Crisis looms large

The once flourishing handloom industry in Panipat is today in distress. Geetanjali Gayatri looks at the many problems threatening the industry, which has now begun outsourcing work to Uttar Pradesh

Weavers at work in a handloom unit in Panipat. The number of units in the district is gradually declining. — Photos by Ravi Kumar

Panipat’s romance with handlooms is almost over. The industry which made this Haryana town the handloom capital of the region is now in the throes of a crisis. Employing over two lakh workers, the industry is plagued with labour problems, paucity of export orders and pending payments to suppliers. The biggest challenge, however, comes from the neighbouring China dumping its inexpensive items in huge quantities the world over including India as also the falling value of the dollar.

Rahim Khan has seen this cycle advance before his very eyes. He started working at his loom as a teenager. Today, in his mid-40s, he is a broken man. Sitting solemnly in front of his loom, cotton coating him like a shroud, he tells the story of an industry gone to seed.

The early days

Some four decades back, this district was scripting a success story with its loom and labour. A handful of families which had migrated from Pakistan to India during the Partition chose Panipat as their battleground in the mid-1970s. With just about nothing to their credit, they arrived empty-handed in search of jobs.

At that time, barring a few households which had looms, there was very little work to do in Panipat. Also, most of the families with looms were producing either blankets for supply to the Indian army or weaving khes.

Kalu Ram, owner of a handloom factory in Panipat, is one of the few immigrants from Pakistan who laid the foundation of the loom industry in the district

"It was a question of survival for us and we needed to fend for our families. Begging was out of question. I had only Rs 100 in my pocket and I knew it wouldn’t last forever. After visiting a few villages in the vicinity in search of a job, I decided to buy my own loom. I began with working on that one loom myself," says Kalu Ram Gaba, one of the few migrants who laid the foundation of the industry along with other migrant families.

Now 78 years old, Gaba explains, "Diwan Chand Bhatia was another immigrant from Pakistan who along with three or four others began the loom business around the same time as me. All of us took this up because we were in dire straits and needed every single paisa. I had never thought that a full-fledged business would emerge out of this single loom that I worked on so hard. It is immensely satisfying to see that a strong industry has been built on the foundation laid way back in the 1970s."

Gradually more people joined the loom industry and business began to move out from houses to small-scale units set up in clusters. "The women in the house would sit on the spindle spinning the yarn, while the men worked on the loom. Dyeing, too, took place at home. When opportunities presented themselves by way of greater demand, households began to employ labour to operate their looms and the industry came out of the closet and into the open," remarks Rajbir Singla, general manager in a factory specialising in tufted carpets.

The industry grew at a dizzy pace as more hands joined in much to delight of the locals. It meant creation of greater employment opportunities for them in the form of additional income over and above the earnings from their small farms.

From producing handspun fabric, the industry diversified into products ranging from linen to curtains to carpets even as it moved from handlooms to power looms in the 1980s and subsequently to velvet looms and imported machinery. Panipat emerged as the handloom hub for the region and industrial units began getting export orders by the dozens.

Housing at least 20 exporting units and over 200 exporters, the Panipat handloom industry, says the President of the Exporters Association, Ram Niwas Gupta, has grown by leaps and bounds. However, now, it has reached a point of saturation and the rosy picture is beginning to wear off. The industry with its Rs 2500 crore turnover is now shrinking and 25 per cent of the units have already shut down. The reasons are obvious.

Tough times

"Our biggest bottleneck is getting a Change-of-Land Use (CLU) certificate from the government without which expansion is not possible. Without expansion, we don’t stand a chance of competing with more advanced countries. In fact, we have appealed to the Haryana Government to frame a special policy for exporters and give CLUs to them on priority," Gupta maintains.

With nearly 90 per cent of the handloom units on non-industrial plots, the CLUs have become a necessity for most of these units. The exporters contend that big plots are generally not available and those that are made available have no basic facilities. Another grouse the exporters have is that the real handloom houses don’t get the big plots which usually go to those wanting to make quick money out of land deals. The handloom houses usually have to buy plots through re-sales.

Then, to add to the woes of the industry, their demand for giving textiles the status of an agro-based industry seems to have fallen on deaf ears. Claiming it to be the second most labour-intensive industry, the exporters hold that cotton is the "staple diet" of the handloom units, making it eligible for the status.

In addition, the chronic problem of failed power supply for hours on end, escalating costs of production and the government’s decision to revise the minimum wages of the labour have the industry heading for a disaster, the exporters aver. "While some units have closed, there are others on the brink of closure and still others which are moving out of the state. The industry is just not able to meet the growing expenses. To top it, the government has increased the minimum wages to the labour which is working against the interest of the labour class since the industry is slowly packing up. We sent a representation to the government against raising the wages but to no avail. Now, big houses have outsourced their production," remarks Kuldeep Singla, an exporter.

Panipat’s loss is slowly becoming Uttar Pradesh’s gain with weaving work ironically getting outsourced to labourers there since it works out to be a lot cheaper. "They take our orders and designs and get these made. The ready products are delivered at our doorstep. In this way we are saved the trouble of buying the yarn, identifying ‘masters’ who bring in labour, organising their stay along with other allied expenses. Besides, the ready product works out to be cheaper and the process is hassle-free," emphasises Pradeep Tayal, organising secretary of the Exporters Association.

This, however, is proving to be detrimental to the locals who are forced to look for alternatives to make a living with jobs no longer available at the handloom units. Some third generation families employed at the looms say they are worried about making both ends meet if this trend is not nipped in the bud.

Thirtyeight-year-old Shamshudinn, hailing from Bareilly and working at one of the pit looms, says he knows the looms like the back of his hand. "For as far back as I can remember, I only recall accompanying my father to the unit. I used to spend the day learning the technique and have never thought of exploring any other vocation. However, with orders being handed over to labourers in UP, we will soon be out of jobs," he rues.

The labour is an exploited lot in Panipat. With no organisations to watch over their interest, they live pitiably, just eking out an existence. The workers employed in every unit live in the most inhospitable conditions with just a dingy room for the entire family. Stench fills the air around them and they don’t even have toilets. The health problems only magnify the misery. Breathing in cotton flakes the whole day, they pay for their work with their lives, suffering from bronchial infections and getting a pittance in lieu of the laborious work they do.

They get what the "master" thinks they deserve. Since there is no permanent labour in an industrial house, it is the "master" who herds them together from Bihar and UP and gets them to a house which has orders and work. The management has nothing to do with the labour directly and operates through the master who rules over "his men" at the looms. In case there are no orders in the unit he has brought them to, he has every right to ask them to just pack up and move to a more lucrative business unit with export orders.

However, in view of China going all out in producing and dumping products by the tonnes, the orders to export houses, too, are few and far between. Their number has significantly dropped in the last couple of years owing to stiff competition from machine-made inexpensive Chinese products which have flooded the markets. And, without government support, the industry is gradually failing to deliver and meet
deadlines.

While the exporters manage to get their "pound" of profit by cutting the payments to the suppliers in the name of debit notes for defaulting on supply by claiming dissatisfactory products, late supplies or on any other ground, the suppliers maintain they too are just as exploited as the labour class.

"There is a shortfall of export orders because the buyers want the products at the same rate as before. We cannot meet their demand because the rate of the dollar has fallen and our rates have correspondingly increased. There is an ominous slump in the market which is indicative of things to come. Taxes, VAT, hoarding of cotton are all problems we deal with every day. For, how can we pay out of our pocket to sustain a dying unit?" asks a harried Deepinder Kumar, supplier to a number of export houses.

Today, Panipat’s handloom industry is headed for a crisis. Each player in the game is dependent on the other for his share of earnings and yet, together, they are caught in a vicious cycle where the idle labour awaits work, the exporters await orders, the suppliers their pending payments and the industry, a saviour.

Threat of closure Workers at the loom breathe in cotton flakes for long hours, making them prone to bronchial infections Though the exact number of looms with which the industry began in Panipat is unknown, the numbers today stand at 40,000 looms in over 2100 units in the city. Though the number of looms has gone up in the past just like the exports from this handloom capital of the region, the number of total units is gradually falling at the rate of five per cent a year. Officials of the Industries Department, Haryana, maintain that while export figures at first glance may seem to have risen steadily, that is not the case. In 1999-2000, the figure stood at Rs 680 crore. Four years later, exports grew to a whopping Rs 1600 crore in the financial year 2003-04. However, in 2006-07, the rise was not so dramatic, growing only by Rs 660 crore to Rs 2260 crore. The irony lies in the fact that while the number of looms and exports has increased, most of the work is now outsourced to UP. Officials also point out that the withdrawal of subsidy of 20 per cent in the initial investment to set up a handloom unit under the Rural Industrialisation Scheme also adversely affected the industry, leading to closure of a number of handloom and ancillary units.