SOIL Report 2008 - ACCESS Development Services

Chapter VIIBut the wage jobs in unorganised retail are of poor quality. Hired help is underpaid and often under-age.Workers receive no wider benefits and work long hours, often for no extra wages. Stuck in small familybusinesses, the scope for learning and development is limited and workers are often subject to rudenessand abuse by owner-managers.4.2 Textiles and readymadesIndia’s textile industry is among the oldest in the country. One of the first to be developed on a largescalefactory model, it has paradoxically remained one of the country’s most fragmented. The textilemills of Mumbai, Kolkata and Chennai – spinning yarn and manufacturing fabric – have been in declinesince the 1980s when they came under competition from power looms which dispersed weaving intosmall, unorganised units throughout the country. The regulatory framework acted against the mills inmost respects: they were subject to tough labour laws which their power loom competitors ignored andwere engulfed in labour protests at the time of their decline; following the power loom ‘revolution’, theyretained a stronger niche in yarn spinning, assisted by the cheap supply of Indian cotton. But they werenot permitted to export yarn and had heavy obligations to pass yarn to handloom weavers, an artisansector heavily protected by the government, under the Hank Yarn Obligation (HYO) policy (Singh andSapra 2003, 18).The handloomsector has beenheavily protectedby governmentsince1950 HYOby controlson the priceof cotton andhigh duties onsynthetic yarnused in massmanufacture; bythe reservationof weaving asa small-scaleindustry andby an elaboratepolicy oforganisational, procurementand marketingsupportimplementedby the centralgovernment.According to the Directorate General of Handlooms, there are 2.3 million full-time weavers in the country,a little less than half of them independent weavers, with a further 3.4 lakh working under master weaversand 4.5 lakh, members of cooperatives (Sharma 18 October 2007). The handloom sector has beenheavily protected by government since 1950, by HYO (recently decreased from 50 per cent to 40 percent); by controls on the price of cotton and high duties on synthetic yarn used in mass manufacture; bythe reservation of weaving as a small-scale industry (SSI); and by an elaborate policy of organisational 10 ,procurement and marketing support implemented by the central government through such organisationsas the Khadi and Village Industries Corporation (KVIC) 11 and the All India Handloom Board. But noneof this has succeeded in protecting handloom weaving from competition by power looms, while suchprotection may have contributed further to the decline of textile mill competitors.The ready-made garment sector in India is very much a product of its back-end suppliers. The vastmajority of fabric is supplied by relatively small power-loom units using basic technology, and the restfrom dispersed and remote handloom units or textile mills still under strain. Garment makers give outthis fabric to an equally small-scale and unorganised dyeing and printing industry, which has flourishedaround garment, manufacture clusters. The quality, availability and timing of fabric supplied to garmentmakers are unreliable and the range was, until recently, limited to natural yarns because of duties onsynthetics.All this makes for low investment in the garment sector itself, which spends less than a fifth per machineand less than 3 per cent over all on machines, as does its Chinese counterpart (Verma 2002, 22). Productivityalso compares poorly to Asian ‘sunset’ garment industries. For example, a Hong Kong factory produces20 women’s shirts per machine per day, while in India the figure is 10 (Verma 2002, 23). Unlike spinningbut like hand-weaving, garment manufacture is reserved for the small-scale sector and those up scalingmust produce 50 per cent for export. All this makes for “one of the longest and most complex supplychains in the world, with as many as 15 intermediaries between the farmer and the final consumer. Eachcontributes not only to lengthening of lead times, but also adds to costs” (Verma 2002, 20)This disabling business environment as well as Indian consumer preference, have contributed to keepready-made garments out of the basket of goods, which Indians consider essential. During the MFAquota regime (from 1974) and especially since its repeal in 2004, the export garment sector has expanded10i.e. the building of cooperatives among hand-spinners and weavers.11Khadi is hand-spun yarn hand-woven in to cloth.158