Puthanatham garment makers’ plea for collateral-free loans

File photo of a garment manufacturing unit at Puthanatham in Tiruchi district.

File photo of a garment manufacturing unit at Puthanatham in Tiruchi district.  

Faced with delayed payments from buyers and rise in price of raw material in the wake of COVID-19 pandemic, readymade garment manufacturers of Puthanatham in Tiruchi district have urged the district administration to ensure that the units were sanctioned collateral-free credit at the earliest.

The relief was promised by the Centre under the Emergency Credit Line Guarantee Scheme introduced as part of the economic stimulus package, they point out.

Puthanatham, a small village near Manapparai, has grown into a readymade garment manufacturing cluster over the past three to four decades.

The small business units mainly produce shirts, trousers, churidhars and night dresses, besides school uniforms. They source the raw material (cloth) from places such as Mumbai, Surat, Ahmedabad and Delhi. The annual turnover of the Puthanatham cluster, which provides employment to about 2,000 workers, is estimated to be about ₹50 crore.

The industry thrived in the 90s when hundreds of people thronged the village during festival seasons such as Deepavali for purchasing the garments. Though the increase in the number of readymade shops in towns and cities has impacted the industry, about 120 units continue to produce garments and market them throughout Tamil Nadu, Kerala and Karnataka.

Like all other sectors, the readymade garment manufacturing units too have been badly hit by the pandemic. The units resumed operations following relaxation in lockdown restrictions. They are on the threshold of peak production time for the Deepavali season ahead.

“This is the time for us to gear up for the Deepavali season. But most of the units are badly in need of working capital. There has been delay in payment from many buyers due to the pandemic. Besides, with the Bhiwandi hub near Mumbai remaining closed, many of our raw material suppliers have hiked their prices,” said T.A.K. Hidayathulla, secretary, Readymade Clothing Manufacturers Welfare Association, Puthanatham.

Many of the units have also invested heavily in producing school uniforms, he told The Hindu.

“With the schools yet to reopen, they are unable to recover the investment,” he said.

The units have to pay labourers to retain them. “We have to protect our labourers and protect our interests too and, hence, we need to keep producing. Our suppliers [of raw materials] are now insisting on cash and carry due to cash crunch faced by them. On the other hand, we are unable to press our buyers to pay the dues they owe us,” observed K. Sadakathulla, vice-president of the association.

Given the circumstances, it is essential that the units are extended collateral-free loans and enhanced working capital limits as promised by the Centre under the stimulus package, said Mr. Hidayathulla.

Along with other officer-bearers of the association, Mr. Hidayathulla presented a memorandum to Collector S. Sivarasu on Tuesday, seeking his intervention for expeditious sanction of credit to the small business units in Puthanatham.

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Printable version | Aug 9, 2020 2:12:56 PM | https://www.thehindu.com/news/cities/Tiruchirapalli/puthanatham-garment-makers-plea-for-collateral-free-loans/article31902785.ece

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