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A nationwide strike by tens of millions of Indian public sector workers has been hailed by union officials as “the world’s largest ever” industrial action, and cost the economy up to 180bn rupees (£2bn), according to an industry group.

Last-minute concessions by the finance and labour ministries, including a 104-rupee rise in unskilled workers’ daily minimum wage, could not ward off the strike against what unions said were the “anti-worker and anti-people” policies of Narendra Modi’s government.

State banks and power stations were shut and public transport was halted in some states on Friday, and 20 protesters were arrested in West Bengal after allegedly damaging government buses, police official Anuj Sharma told the AFP news agency.

Schools and colleges in Bangalore were closed as a precautionary measure, and 4,200 buses sat idle in Haryana. Mumbai and Delhi avoided major disruptions but surgeries were delayed at a major hospital in the capital while nurses demonstrated outside. Images broadcast on Indian TV showed protesters blocking railway tracks and roads in Assam, Uttar Pradesh and Odisha.

Among the trade unions’ 12 demands were a 692-rupee daily minimum wage, universal social security and a ban on foreign investment in the country’s railway, insurance and defence industries.

A nationwide bandh – Sanskrit for closed – on the same day last year reportedly involved 140 million workers, and union said Friday’s protests involved 150 million, a figure that could not be verified. Nor could the claim by Assocham, the peak group for Indian chambers of commerce, that the disruption to supply chains and businesses cost the country’s economy 180bn rupees.

Just one major union pulled out of the national strike: the Bharatiya Mazdoor Sangh, which, like the ruling party, is an affiliate of the Hindu nationalist group Rashtriya Swayamsevak Sangh.

Modi won power in 2014 promising to replicate across India the double-digit economic growth he oversaw as Gujarat’s chief minister. He steered a landmark national goods and services tax through India’s parliament last month and has opened up sectors such as defence and aviation for foreign investment.

The government has raised more than 564bn rupees by selling shares in state-owned industries but pulled back from full privatisation and left labour market reform largely to the states.

“The Modi government is probably the most pro-state sector government we’ve had in 25 years,” said Mihir Sharma, a senior fellow at the Observer Research Foundation in Delhi. “The unions are the only people who have bought the idea that the government plans big reforms.”

Sharma said the protests – the fourth all-India strike since 2009 – were to “remind the government of the cost of moving forward with its liberalisation programme”.

Prof Jayati Ghosh, a development economist at Jawaharlal Nehru University in Delhi, said Modi’s changes had built on a 25-year neoliberal reform agenda that had left workers across the country worse off.

“Less than 4% of workers in India come under labour protection, and even those protections have become more and more eroded. There’s a general sense that instead of targeting poverty they are targeting the poor, and there has been a real running down of spending on essential public services,” she said.

She said health workers in some states had not been paid in months, food subsidy and distribution schemes were being neglected and “private employers who wish to discourage any kind of unionisation are being actively encouraged by the central government”.