Samundipuram, Wednesday, 7.30 a.m.
The yarn bobbins army on the bassinet of the annular accord apparatus move seamlessly. A alternation of beefy movements later, the fair yarn churns out some added fair cloth, continued from beneath the butt of the knitting machine. Venkatachalam, in his mid-50s, stands watching his machines, with his easily above abaft his back, in his assemblage in Samundipuram in Tiruppur.
The air is blubbery beneath the apathetic beef of the machines and the abiding abeyance of fair dust of the yarn, accentuated by the chicken ablaze bulbs lighting up from beneath anniversary active machine, casting continued alive shadows. Bales of yarn cat-and-mouse to be fed into the apparatus and bales of bolt knitted from the yarn accessible for the supplier are ample on the ancillary of the boutique floor. This is what charcoal of the Diwali stock, he says.
Venkatachalam had accomplished the knitting assemblage at 6 a.m. to run the machines. “My aboriginal artisan will appear in at 8.15 a.m,” he says. Until aftermost week, this assemblage of 16 machines ran with two workers on ceaseless shift. They were paid Rs.3,000 anniversary every Saturday.
This Monday, >a anniversary afterwards Prime Minister Narendra Modi declared the absolute Rs.500 and Rs.1,000 addendum invalid, Venkatachalam had cut bottomward two accouterment to one. This has meant alone alternating canicule of assignment for anniversary of the two labourers. “Now, I’ll pay Rs.1,500 anniversary to the two workers this week. No alpha yarn has come, and alike if it did, I can’t run the machines afterwards cash,” he says. Aftermost anniversary he produced 600 kilogram of cloth, adjoin the accustomed 1,500 kilogram per week. He receives cheques from the supplier. But his accomplishment are in cash.
Life in the apathetic lane
Some 18 kilometres abroad in Pandian Nagar, Shakthivel is acrimonious up the aftermost of the bolt bundles he had commissioned Karal Marx for cutting. Marx owns a rib-cutter that cuts fabrics into bundles of ribbons that are again stitched up as folding on collars and sleeves of T-shirts. His rib-cutter occupies a 50-sq.-feet amplitude abstracted off his less-than-modest active quarters. The aftermost of the bundles actual from the Diwali banal supplied by bodies like Shakthivel are the ones larboard for assignment for Marx.
At the bottom of the rib-cutter is a can abounding of petrol. “Oh that. I had to ample petrol for my moped. But they banned change and I was afflicted to buy petrol for the absolute money,” says Marx.
Shakthivel runs a bond area with seven labourers including his wife. The supplier provides him with cut cloth, and the bolt runs through bristles machines to appear as a adorned top. “Just my type” declares a blanched babe gazing out of a blush printed top, on the array aloof finished.
Only two canicule ago, Shakthivel had asked three of his workers not to come. “I alone acquire old cash. And no alpha orders had come, and there were convolute queues in the bank.” He has to pay Rs.4,000 anniversary to anniversary of them. He affairs to wind up the actual work, and lock up the area for the blow of the week. The hire of Rs.6,000 for the bond area and abode hire of Rs.5,000, both due for the 10th, was not accustomed with old cash. Bending bottomward to acclaim aces up her two-year-old son comatose on a cut bolt on the floor, Shakthivel’s wife Swarnalatha asks him if they should go to Palani, to be with their relatives.
Abu Baquar Siddique, Shakthivel’s arch tailor, is a man of quiet pride. He collects allotment of his annual accomplishment daily, the Rs.200 from Shakthivel every black goes into affairs 2 kilograms of rice for Rs.100 and added advantage for a fresh-cooked banquet for his ancestors of four. On Wednesday, Shakthivel gave him Rs.500 of the old agenda to course over.
When the accomplished anniversary saw households active on credit, goodwill, assurance and advantage of the bounded grocers, Siddique never kept an ‘account’ of acclaim with any grocer. “I never acquire before. That’ll advance us to buy more, blot more.” So, aback the aperture banned to acquire his money, he artlessly migrated to PDS rice. But his two adolescent boys are clumsy to eat the poor affection allowance rice.
Grinding to a halt
These men (and women) are allotment of the apparel accumulation alternation that swells at the everyman end to accommodate abounding commutual domiciliary units. This alternation alternation hinged on assignment orders from the baby supplier, to a micro unit, to the last-mile domiciliary assemblage — until demonetisation chock-full it in its tracks. Slowly, units are alpha to bullwork to a halt, aggressive to breeze this chain.
Two calm suppliers that supplied bolt to Shakthivel’s bond area bound bottomward this Monday. The aforementioned two suppliers had supplied bolt to 20 added units with workforce of 20 each. Between them, the two suppliers anniversary had a workforce of 100-150 workers. “They acquire to pay me about Rs.20,000-Rs.30,000,” says Shakthivel.
Small suppliers and abased tiny units that attending to the supplier for assignment are alert of axle up assignment commitments and resultant contributed wages.
On Wednesday, the South Indian Collar Shirt and Baby Manufacturers Association (SISMA) anesthetized a resolution to downscale from 15 accouterment per artisan per anniversary to six shifts. “Units are already laying off non-salaried workers,” says K.S. Babuji, accepted secretary, SISMA.
Eashwaramoorthy is a calm supplier affairs to buyers in Mumbai and Delhi. His assemblage with a 20-man workforce has now pared bottomward to aloof three workers. The blow were asked not to come. “The accepted annual abandonment absolute of Rs.50,000 is not accustomed by banks here. How do we pay,” he asks.
Demonetisation for the apparel industry came at a time aback the buyers were on the border of clearing payments of the suppliers for the Diwali despatches above the country. The buyers are now clumsy to accomplish coffer transfers to the suppliers above Rs.49,000, and that too alone afterwards the suppliers bagman assorted copies of affidavit for coffer verification.
Tiruppur’s layered system
The apparel industry in Tiruppur is fabricated of three types of units: exporters, merchant exporters who accept farm assignment from exporters, and calm suppliers.
Exports — a Rs.22,000-crore about-face business — are primarily cashless. Yet demonetisation has tangentially afflicted exporters because they acquire to appoint peripherally with cash-based subcontracts for ‘job works’ such as knitting, buttoning, baby servicing, printing, packing to merchant exporters. The merchant exporters themselves are baby units with a workforce paid in cash.
The banknote crisis has apoplectic 25 per cent of subcontracts commissioned by exporters, says T.R. Vijaya Kumar, accepted secretary, Tirupur Exporters’ Association (TEA), that has over 1,000 members. The exporters will acquire to accord with amends of 20 per cent added costs on shipments that will now be airlifted.
It’s calm suppliers who are adverse the demonetisation calefaction the most. They accommodate micro units and sections that are partly, abundantly or absolutely run on cash.
The apparel industry in Tiruppur has 8 lakh employees; 4 lakh in absolute application and addition 4 lakh in accessory units such as knitting, dyeing, printing, embroidering, spinning, accessories. Of this, 20 per cent or 1.6 lakh workers are estimated to be unorganised workforce. There are 2,000 small, boilerplate and tiny units — now adverse the anticipation of phased lockout — that accommodate assignment to this unorganised workforce.
Early this year, the TEA had met the Prime Minister during his appointment to Coimbatore to present a ‘Vision 2020’ certificate to him that envisages accretion the apparel industry’s about-face to Rs.1 lakh crore by 2020.
When demonetisation was announced, the exporters had animated the decision. The TEA estimates the about-face of calm units at Rs.7,000 crore from accounted affairs and addition Rs.7,000 crore from banknote transactions. On the added hand, the unorganised units alone run on banknote are estimated to acquire a about-face of Rs.15,000 crore.
For the exporters, this is a ‘parallel economy’ with a accumulative Rs.22,000-crore turnover. “This accumulation alternation runs on cash, weeding out taxes. If this abridgement is integrated, again there will be a akin arena acreage for all,” says Vijaya Kumar.
Khaderpettai, Wednesday, 3.40 p.m.
Jeganathan bears a abroad attending as he scans through a Tamil paper. He was authoritative circadian sales annual Rs.10,000-Rs.30,000 on boilerplate out of his 80-sq.-feet shop, ample with bundles of trackpants, T-shirts of all hues. On Monday, he beatific abroad the alone circadian action he had. “Yesterday, I downed the bang by 4 p.m.,” he says. Not a distinct auction on Wednesday in the boutique he co-owns with his brother.
Khaderpettai bazaar represents that alongside abridgement that Vijaya Kumar was talking about. It has over 3,000 shops, broad and retail and godowns, run alone on banknote transactions. Khaderpettai lends the retail-end abutment for the calm apparel suppliers. They accommodate the annual for business for the abate accomplishment units, whose accomplishment orders articulation abundantly on the business action of Khaderpettai. Some of the apparel godowns are beeline extensions of the accomplishment units.
The hustle of Khaderpettai is missing aback the demonetisation. Abounding accept things would attending up already money apportionment best up.
The apparel industry has a aerial labour demand. Attrition amount is 50 per cent, and the boilerplate labour curtailment is 35 per cent. There is a accepted attrition both amid labourers and calm units to crediting accomplishment through banks. Allowance annual entails Employees’ State Insurance and Provident Fund addition from both ends. Labourers, with bordering wages, are not enthused at the anticipation of deduction, and administration are appropriately afraid to contribute.
Demonetisation has addled at the affection of this banknote approach of acquittal of wages. Hence, anytime aback demonetisation, a primarily acknowledged workforce is brief from abate calm units to consign units, which acclaim bacon through allowance accounts. But the adeptness of abate consign units to blot this basic flight of labour will disentangle alone in the advancing days. Also, consign units may not absolutely be cloistral as the alternation involves cash-based merchant exporters too.
Small is no best beautiful
Exporters additionally appearance demonetisation as a commencement to the civic rollout of the Goods and Services Tax (GST), as a move to accompany aggregate into accounting, force baby units to drift to allowance accounts. “Once GST comes into operation in April, there will beneath action and accessible integration,” predicts Vijaya Kumar.
But on the ground, there is addition absoluteness actuality played out. The acquaintance of micro units and sections so far announce a accessible immiserisation of owners and workers.
While labourers aloof may acquire the advantage of brief to an consign assemblage wherever possible, bordering units such as Shaktivel’s bond area or the yarn-knitting assemblage of Venkatachalam don’t acquire that option. At worst, they will acquire to abutting bottomward and move into the labour bazaar themselves.
Forty years ago, Vijaya Kumar’s ancestor had started out with 10 workers and 10 machines. Today, he runs an consign business with 1,500 workers. “If this had appear then, my ancestor would not acquire survived,” he agrees.
This agitate will abate baby units, which are clumsy to migrate, acquire no agency or ability to systemise their business operations. This boring would additionally beggarly that businesses can afterward be run alone by the educated, who can appoint tax accountants, auditors, and committed cadre for documentation. “Today’s tiny units are tomorrow’s above units. This will additionally beggarly bitter start-ups in the bud,” concedes Vijaya Kumar.
Pointing at three shuttered shops in a Khaderpettai lane, a man, who refuses to acknowledge his name, says that about all shops acquire beatific abroad their circadian allowance workers. Until aftermost week, anniversary boutique had a Hindi-speaking artisan to advice accommodate with buyers from above the Vindhyas.
“Do you see knitwear in the artery shops of Chennai, Mumbai, and Delhi? They are from here. The apparel units are showroom; we, Khaderpettai, are for the pavement. The poor buy from us,” he says. “We all started off appropriation endless on our aback and acquire appear to own businesses. We are not educated.”
