‘Government policies killing the knitwear industry’

Apart from being at the forefront of the organised trade union movement in Tiruppur, K. Kamaraj, president of the Banian Workers Union, which is affiliated to the Centre of Indian Trade Unions (CITU), is a chronicler of the movement in the town whose knitwear industry does multimillion-dollar business every year. Two booklets authored by him, “The Banian Worker’s Struggle” (January 2000) and “Get Together to Protect Banian Workers’ Rights” (August 2009), highlight the risks labourers face and trace the origin of the movement. He outlines the crux of the problem in two sentences: “Merely because someone spent Rs.10 crore to set up a modern factory with sophisticated machinery, that person will derive no profit. It is only when the labourer puts in his heart and soul will yarn be transformed into cloth, and the cloth become various kinds of knitwear, and reap profits for the investor.” Kamaraj spoke to Frontline on the problems facing the knitwear industry today. Excerpts:

How have the general issues affecting the knitwear industry in recent times affected labourers?

Before export began in the banian trade, the production was meant to meet local demands. After the 1980s, export began and the industry began to expand greatly. Soon there came a stage when local labourers were not enough to fulfill the demand for workers. In the initial stages, workers from south Tamil Nadu flocked to Tiruppur. As the growth continued, even this was not sufficient and people from north India began to come to Tiruppur in search of jobs. In a general sense, what the workers receive as compensation might be better than what they would earn in their home towns. But this falls short of fulfilling the many needs of the workers’ families.

What were the factors that led to the rapid growth of the knitwear industry in Tiruppur?

The local environment, the factory owners, access to credit—all these together aided the growth of the industry. Until recently, the industry was quite lucrative. Before this industry was established in Tiruppur, the main industry in the neighbourhood was the cotton mills in Coimbatore, Erode, etc. This slowly began to change, and some of the knitwear owners moved into the cotton mill industry as a way of backward integration. This was possible because of the profits from the knitwear industry. Some have also invested in windmills, tea estates, etc. So, from the profits of the knitwear industry, the owners have diversified into other businesses.

Did this mean higher wages for workers?

No. The worker, at each stage, has had to struggle to get even his minimum demands met. The large profits accrued by the owner did not reflect in the wages of the workers at all. Until 1984, there was no concept of a dearness allowance [DA]. Now, there are industries of all sizes in Tiruppur, from those which employ 10 persons to 500 persons and more. But when it comes to the question of workers’ rights, without an agitation nothing has been gained. In 1984, workers went on strike for 127 days for DA. All factories remained closed.

M.G. Ramachandran was Chief Minister at that time. He announced a fixed DA initially. Then, after a committee was formed, this was revised. Only after 1984 did the workers get any of their legitimate demands met. Generally, those from outside Tiruppur find housing, school education and hospital expenses unaffordable. They will not be able to run the household with the income from an eight-hour shift. So, they end up working for 12 to 14 hours. Also, it becomes impossible for a family to live on a single person’s income. So either the wife or someone else also has to work. The situation continues to this day. It has gone to the extent where a labourer, who goes to work at 8 a.m. and completes the shift at 5 p.m., says he has not earned enough. He or she has to necessarily work overtime to support the family.

How much has the government helped the workers and the industry?

We cannot say that the government has supported the growth of this industry to any great extent. On the other hand, the policies of the government are slowly killing the industry. Soon after exports began from Tiruppur, they were giving a good amount as duty drawback. It was reduced to 7.5 per cent recently, and now it stands at 2.5 per cent. Earlier, when Morarji Desai was Prime Minister, it was 32 or 36 per cent. It was reduced with each passing year.

Second, the prices of cotton and yarn are fluctuating too much. What happens as a result of this is that after a factory owner has fixed a rate with a buyer, he suddenly finds that the prices of cotton and yarn have gone up by far too much than he had anticipated. No one can fool the buyer any longer. They are also aware of the yarn and cotton rates as they prevail on the day a deal is being made.

So after an agreement is signed, if the yarn prices go up a few thousand rupees, the entire profits get wiped out. This issue is being felt even now because of speculative trading and because the government will not intervene to help the sector. Add to this demonetisation, the introduction of GST, etc., and you have a picture of what shape the industry is in today.

What is the future of the knitwear industry in Tiruppur?

There was a time when a factory owner would expand capacity every few years. This meant more jobs, too. But given the recent policies, more owners are trying to save their existing units. Some are also decreasing capacity. A few others are cutting down the number of days they employ workers. The employers may not be closing down their units but workers are getting severely affected because the employer is giving them work only for a part of the month. The company still exists and the labourer still has a job, but he is under-employed.

A common problem as a result of this is that many workers borrow from loan sharks. This spirals out of control as the worker is unable to pay off the debt. Neither the government nor the owners have any genuine concern for the welfare of the workers.

If the government does not step in and do the needful, the industry is in for very tough times. There are three things the Central and State governments have to do. One, provide housing facilities for workers because the rent is very high here. As much as 30 per cent of workers wages goes towards rent. We are not asking this for free. The workers’ can pay for this on a monthly basis.

Two, there is no ESI [Employees’ State Insurance] hospital here. This is a city with several lakhs of workers. This city needs an ESI hospital with at least 300 beds. An ordinary family spends anywhere between Rs.1,000 and Rs.2,000 in a normal month on healthcare. This includes mosquito coils and common cold and fever medicines.

Three, schooling. There are lakhs of workers from other States here. If this is done, it will be very helpful for the people.

We are fighting for this. The government is not heeding our demands because we still have not managed to organise an agitation on the scale of the one that we did in 1984.