From bad to worse

Published : Jun 06, 2003 00:00 IST

Workers in Bhiwandi, the country's largest powerloom centre, have lived miserable lives since the advent of the policy of liberalisation; now they face an even bleaker future even as their employers corner more and more concessions from the government.

in Bhiwandi

Bhiwandi's powerloom workers are like sugarcane in the juice machine. We are squeezed until we have nothing left to give.

- Mohammed Munir, a powerloom worker.

MOHAMMED MUNIR, 28, has toiled in the powerloom sheds of Bhiwandi, some 50 kms from Mumbai, for almost a decade. When the looms were shut down on April 1 as part of a nation-wide agitation against the levy of excise duty on grey fabric, he was left unemployed. He got neither his bi-weekly salary, nor any allowance to ride out the crisis. Four lakh workers in Bhiwandi, India's largest powerloom centre where around six lakh powerlooms operate 12 hours a day on an average for seven days a week, suffered the same fate.

Although the looms resumed on April 24 following a rollback of the excise duty, only 40 per cent of them are currently operational. Some of the powerloom owners said that unless the government conceded all their demands they would continue the agitation. "They say they are fighting for us; that's why the looms are closed. But we need to eat and for that we need work", says Munir. He lives on credit as he has no money for food or rent. He says: "It is not that when the looms are working our lives are any better. The strike will end as the losses are hurting the owners too. We will resume work soon." However, not all the workers were prepared to wait endlessly for that day. Unable to cope, about 70 per cent of the workers in the area had left for their villages elsewhere in the country.

Maharashtra has 7.5 lakhs of the 17 lakh registered powerlooms in the country. The State government estimates that in Bhiwandi itself more than 40 lakh people are dependent directly or indirectly on the industry. "The closure of looms in Bhiwandi causes huge losses for the owners, but more important, it affects lakhs of families all over the country," says Baliram Chaudhury, a trade union activist in Bhiwandi.

Most of the workers come from Uttar Pradesh, Bihar, Andhra Pradesh, Tamil Nadu and Karnataka. They come away owing to lack of income from agriculture or slackness in other powerloom centres. Entire families in these States are dependent on their incomes.

In the powerloom centres, everyone is dependent on the industry in one way or the other. Baliram Chaudhury said: "If the looms close, it immediately leads to large-scale penury. As is the case with any strike, the only ones who get directly hit are the workers."

Powerlooms across the country were shut down on April 1, in protest against the proposal in the Union Budget to levy 10 per cent Central Value Added Tax (CENVAT) on "grey" or unfinished fabric, which is Bhiwandi's speciality. This duty is over and above the excise duty payable on yarn and finished cloth. The Central government reasons that the grey fabric is the only variety in the CENVAT chain that is not taxed and will now be brought under the new Value Added Tax (VAT) regime. Besides, the government believes that it is time the prosperous powerloom owners came under the excise registration regulations and the tax net. The government believes that they need to become more accountable.

As in the case of other traditional manufacturing systems, cotton textile traders do not keep books on transactions and trade. Extending the CENVAT chain to all the important stages in the fabric-making process is expected to ensure that accounts are rendered and nobody evades tax. Bhiwandi accounts for about 200 million metres of grey fabric a week. At Rs.5 a metre on an average, the weekly turnover is Rs.100 crores. Not a paisa is paid as income tax on this.

But the loom owners argue that the highly fragmented nature of the industry, its close linkages with agriculture and the vast rural employment potential it holds out, justify the sector being left out of CENVAT cover. According to Sandeep Jain, executive director, Powerloom Development and Export Promotion Council (PDEXCIL), there are historical reasons for the low rates of excise duty charged on textile yarn and the rationale needs to be retained in order that looms may continue to exist.

However, as a result of hectic lobbying by powerloom owners' federations across the country, the Central government has suspended the imposition of CENVAT on grey fabric. In early May, Finance Minister Jaswant Singh announced that powerlooms that have an annual turnover of up to Rs.20 lakhs would be exempted from CENVAT. Further, the government has relaxed the precondition of registration for traders of fabrics and yarns. Manufacturers in the textile sector are allowed to pay excise duty first without obtaining registration.

But powerloom owners are hardly jubilant over this. "The exemption will benefit only those who have less than 10 powerlooms," says Dhirajlal Ghaliya, vice-president of the Shri Halari Powerloom Owners and Workers Association in Bhiwandi. "With 10 looms, we touch a turnover of Rs.20 lakhs in four months. The majority of owners will not get any exemption because above 80 per cent of the owners in Bhiwandi operate more than 20 looms. We will have to continue the agitation until the government gives us some relief," says Ghaliya.

STRIKES and closures are not uncommon in Bhiwandi. Lower import duties on fabric, for instance, led to the closure of several hundred powerlooms. Three years ago, the government ordered the Maharashtra State Electricity Board to crack down on those pilfering power in Bhiwandi. This drive affected the profits of many powerloom owners, who subsequently downed their shutters. Thousands of workers, predominantly migrants were forced to return home.

In addition to these problems, Bhiwandi has historically been a communally sensitive town. The people largely belonging to a minority community have faced several riots. Communal incidents have affected production over the years, inevitably resulting in the closure of looms.

Bhiwandi's growth into a thriving powerloom town began with the closure of textile mills in Mumbai and Gujarat over the past two decades. While powerloom sheds mushroomed in Malegaon, Echaklakaranji, Solarpur and Madhavpur, it was Bhiwandi's proximity to Mumbai's textile trading market and its already established handloom mills that made it a viable area for production. In fact, several well-known mill brands now get most of their cloth from looms in Bhiwandi.

The textile trade in these centres combines the practices of a small-scale industry and traditional traders. This is one reason why the concept of taxation is so alien here. However, over the years this once-bustling powerloom town has seen rapid decline, primarily owing to the Central government's liberalisation policies.

According to Premal Udani, president of the Clothing Manufacturers Association of India, developing the highly labour intensive textile and garment sector will be the most logical thing to do. It does not require much skill nor does it require a physical environment. "Instead our government in the name of globalisation comes up with all sorts of skewed policies," he said. By lowering imports duties, it has flooded the market with cheap fabric from China and Hong Kong, thereby jeopardising not only India's fabric production but increasing exports. Bhiwandi, being a central point of grey fabric production, has been hit hard by the new policies, he said. "If you impose taxes on this sector of the industry, our costs will go up and we will be unable to offer competitive prices in the export market. As it is, our exports in the world market are just 2 per cent in textiles and apparel. Against China's 20 per cent and Hong Kong's 33 per cent, our presence is negligible. Even Bangladesh exports more than India." Udani believes that something is terribly wrong with the industrial policy. "We have no labour reforms and too much taxation," he said.

THE powerloom industry in Bhiwandi has for some time now been in a precarious situation owing to fluctuating demand for fabric, power problems and communal trouble. Bhiwandi's workers have had to grab and hold on to any job at any wage for they never know when a loom will close down. Workers like Munir, who are a little more aware than others of the reasons for the recent strike, fear that ultimately the fresh tax burden will be passed on to them in the form of wage reduction.

A government ruling in 1971 set down minimum wages for workers, but rarely are they given the stipulated monthly salary of approximately Rs.3,000. Loom owners have exploited a situation where there is no dearth of labour to pay well below the minimum wage. A trade union activist working in the area said: "Such is the desperation in Bhiwandi that you can pick up anyone off the road and he is willing to work in the loom for any amount."

A worker like Munir earns Rs.1.70 a metre for making upholstery fabric; on lighter fabrics, he would earn Rs.1.50 a metre. Munir works on four machines simultaneously, producing an average of 40 metres if it is upholstery and 22 if it is light fabric such as that for shirts or trousers. Skilled in operating both the "English" and the "Japanese" machines, Munir earns between Rs.1,600 and Rs.1,900 a month. Of this he pays Rs.500 towards rent, Rs.600 for food, which he eats at one of many bishis (eateries, which feed workers two meals a day for a bi-weekly charge). He sends the rest of his earnings to his family in U.P., which depends entirely on his salary.

In Bhiwandi, workers are not given permanent employment. A loom owner, Ghaliya, said: "The workers do not want permanent jobs. They want the flexibility to quit whenever they need to go back to their villages." He says workers want their salaries in full with no deductions. The minimum wage rate, he says, is just something on paper. Bhiwandi has its own system.

Efforts to unionise the workers have not met with much success. "If we show any interest in joining a union, word spreads that we are trouble-makers and no loom owners will be prepared to give us work," says Ramesh Yadav, from U.P. Besides, the existence of several communities as a result of the influx of labour from across the country makes it difficult to organise people. There are too many differences, says Shobnath Bhagu Gond, a member of the Centre of Indian Trade Unions (CITU). Moreover, communal problems over the past four decades have polarised the township.

Lakhs of workers like Mohammed Munir and Ramesh Yadav work in miserable conditions. Several powerlooms are housed in dingy sheds, which have minimal light and hardly any ventilation. There are no toilets, not even water to drink. "We stand most of the time. By the end of the day we are very tired," says Yadav. "If I make even a small mistake on the fabric or if a little grease gets on the material, I can be fired." Yadav has not been to work for two weeks because of a leg injury that he sustained while working on a loom. "The seth would not pay for my treatment," he says.

Several thousands of workers in Bhiwandi suffer from tuberculosis (TB), the harsh working conditions have weakened their lungs. The town does not have a hospital for TB patients and the TB ward in the general hospital was shut down a few years ago.

Although it is classified as a municipal corporation, Bhiwandi does not have the appearance of even a town. It looks more like a sprawling slum. There is very little development in the area as the corporators are fighting among themselves. Open sewers and garbage dumps line the roads. Most workers live in kuccha houses with tin roofs. The Muslim bastis are perhaps the worst off with no water or power supply. People have encroached on land and built huts. Hopeless poverty is seen all over.

A communal powder keg, Bhiwandi has seen severe rioting in the past. Several hundred people were killed in communal riots in 1970 and 1984. Community action by leaders of Hindus and Muslims ensured that the town stayed relatively peaceful during the countrywide riots in 1992-93 following the razing of the Babri mosque in Ayodhya. In spite of these efforts, Bhiwandi has remained a simmering cauldron. It does not take much to cause problems here. In April 2002, a Hindu right-wing activist was reportedly killed because of his campaign against butchers, who he claimed were illegally slaughtering cows. This led to several days of tension in the town. In February this year, Bhiwandi was tense after communal trouble broke out when some people were arrested for transporting cows for slaughter on the occasion of the Id festival. A mob threw stones and clashed with the police while protesting against the arrests.

Over the years, Bhiwandi has become extremely ghettoised, clearly benefiting loom owners and politicians. The workers, thus, remain exploited in more ways than one.

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