political hues will go on strike across India on Tuesday to express their anger at soaring prices and to back demands for improved rights for employees, trade unions and political activists said.
The strike, which will include workers from state-run phone companies, bus drivers and postal workers, is a new headache for Prime Minister Manmohan Singh's government as it grapples with weakening economic growth and faces elections in several states.
Workers linked to the ruling Congress party will join the protest and have promised further action if their demands are not met.
The protests are not expected to significantly affect banks and financial markets in Asia's third-largest economy, but traders said there could be some volatility in the bond market if volumes are lower than normal.
"Volumes could be lower, but settlement should happen," said a senior dealer at a state-run bank.
The strikers have a long list of demands. Among them, they want the government to take measures to contain inflation, provide universal social security cover for workers in the vast unorganized labour sector, and to stop selling stakes in state-run companies.
"We will have to think about our future course of action if the government does not come forward with proposals on how it will react to our demands," G. Sanjeeva Reddy, president of the Indian National Trade Union Congress, the ruling party's trade union, told Reuters.
Singh had appealed to Reddy to call off the strike, but was ignored, according to a report in the Hindu newspaper on Monday.
Hit by high interest rates, stubborn inflation and a stuttering reform agenda, India's economy is expected to grow by about 7 percent in the fiscal year ending March, compared with earlier expectations of about 9 percent growth.
Singh's government, which is also beset by multi-billion dollar corruption scandals, has faced a slew of protests since winning a second term in 2009, denting the Congress party's image as a defender of the poor.
The party is currently fighting five state elections, including one in Uttar Pradesh, the country's most populous state.
Tuesday's strike will be the 14th general strike since India opened up its economy with major reforms in 1991.
(Additional reporting by the Mumbai Treasury team; Writing by Matthias Williams; Editing by Ted Kerr)