No work or cash: Bihari Migrant workers leave Gujarat for home
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Workers from Bihar, who came to Gujarat for work some five years ago are the worst hit after de-monetization, as they cannot be paid due to the cash crunch. As many as 60 workers have already moved back to their native villages in Bihar. A few others who could not return to their villages, said they are left with no money and will have to return to an uncertain fate and most likely starve. Reports in the media show how badly hit the informal labour sector in Gujarat is by the government’s ill-conceived move.
After the demonetization of Rs 500 and Rs 1,000 notes the consequent cash crunch, many migrant workers have been left with no work forcing them to return to their native places. Rakhial in the eastern part of the city has over 500 garment stitching units, home to a thriving industry, now seems deserted as most units are either shut or working at partial capacity.
For India’s Wage Earners in the Textile, Leather and Jewellery sectors, the past fortnight has been a nightmare: loss of wages and worse, loss of jobs itself: Export Promotion Council
According to the report of the Export Promotion Council provided to Parliament yesterday (November 24) – 4 lakh jobs in three major exporting segments- Garment, Leather and Jewellery have been lost to the central government’s ill-thought out plan of de-monetization. In just the past 15 days. 32.9 million people who work in India’s Garment sector alone and who are paid daily/ weekly wages or salaries have not been paid. They are simply not getting their wages.
The scale of the tragedy is huge. BSP Supremo has called it an “economic emergency”, the CPI-M has moved the Supreme Court to immediately ensure that Rs,1000 and Rs 500 older notes are allowed to be used until December 31 to alleviate the hardships of the people. “There is no cash and there are no jobs,” said Sitaram Yechury, general secretary of the CPI-M. “The government must move and move fast to allow legal transactions and alleviate the hardships. The scale of the tragedy is huge.
The Times of India today reported that the owner of a garment factory in Rakhial, Sarf-e-Alam Shaikh, said half of his workers had to return to their native places because he was unable to pay them. "My business had fallen to 10% after demonetization. We are not getting orders, which is leading to a cash crunch. I am unable to pay my workers and 10 of them had return to their native Bihar," Shaikh said.
Mumtaz Mansuri, who hails from Sitamarhi district of Bihar and works in Shaikh's unit, said many people from his hometown returned as they could not sustain themselves here. "They had money in Rs 500 notes, so they bought railway tickets and went home. I also want to go, but if I go empty handed, what will I feed my family of seven," Mansuri said.
Mohammed Tariq Mansuri, who owns a zardoshi unit in the same area, said his business is badly hit by demonetization. "Two of my workers had to return as I was unable to pay them due to the cash crunch," Mansuri said.
Powerloom weavers claim that over 50 per cent of the workforce has left for their hometowns and those who had gone to their natives for Diwali vacation are yet to return. At present, the industry has less than 25 per cent workers, and they too are waiting to leave once their salaries are done before December 1.
There are 6.5 lakh powerloom machines in the city employing over seven lakh workers.
There are around 400 textile processing units employing over 3 lakh workers. The daily production of MMF fabric is 4 crore metres. The Rs.40,000 crore MMF sector in the city is passing from a tough phase after the government announced demonitisation of the Rs.500 and Rs.1,000 notes on November 8. Industry experts said that around 95 per cent of the wages to the textile workers are paid in cash. Very few big units have opened bank accounts of their employees with the cooperative and nationalized banks. As per the rough estimate, the textile workers remit over Rs.500 crore to their near and dear ones in their native villages in Odisha, Bihar and Uttar Pradesh. Usually, the family members of the textile workers back home keep the cash in their houses and do not invest.
“The situation is grim for Surat's textile sector. The industry's production capacity has reduced by almost 70 per cent since November 8. We pay the wages in cash but as the old notes have become invalid and cash supply is limited, we won't be able to cater to the workers by the end of November,” said Jitu Vakharia, president of South Gujarat Textile Processors Association (SGTPA). 2 Ramnaresh Yadav , a labour contractor in Pandesara said,
“Many units have paid advance wages to the workers. On daily basis, the workers are standing in long queues to exchange old notes. Once they get the money, they move out of the city, because they have to exchange old currencies at home as well.” Vakharia added, “The workers are leaving because they have to exchange scrapped notes lying in their native places. Those who had gone on Diwali vacation are yet to return.
The industry has only 25 per cent workforce at present.” Leader of the weaving community, Devesh Patel, said, “Over a dozen of my workers left for their hometowns in the last three days. They had their life savings in form of cash in their houses. Since the old notes have been scrapped, they have rushed to exchange them with new currency . Now, they may come only after December 15.” Ashish Gujarati, president of Pandesara Weavers Association said, “We are running our units eight hours a day. Around 50 per cent of the weaving units are still closed as the workers are yet to return from Diwali vacation. We can't stop the workers from leaving the city due to the present situation.”
Cash crunch forces 60% Morbi ceramic units to close Workers Leave For Their Home States
Demonetization of Rs.1000 and Rs.500 notes and the resulting cash crunch seem to have virtually crippled India's largest ceramic cluster in Morbi. Faced with a liquidity crisis, the majority of ceramic tile manufacturers have closed down their units and many more are likely to follow suit.
“We surveyed around 470 manufacturing units operating in the cluster and sought their feedback on the impact of liquidity crisis on their production. Sixty percent of them said they had already closed their units down and 20% would stop production in the next few days,” said Nilesh Jetpariya, president, Morbi-Dhuva Glaze Tiles Association.
Out of total 650 units engaged in making of various types of ceramic tiles in Morbi, 450- 500 units are expected to shut over the next one week. Currently, only those units are operational which have prior commitments on orders to fulfill.
“Production unit owners do not have cash to pay their labourers who are mainly from Uttar Pradesh and Bihar. Many of these workers do not have bank accounts. With caps on withdrawal, we are unable to draw required cash from the banks,” Jetpariya said.
Transportation is another challenge that the industry is facing as transporters, too, tend to ask for cash payments. As a result, supply of raw materials and dispatch of finished products have been adversely affected. According to ceramic tile makers, the Morbi cluster is witnessing a daily production loss of Rs 15 crore as several units are closed for the past four days. Many workers have been asked not to report for work and some have even returned to their home states.
“The cluster provides direct employment to 1 lakh workers and employment to around 80,000 has been impacted,” said owner or another production unit in Morbi. The industry players are demanding that the government should increase the withdrawal limit of Rs.50,000 from current accounts. The ceiling should be set on the basis of turnover of industrial units. If the liquidity issues persist, the industry may take around 6 months to get back on track.