With the economic slowdown hitting the once flourishing textile sector in prosperous Punjab the hardest, tens of thousands have been rendered jobless, trains are overflowing with ‘jobless refugees' returning to their villages, starvation and suffering stalk the landscape and factories are shutting down
Akash Bisht Ludhiana, Hardnews
Hundreds of migrant labourers, almost all of them from Bihar and eastern UP, inadequately dressed for a chilly evening, many of them shivering, stand in long, endless queues at the railway ticket counters of Ludhiana Junction. The queue gets longer every minute. The crowd spills all over the main lobby. No one is ready to budge from the allotted space, or else they miss the train. There is chaos. The cops find it difficult to manage them; they hurl abuses, hitting them with lathis. Clearly, even the police treats them as second class citizens.
Outside the railway station, large groups of men, women and children rest on their suitcases and handbags waiting for the next train home. Smoking bidis, playing cards, cracking jokes, they comfort themselves with make-shift fires. "We are going back to our villages since there is no work in Ludhiana. There are no jobs in the textile and bicycle industries and we can't afford to live in this expensive city without any income. I have children to feed back home, so I would rather be there with them and find some temporary work to cope with starvation," says Shambhu, a migrant labourer from Bihar. He is unaware of the reasons behind this mass job drought, but vaguely presumes that there is some kind of slowdown in the market. "The traders say that things will be fine soon and then I can return," he said, really, not believing his own words.
The local market is brimming with restless salesmen trying to sell woolen garments at throwaway prices; but there are hardly any buyers. But this doesn't deter them - they keep coming up with funny one-liners to woo customers, persuading and cajoling them. Mostly, they don't succeed. "Business has never been so bad during winter. Just six months back this market was bustling with buyers and even 10 salesmen weren't enough. Now I have only two. I had to let the rest of them go as we have no business and I was forced to cut my expenses," says Ramanjeet Singh of Ludhiana Woolens. Several other small traders in the market narrate similar stories and predict that if things don't change for the better they will have to look for other options to support their families.
The textile industry's share in the country's GDP in 2007-2008 was 4 per cent and accounted for 13.5 per cent of Indian exports. The textile sector is the second largest employer after agriculture. The crisis is sharp and of devastating proportions. Its magnitude is huge and runs deep. This despair in the working class is unprecedented.
As many as 3,50,00,000 workers were employed directly or indirectly in 2007 in the sector. More than 7,00,000 people have been axed since 2007 and the textile ministry expects that another 5,00,000 employees are expected to be out of work by March 2009. This has created panic within the trading community in all the major textile hubs of India, including in Ludhiana.
In Ludhiana, rickshawallahs, coolies, daily wage earners, hotel staff, travel operators, bus conductors, traffic policemen and roadside chaiwallahs are deeply aware of the slowdown and they all have a point of view. Unaware of the real economic reasons, or its complex big business origin, they blame the late onset of winter and inflation for their plight. Some who read newspapers call it a "foreign phenomenon". But all of them are unanimous: Things have never been this bad in Ludhiana.
"Most of my friends have been asked to go back to their villages since there is no work here. I am not sure how long this job will last. There is hardly any production in the factory, so why would the owner have a large workforce?" questions Ramdin, a textile worker.
Near the railway station a cluster of ‘invisible' textile mills operate in complete anonymity in small gullies and bylanes. It's difficult to notice them from the main road. One can differentiate a mill from a residential building by the smoke and noise of generators that emit out of it. In one such mill, SP Singh sits in a small, dingy room monitoring workers while his friend, the ‘maalik' (owner), is out. Singh is a textile engineer by profession and has been associated with the textile sector for more than a decade. Praised by everyone for his expertise in the sector, he was recently elected general secretary of the Textile Professionals Association. Ironically, even he has been jobless for more than a month now owing to the ongoing financial crisis that has devastated the textile sector of Ludhiana. He says that since October 2008 -- when recession began to spread its tentacles across the globe -- thousands of skilled and unskilled labourers have been rendered jobless in this textile hub of north India.
The export sector's share of the textile business in Ludhiana is ‘40 per cent' but the sector has come to a standstill with no new projects and abandoned contracts. Buyers are refusing to accept consignments and there are delays in payments by various firms in the US. Ajit Lakra of Lakra Industries and General Secretary of Knitwear and Apparel Exporters Organisation (KAEO), said that overall exports were down by 30 per cent and most of the units in Ludhiana were operating only at 40 per cent capacity. "Some of the US firms that exporters in Ludhiana dealt with have filed for insolvency while others are under huge losses. This has created panic among exporters as one-fourth of the country's total garment exports go to the US," informs Lakra.
Additionally, the depreciating rupee against the dollar would have helped the exporters as their margins in rupee terms would have increased, but the global financial malady has hit the exporters badly and their US-based customers are now asking for hefty discounts. Echoing the views of the textile fraternity, SK Jain, Chairman, KAEO, says, "It has become almost impossible for the exporters to meet their target this year due to these instabilities. Last year when the rupee appreciated at Rs 38-39 against the dollar, exporters looked for hedging options and booked dollars at Rs 40-42. We thought that hedging would help us just in case the dollar fell even lower and now we are trading at Rs 40-42 irrespective of the dollar crossing Rs 50."
Dinesh Kumar, owner of KK Textiles in Ludhiana, says the demand for different kinds of fabric by exporters has been down by more than 20 per cent due to which many firms, including his firm, had to opt for downsizing. Explaining the situation, Kumar said, "The textile industry at present is trying to extract maximum work with minimum workforce."
To revive the ailing export sector, the government has announced fiscal stimulus packages. However, exporters maintain that this would hardly be of any help as the markets are operating in extremely sluggish conditions. "The stimulus packages announced are inadequate and negligible for the textile industry compared to what the competing nations have offered to their industry to overcome recession. We want the government to have a re-look at the submissions made by the textile industry; they should announce a new package to boost textile exports as soon as possible," says Jain.
There is not an iota of doubt that the export sector in Ludhiana has been under recession but the domestic market still saw a ray of hope. But the fact is that with the domestic exchange and markets plummeting, consumers in India curtailed their spending resulting in significant slowdown in the domestic segment. Cost of production of textile yarns, fabric, woven and knitted textured yarn in India is much higher than in China, Bangladesh, Brazil etc. Also, since June 2007, domestic cotton prices have increased by 35-40 per cent while textile demand has been slow. Shortage of skilled labour is another factor that is hurting the textile industry in Ludhiana. "Labour from UP stopped coming to Ludhiana long back, the Nepalese stayed back in their country after the Maoists came to power, while the Biharis have found work with NREGS in their state. There is a surplus of unskilled labour, while there is a shortage of 25-30 per cent of skilled labourers," says SP Singh.
Inside the dyeing unit of Sahyog Enterprises workers sit in groups with no work on hand. Jasmail Singh, owner of Sahyog said, "A few months back I had double the workforce and no one had time to breathe. Now we are hardly producing anything as there is minimal demand even in the domestic segment."
With recession, exporters have decided to move to the domestic sector putting the fate of many small and medium enterprises (SMEs) in uncertainty. "It's about survival of the fittest. If we don't enter those segments then we will be on the road, so people are re-strategising and restructuring. Some have even decided to work on lesser number of products and produce lesser volumes to see through these bad times," says Sanjiv Gupta, President, Apparel Exporters Association of Ludhiana.
Power is another factor that the textile fraternity in Ludhiana blames their woes on. All units in the city get power for only five days. During this phase there are frequent power cuts raising the production costs five-fold. "Generators run all day long increasing the cost of production in these terrible times. The government has taken no notice of it and hence new units are being set up in other states like Delhi, the National Capital Region, Uttarakhand and Gujarat, among others, where state governments give various subsidies," explained Gupta.
Amid this all-round despair and crisis the worst sufferers of recession are the poor migrants who are finding it difficult to even feed themselves or their children in these tough times. They are left with no option but to return home to a life of abysmal poverty, hunger and destitution. "I will die hungry here so why shouldn't I go back to my village and die there with my children? Atleast I will die peacefully with them in my native place," concludes Manohar Lal, a migrant labourer from Sitamarhi, Bihar, while waiting for the next train home.