Small is no longer beautiful for the powerloom sector in Surat. Considered to be the backbone of fabric-making in this textile city, powerloom units are going through a tough phase after the implementation of the Goods and Services Tax (GST) and last year’s note ban.
“GST and demonetisation are not the only factors for the problems of the powerloom industry. But they added to the woes of the powerloom sector,” says Ashish Gujarati, president of the Pandesara Weavers’ Cooperative Society Ltd.
Rough slide
Even before the GST and note ban, the powerloom sector in Surat was already battling outdated technology and competition from cheaper Chinese fabric. But the GST seems to have hastened the slide.
Industry estimates of the slide are worrisome.
From an average of 40 million metres a day, Surat is now producing 20 million metres since June.
Every day, 300 to 400 powerlooms are being sold off as scrap and conservative estimates of job losses put the number at 30,000 workers, mostly migrants, in the past one year.
“I think 10% of the textile industry may have been hit by recession but 90% are functioning now. And most workers have found re-employment,” says Bharat Gandhi, former president of the South Gujarat Chamber of Commerce and Industry, who owns a textile manufacturing unit.
Mr. Gandhi admits that the government could have handled the GST issue better. “It is like asking a Class 1 student to take the exam of Class 11. First of all, there was never any tax on textile, only on yarns. Secondly, those who do job work on contract from bigger units can’t afford the GST online infrastructure,” says Mr. Gandhi who now heads the Federation of Indian Silk Weavers.
To allay the fears among textile manufacturers and traders, on Sunday, the Surat unit of the BJP organised a meeting with Finance Minister Arun Jaitley.
Traders said Mr. Jaitley heard them patiently and asked them to form a committee that can represent their problems to his Ministry’s officials.
The Patidar factor
But many powerloom factory owners point out that more than GST, it is the Patidar factor that will play a bigger role in elections.
“The GST won’t impact as much as the Patidar factor in Surat,” says Maheshbhai Ginwala, owner of a small manufacturing unit.
Industry insiders say that of the 30,000 powerloom factories in Surat, nearly 60% are owned by Patidars or Patel.
And they can influence four seats — Varacha, Kamrej, Karanj and Katargam — in Surat city where the BJP had won all 12 seats in the previous Assembly elections.
Mehul Patel, a Patidar, is one such Patidar powerloom factory owner. He says that in the past one year, he sold off 60 powerloom machines and scrap and is now operating with 40 looms.
“The BJP will also get Patidar votes since they have given ticket to so many Patidars but 50% of our caste will back the Congress. I think this time Rahul Gandhi is working hard and doing his homework,” says Mr Patel, who insists on his political neutrality.
“If you see, the BJP has used all their top leaders to campaign but Rahul Gandhi is working hard in these elections and people are taking him seriously. Earlier, it was a walk over, now there is a fight,” says the Patidar factory owner.
