COVID-19 has taken a toll on the largest naturally-dyed handloom fabric manufacturer in the country. On Wednesday, Heggodu-based Charaka, a weavers’ cooperative society that supported about 800 weavers, dyers, and tailors, stopped its activities owing to severe cash crunch.
One of the success stories in the handloom sector, Charaka that markets its handloom products through Desi, a charitable trust, is now saddled with a whopping 87,000 metres of unsold fabric and about ₹16 lakh worth of garments in its stock. Desi, which runs 15 stores in Karnataka, is left with stock of garments worth around ₹1 crore.
Charaka, which celebrated its 25th anniversary last year, has been reporting profits, including during the financial year 2019-20. The society’s monthly capacity is to produce about 30,000 metres of handloom fabric, and operates across seven districts in the State with Heggodu in Shivamogga district as its base.
However, the economy that came to a grinding halt during the pandemic-related shutdown hit the finances hard. Irrespective of the shutdown and slow pace of economic activity during the last four months, the society continued to pay its weavers, dyers, and tailors. Both Charaka and Desi work on the “paid-up stock” model of business where they make payments irrespective of the sale.
“Cash flow is now choked and we have collapsed. Our overdraft facility in the bank is closed. We have no choice. All the weaving and dyeing activities have been stopped while tailoring work is coming to an end. We cannot help them [weavers and dyers] because we are unable to help ourselves,” Charaka founder and social activist Prasanna told The Hindu . On Wednesday, he informed the bank about the decision to shut activities and sought interest waiver to bail out the society.
In the last few years, on an average, Charaka reported an annual turnover of around ₹2 crore while Desi reported a turnover of about ₹5 crore. “If this can happen to a successful, profitable and model handloom society, it is a reflection of what is happening to the handloom industry,” Mr. Prasanna said.
While Charaka has stopped purchase of fabric from weavers/dyers, its employees are now being deployed to take mud works in Heggodu.
Dues from govt.
Mr. Prasanna, who has written to Chief Minister B.S. Yediyurappa about the decision to close Charaka owing to cash crunch, also pointed out that over ₹1 crore that had been sanctioned by various governments over the last 15 years for various projects has not reached the society.
“Except for two Centrally funded projects, funds have not reached us. This is not the story of Charaka alone. Probably all weavers or weavers’ societies have faced the same fate. This is due to the functioning of the Handloom Department that has not been reformed. Officials are not to be blamed,” he said in the letter on Wednesday. He also said that Mr. Yediyurappa had released ₹60 lakh for Pavitra Vastra project. He also warned that if any other weaving societies close, he would sit on a hunger strike.