Representational Image. Image Courtesy: Reuters
Around 31% of domestic apparel factories might close and about 25 lakh workers could lose jobs as a result of the ongoing nationwide lockdown imposed to slow down the spread of COVID-19 pandemic, according to a survey conducted by the Clothing Manufacturers Association of India (CMAI).
“MSMEs see no future and want to shut operations. Considering that close to 8 million people are employed by the domestic apparel industry, almost 2.5 million workers will be out of jobs,” stated CMAI. As per estimates, around 90% of the apparel domestic industry belongs to the Micro Small and Medium Enterprises (MSME) sector.
The survey found that about 67% or two thirds of the participant employers in the industry would not be able to pay wages for April, though 92% paid salaries for March month. Additionally, the survey indicated that around 50% of firms are on the verge of closing down due to loss of sales during the lockdown.
Many small scale textile industries operate by employing outsourced and contractual workers who are most hit due to the lockdown, said Sunil Dutt, Haryana state secretary, CITU. Speaking to NewsClick, he said, “In Haryana, Panipat has around 22,000 textile industries which employee nearly 3 lakh workers. However, of them, only 40,000 are covered under provident fund and ESI benefits. While 80% of these industries fall under small scale, it is emerging that most of the contract workers and migrant workers have not been paid wages since March 22.”
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CMAI has been urging the government and banks to rescue the apparel industry from the crisis.
Among the demands put forward by CMAI include 50% wage subsidy up to Rs 50,000 per month for five months from March and provident fund contribution for three months for employees with wages up to Rs 15,000. Also, the association has demanded for all banks to offer an interest subvention of 5% on total borrowing, with 25% additional working capital to be made available and extension of moratorium on term loans and working capital loans from three to six months.
Trade unions are demanding the government to immediately bring in policies ensuring wages for workers and financial aid for MSMEs.
The Centre of Indian Trade Unions (CITU) has demanded the government to rescue MSMEs which employ two thirds of the workforce as the sector has been worst hit due to the lockdown. Besides, CITU also demanded the government to ensure wages to all and stop retrenchment of contract, casual, outsourced and other workers and employees among others.
In another study conducted in the last week of March, CMAI had estimated that the apparel industry could lose around Rs 1 trillion due to the lockdown and fall in demand and that the crisis will be over only in the financial year 2021-22.