Surat: Textile firms teeter on edge of despair, lay off thousands of workers

Thousands of workers are being laid off as powerloom firms find it hard to function amid the cash crunch.

Written by Kamaal Saiyed | Surat | Updated: November 23, 2016 1:13 pm
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The textile industry of Surat, which has a turnover of thousands of crores, has been paralysed after the Centre domonetised Rs 500 and Rs 1,000 notes. Thousands of workers are being laid off as powerloom firms find it hard to function amid the cash crunch.

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Arvind Yadav (40), a powerloom machine operator, returned to Surat from his native place in Bihar on Thursday, only to hear from the powerloom factory owner that he should go back home “and wait for a few more days as there is no demand of the grey cloth in the dyeing houses due to the present situation”. The factory owner also told him that they had reduced the work force in the factory, located in Govindnagar area at Limbayat, Surat. Yadav, who has three minor children, was shocked to hear this, but he continued to stay on living on the savings in the hope that things would be fine in a few days.

Yadav is not alone. Vishnu Tiwari (30), a native of Uttar Pradesh who works in a dyeing and printing factory at Pandesara GIDC, returned to Surat with his family recently, but had to go back to his hometown. The labour contractor who employed him told him that out of six printing machines in the factory, only four were running. The factory owners also told him that they faced problems in giving salaries as there was no demand from textile traders. The traders give the work of printing sarees and dress materials to dyeing and printing factories. It is estimated that the layoffs in textile units could be up to 40 percent.

Powerloom worker Radheyshyam Prasad (35), who also belongs to UP and lives in Limbayat area of Surat, said, “My monthly salary is Rs 16,000 and we take it in two instalments. My two children study in a municipal school and I have to pay a rent of Rs 1,000 to the landlord.

The remaining amount is spent on food and other needs and whatever is left is saved. After Diwali vacations, we only brought Rs 2,000 cash from home. My meals have reduced to chapatis with green chilly and onions. We are living in the hope that some day things will get better.”

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Surat textile industry has at least 10 lakh people directly and indirectly associated with it. As per
the data from the Southern Gujarat Chamber of Commerce and Industry, Federation of Surat Textile Traders Association, Federation of South Gujarat Textile Processing Association and Federation of Surat Weavers Association, there are over 4 lakh powerloom machines in Surat city, with 450 processing houses and over 65,000 textile trading shops in 165 textile markets.

Besides, there are other labourers engaged in the transport and packaging sectors. The majority of workforce in the textile industry are migrants from Uttar Pradesh, Bihar, Orissa, Andhra Pradesh, Maharashtra, Rajasthan, etc.

Anil Patel, a powerloom factory owner in Govindnagar area, has 24 power loom machine setup. Earlier, there were 16 workers working in his firm, but now he has nine. The rest were asked to leave, given the liquidity crunch in the market.

Patel told The Indian Express, “Due to demonetisation, the condition of workers and factory owners are the same. At present, we are running only day shifts (7 am to 7 pm), while night shift is closed. I have only retained those workers whose service period is seven years or more. Those who worked for less than that have been asked to quit. We are facing cash crunch and there is no demand of grey cloth in the market. We have made two day shifts each of six hours and have adjusted all the nine workers in it. We also feel sorry for the laid-off workers, but what can be done? We are facing liquidity problem and cannot encash much from the banks.”

Kaisarali Peerzada, a powerloom owner, said, “We have little cash in change with us which we got after standing in long queues. In the powerloom industry, salaries are paid twice – on the seventh and 25th of every month. The workers had taken salary till Diwali and gone to their native places and have now returned with little cash. We are also worried as the month draws to an end. We have assured workers that something would be done. The workers are taking Rs 100 -200 daily from us for their expenses.”

Federation of South Gujarat Textile Processing Association president Jitu Vakhariya said, “We are somehow surviving. The textile processing units consist of dyeing, printing and parcel departments. We are controlling the production and the units are surviving with old job works. The unit remains open for four days in a week these days. The workers’ strength has been reduced as only few machines are operational. We don’t get orders from the textile traders.” He reiterates that the production has gone down by about 70 per cent in the wake of the cash crunch.

There is no demand of cloth by textile traders. An average textile processing house employs a work
force of around 700 to 800 workers. The processing houses started after November 9, following Dev
Diwali, after the Diwali vacations, on October 30.

Says Vakhariya, “The owner keeps some cash on hand to overcome daily expenses, like machine repairs,
and the purchase of raw materials. But now we are not getting enough money from the bank. The labour contractors are supporting us a lot and we have promised them that we will pay them when things get better. However, now workers’ wages have also gone down due to the shutdown.”

Baijnath Pandey, a textile processing (dyeing and printing) worker, works in the printing department in a processing unit. From UP, he shares a room in Surat with other migrant workers. He returned from his native place after the factory reopened on November 10, but was asked to go back. “I and a few others have been refused work by the labour contractor. I have just returned from my native place and I don’t have cash. I searched for the job, but nobody wants to hire at this point. I have my meals at a hotel where I have a credit account and I have told him that I will repay it as the money comes. I have decided to go back home and come back when things get better. There is no way out for survival in Surat,” says Pandey.

Federation of Surat Textile Traders Association President Sanjay Agrawal says, “We were hoping to get good business in November and December, during Pongal and the marriage season. Due to cash crunch, people are not ready to spend money on clothes.”

The textile goods transporters in the city share the same fate. They carry hundreds and thousands of parcels in the trucks and deliver them to other states. The textile goods transport sector is also badly affected as majority of trucks are not plying.