Updated: February 2, 2021 10:52:57 am
LIKE MANY other small and medium entrepreneurs in India, 32-year-old Vignesh Kumar raised funds for his Tirupur-based small textile venture from gold loans. When he started his small textile unit in 2016, his assets were his five years of experience at a garment factory, a degree in B.Sc Apparel and Fashion Technology and a capital of Rs 2 lakh. His business saw many ups and downs since then, before it crashed — three months ago.
What is left with him is a debt of around Rs 8 lakh, on which he pays interest. He had to vacate the building he took on rent. Most of the 30 workers dependent on his business returned to their villages or found odd-jobs to survive. And a few are still roaming around in Tirupur, dejected and drunk.
The Budget Connection
The Finance Minister has announced a new scheme — Mega Investment Textiles Parks (MITRA), which will offer plug and play facilities to companies. It will help generate jobs and create global champions from India.
But Kumar says he is optimistic. He does not want to blame anyone or anything. The turbulence that hit his business, one after another, affected most industrial clusters across the country — demonetisation, GST, and, as businesses were limping back to normal, the pandemic.
When Kumar started his unit, he was largely dependent on export surplus fabric to make womenwear: t-shirts. After production, he would sell them to wholesale dealers in Chennai or auction them at the local market.
“My investment was Rs 2 lakh and there were times when we used to produce up to 1,500 T-shirts a week with three workers,” he says. The three were Kumar himself, his wife and a cutting master he hired.
After demonetisation ravaged businesses, towards the end of 2017, he started focusing on school uniforms — the first order came from a Chennai school. “It was worth Rs 3.5 lakh for shorts, t-shirts, socks and belts for about 600 students. It was a great reprieve,” he says.
In 2018, he got orders from two more schools, business worth around Rs 7 lakh. In 2019, two more schools came in. When the pandemic struck last year, they were finalising orders from four more schools. “Price was quoted, deal was sealed but… Our turnover this year would have been Rs 30 lakh.”
Except a few big players with full-fledged production units, most Tirupur units run on a chain system in which a product travels through different independent units before returning to the producer. Kumar had three cutting masters who would cut clothes. It would then go to other units in the neighbourhood, each dedicated for specific work – stitching, collar, cuff, button, quality check before ironing and packing. This chain suffered when the pandemic struck.
Closure of Kumar’s unit alone directly affected jobs of about 30 workers in different units, each dependent on three or four producers like him. According to him, some who lost jobs returned to their villages, mostly Thanjavur, an area that forced many farmers to travel to Chennai, Coimbatore and Tirupur as migrant workers following a severe drought and demonetisation in 2016-17.
Kumar is not sure when to restart business, if ever. “There are many schemes, loans, so many announcements from governments… None helps when you need money. Most of the businesses like ours survive on loans against jewellery or pledging land documents in our private circles. When banks reject our requests, it is this money we borrow on mutual trust that keeps us alive,” he says.
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