Downturn in Business since Demonetisation: Rise in labour, power price singe Surat mills, 16 shuthttps://indianexpress.com/article/india/gujarat-surat-mills-labourers-demonetisation-goods-and-service-tax-gst-5731884/

Downturn in Business since Demonetisation: Rise in labour, power price singe Surat mills, 16 shut

Now the price hike in raw materials like colours and dyes, that is estimated at 20 per cent to 30 per cent per kilogram, has added to the woes. The mill owners have not raised the production cost to remain in the challenging market.

Downturn in Business since Demonetisation: Rise in labour, power price singe Surat mills, 16 shut
For the last two years the textile processing industry (dyeing and printing) has been struggling due to the Goods and Services Tax. (Representation Image)

Hike in labour and power charges, besides high price of raw material and coal are among several factors that have forced as many as 16 dyeing and printing mills in Surat to shut shops in the last three months, leaving thousands jobless.

Dyeing and printing mill owner D K Agrawal, who had shut shop in Pandesara GIDC around one month ago, said for the last few months, he was facing losses to the tune of Rs 10 lakh to Rs 20 lakh.

“The business had not been running smoothly since notebandi (demonetisation in 2016), followed by introduction of Goods and Services Tax (GST) in 2017. The present situation of the textile industry is not favourable due to hike in the prices of raw materials, power and coal, besides several other factors. Now to overcome the loss, we have decided to give our mill on rent. But nobody has come forward as of now,” said Agrawal who has also scrapped his machinery.

For the last two years the textile processing industry (dyeing and printing) has been struggling due to the Goods and Services Tax.

Advertising

Now the price hike in raw materials like colours and dyes, that is estimated at 20 per cent to 30 per cent per kilogram, has added to the woes. The mill owners have not raised the production cost to remain in the challenging market.

South Gujarat Textile Processing Association president Jitubhai Vakharia said the 16 textile printing mills in Surat city had shut down in last three months after they failed to compete in the prevailing market situation. “The industry has experienced hike in the labour charges, followed by price hike in raw materials, power and coal. The processing charges had been hiked during last Diwali,” he said, adding they had made representations to the state government before the new textile policy that came into being last year.

“We had made representations that certain relaxations should be given to the industry in terms of power rates, but nothing has been done so far. So the weakest in the industry could not survive and shut their business.”

He added the only way to save this industry is to come up with certain schemes and subsidies.

Now the factory owners are looking for business possibilities in other sectors.

“We have sold all the machinery and now we have decided to shift to other business. We will wait for a few more months. The labourers will get job in some other mills.” said Agrawal.

There are at present 350 dyeing and printing mills in Surat, wherein lakhs of people are employed. The major work force into the dyeing and printing sector comes from UP, Bihar, Maharashtra and Odisha among other states.

Apart from the dyeing and printing mills, there are over 6 lakh power looms in the Surat. Besides, there are over 65,000 textile trading shops in around 150 textile markets of Surat city. The sarees and dress material made in Surat are sold across India.

Follow the Lok Sabha Elections 2019 real-time on IndianExpress.com/elections. Check the Lok Sabha election schedule, your Lok Sabha constituency details as well as where Narendra Modi and Rahul Gandhi are campaigning in the Lok Sabha Election. On Twitter, follow @Decision2019 for the latest news and analysis.