The Clothing Manufacturers Association of India (CMAI) has urged the government to consider extending measures, which were given to the MSMEs in manufacturing sector, to garment retailers and traders as well.
The garment industry has said that enhancing of the upper limits of the sector, the merging of the manufacturing and service sectors, and the addition of a turnover based criteria, will all go a long way in enabling many more enterprises, especially here, to take advantage of the various schemes under the MSME umbrella.
The additional loans backed by the government guarantee and requiring no collateral or guarantee of the MSME, will enable many of its members to get the much-needed working capital assistance that the industry needs to kick start operations after the lock-down ends. However, it is important that the banks respond to these measures and implement the loan scheme within 4-5 weeks to allow quick start to operations to help the economic growth in the country.
"Since a majority of the garment manufacturing units would come under the MSME criteria, we believe these sets of measures would be a boost for our sector," said the association.
CMAI also sought support of the government to small manufacturers by providing direct grants for payment of wages till September. Small manufacturers will not be able to sustain the losses from lockdown and subsequent slowdown in demand. Absence of such grant could lead to up to 30 per cent of the units closing down permanently leading to 10 million job losses in the textile and apparel value chain.
Rahul Mehta, chief mentor at CMAI said that very few factories have opened for regular production. Karnataka, Tirupur, and Ludhiana are some of these areas where some production may have started. Essentially the challenge is for whom and what do they produce? Since most of retail has not yet opened up, there are no orders on hand. Retail sales are expected to be at half for the next 3 months, hence with 40-50% business, many factories will find it difficult to remain viable. There are about 75,000-80,000 units across the country.
Getting adequate manpower to ramp up production to meet the demand is one of the major challenges the textile industry is facing, said Sivaramakrishnan Ganapathi, managing director of India’s largest apparel exporter Gokaldas.
"We are now struggling to serve the orders we have. We are struggling to get workers, as there is no public transport. If we dont serve the orders people may shift back to Indonesia or Vietnam, wherever there is capacity. We want to start operating more and get back to normal production", he said.
For the first quarter, the company could not operate in April and has been operating at half or less than half the capacity since it only has 40 per cent of the workforce which is coming. More than 50 per cent of the first quarter is lost from a production standpoint. Order book has suffered a decline of 25-30 per cent.
To address the labour issue, the Apparel Export Promotion Council chairman A Sakthivel said the government should consider to allow 12 hours shift instead of 8 with normal wages. Normal rate should be considered for the extra four hours rather than at twice the wage rate.
Citing the amendments made in states like Gujarat, Madhya Pradesh, Haryana, Himachal Pradesh and Punjab in their rules under the Factories Act, he said: “Workers (in the States mentioned) would again be allowed to work for 72 hours a week (up from 48 hours) in the new dispensation.”