Demonetisation and industrial woes

Note ban shatters Morbi, the ceramic hub of Gujarat

Once a booming ceramic hub, Morbi has been left moribund by demonetisation and the subsequent curbs on cash withdrawals, with its 600-plus factories on the brink of closure. Lakhs of daily wage workers, mostly migrant labourers from other States, have been rendered jobless and many have returned home.

As of now, more than 50 per cent of the factories are shut and more are likely to follow suit by the end of the month with the cash crunch crippling the entire value chain of this ceramic tiles manufacturing cluster which employed more than four lakh daily wage workers from Uttar Pradesh, Bihar, Odisha, Andhra Pradesh and Rajasthan.

“More and more factories are shutting because we have no raw material to run factories as we don’t have cash to pay transporters for bringing in raw materials and dispatch finished products and pay labourers,” said Khimjibhai Kundaria, president of the Morbi Ceramic Tiles Association.

Though lauding Prime Minister Narendra Modi’s intention to curb black money, Mr. Kundaria said the industry ran on cash transactions for payments to transporters and labourers. “Each factory needs Rs. 20-80 lakh per month for payments to labourers and Rs. 1-4 lakh per day for transporters. If we don’t get cash, we cannot survive,” he said.

According to him, the total turnover of the ceramic cluster in Morbi was Rs 24,000 crore in 2015-16. “We have no work for two weeks; so we are about to leave for our village near Lucknow. Many [workers] have already left as factories are shut and there is no money also,” said 46-year-old Ramkishor Yadav, a daily wage worker, who has been working in Morbi for six years.

No bank accounts

According to Mr. Yadav, a majority of migrant labourers employed in tile-making units and other auxiliary industries like paper mills, transport and construction, do not have bank accounts as they cannot furnish a permanent address since most of them live in shelters within the factories.

“I am paid Rs. 300 a day for work in the factory, which is closed for 10 days now. The owner has given two weeks’ wages and asked us to come after a month if the factory reopens. Now we will have to go back to our village in Bihar where there is no work at all,” said Prabhat Yadav, sitting with his colleagues outside a factory. Like Prabhat and Ramkishor, thousands of workers have already left Morbi.

“The association has decided that all workers will be given two weeks or one month salary even if the factories are shut but we cannot sustain beyond that,” Mr. Kundaria said. “Nearly 30,000 labourers must have already left now.”

“Labourers are leaving and unlikely to return till they are assured of work. It is becoming difficult by the day as cash crunch is only worsening,” said Pankaj Patel, a labour contractor who supplies workers to factories. Besides ceramic tiles factories, the Morbi cluster is also home to around 100 small units making wall clocks that employ more than 15,000 women. “The clock-making units are women-driven cottage industries and our annual turnover is around Rs. 300 crore. Since there is no cash, we are badly affected as production has dipped; we have no cash to pay workers,” said Shasank Dangi, president of the Clock Manufacturers Association.

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Printable version | Oct 19, 2021 10:58:29 PM |

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