COIMBATORE: Every industry has been affected, directly or indirectly, by demonetisation, and the textile industry of Tirupur has been no exception. About one-and-a-half lakh workers depend on some 2,000 small and micro units in Tirupur. Before Nov. 8, they used to work 15 shifts per week. Now it’s down to five shifts per week.
Workers have been paid in dribs and drabs, payments have been put on hold and demand has gone limp, forcing factories to scale down their operations greatly.
Says K S Babuji, general secretary of the South India Collar Shirts and Innerwear Small Scale Manufacturers Association (SISMA). “We haven’t yet received payments for shipments we sent out before Deepavali. Customers do not have the money to pay us.”
He also flagged an alarming trend: workers are quitting, scattering, going home or joining any company that can pay them regularly.
Exports have, however, not been affected, said Raja M Shanmugam, the president of the Tirupur Exporters Association (TEA).
“Paying wages has become a huge problem. People are used to getting paid in cash. But we are unable to pay workers in cash nor can we pay them by cashless transactions. Most of them do not have a bank account. And in the midst of this banks are unable to open new accounts,” he said.
However, some of the larger firms have begun distributing prepaid cards to their workers, so that they can use them for their expenses. According to Raja, they have already distributed around 1,000 cards, which the workers can swipe and a minimum of Rs 49,000 can be credited to each card.
Units that had been operating in the shadow economy are scurrying to sort out their finances, said K Rangarajan, president of the South India Spinners Association.
“Many small units shut down for at least 20 days after demonetisation, just to figure out how to convert their businesses in legal operations. They started functioning again only recently,” he said.
Around 60 per cent of the powerlooms have shut down completely. “Coimbatore and Tirupur powerlooms produce one crore meters of cloth every day and each meter costs Rs 35. As a result of demonetisation and most of the looms have lost turnover to the tune of Rs 35 crore,” said Era Velusamy, president of the Tirupur District Job-workers Weavers Association.
Most of them have asked the government to take steps to save the small and micro businesses. They have also asked the banks to give the units enough money to pay ages.