Surat textile workers write to Naveen Patnaik: Thousands jobless after GST, take up issues with Centre
Surat textile workers write to Naveen Patnaik: Thousands jobless after GST, take up issues with Centre
The letter, sent on Tuesday, mentions that more than 5 lakh people from Odisha work in the powerloom industry, and post-GST 40,000 workers had become jobless.
Textile traders of Surat protest against GST.
Claiming that the Surat textile industry appears not to have stabilised a year after the Goods and Services Tax (GST) was implemented, with at least 40,000 workers jobless, the Federation of Gujarat Weavers Association (FOGWA) and its subsidiary Pandesara Weavers Association has written to Odisha Chief Minister Naveen Patnaik to take up their issues with the finance minister and PMO.
The letter, sent on Tuesday, mentions that more than 5 lakh people from Odisha work in the powerloom industry, and post-GST 40,000 workers had become jobless.
On July 14, the Southern Gujarat Chamber of Commerce and Industry (SGCCI) had organised an open discussion between GST officials in Surat and textile industry members. State Industries Commissioner Mamta Verma, SGST Commissioner P D Vaghela and Additional Commissioner of GST Yogendra Gard were among those present at the meeting, where a report by FOGWA on the impact of GST on textile industry was presented.
According to the report, post-GST over 1 lakh powerloom machines were scrapped and 6,000 powerloom factories shut down, while over 4 lakh powerloom workers had become jobless. The existing powerloom units were operating at 50 per cent capacity. The daily production of grey fabric, which was 4 crore meter pre-GST, had come down to 2.5 crore meter post-GST. The powerloom industry faces problems of costliest yarn even after reduction of GST from 18 per cent to 12 per cent. After GST, import garments in India had increased, it said.
It mentions that the Man-Made Textile Fabric industry of Surat accounts for 60 per cent of total synthetic textile produced in India, with a production of 1,300 crore meter of cloth and annual turnover of Rs 50,000 crore, with over 18 lakh people associated with this industry. The industry is struggling with issues related to GST, it said.
The GST on MMF yarn is 12 per cent while GST on the final product ie fabric is 5 per cent. “This discriminatory policy had adversely impacted three types of neutralities (Fibre neutrality, Scale neutrality and Trade neutrality), which are essential for efficient GST…”, the letter said.
The letter mentions that FOGWA members had made representation to the Ministry of Textiles and Ministry of Finance. The finance ministry had argued that the powerloom industry should undergo vertical integration to absorb accumulated input tax credit.
For vertical integration, high value of investment is necessary, which powerloom industry cannot manage, FOGWA argued. The MMF industry is labour intensive in comparison to vertical integrated composite mills, which do not have much employment. Due to this, the Surat Man Made Fabric is losing its edge, both in domestic and exports markets, and many powerlooms are shutting down, they said. More than 40,000 workers in the industry are already unemployed and numbers are rising, they added.
As per the data from FIST, there are over 5 lakh workers from Odisha (Ganjam and Berhrampur) working in the powerloom industry in Surat. Apart from this over 3 lakh women are engaged in value added work like mirror and stone work and hand embroidery on fabric. The workers from Odisha are mainly from tribal areas.
FOGWA managing committee member Ashish Gujarati said, “The reason for writing to the Odisha CM is that majority of the labour force in the powerloom sector hails from Odisha and their condition is really pathetic. Many of them have become jobless while some of them are partly jobless, as production had gone down to 50 per cent in powerloom factories. The CM should put the issue before the finance ministry and PMO for an amicable solution.”
He added, “We will also put forward a demand to the central government for a special package to factory owners who have scrapped their powerloom machines.”
Claiming that the Surat textile industry appears not to have stabilised a year after the Goods and Services Tax (GST) was implemented, with at least 40,000 workers jobless, the Federation of Gujarat Weavers Association (FOGWA) and its subsidiary Pandesara Weavers Association has written to Odisha Chief Minister Naveen Patnaik to take up their issues with the finance minister and PMO.
The letter, sent on Tuesday, mentions that more than 5 lakh people from Odisha work in the powerloom industry, and post-GST 40,000 workers had become jobless.
On July 14, the Southern Gujarat Chamber of Commerce and Industry (SGCCI) had organised an open discussion between GST officials in Surat and textile industry members. State Industries Commissioner Mamta Verma, SGST Commissioner P D Vaghela and Additional Commissioner of GST Yogendra Gard were among those present at the meeting, where a report by FOGWA on the impact of GST on textile industry was presented.
According to the report, post-GST over 1 lakh powerloom machines were scrapped and 6,000 powerloom factories shut down, while over 4 lakh powerloom workers had become jobless. The existing powerloom units were operating at 50 per cent capacity. The daily production of grey fabric, which was 4 crore meter pre-GST, had come down to 2.5 crore meter post-GST. The powerloom industry faces problems of costliest yarn even after reduction of GST from 18 per cent to 12 per cent. After GST, import garments in India had increased, it said.
It mentions that the Man-Made Textile Fabric industry of Surat accounts for 60 per cent of total synthetic textile produced in India, with a production of 1,300 crore meter of cloth and annual turnover of Rs 50,000 crore, with over 18 lakh people associated with this industry. The industry is struggling with issues related to GST, it said.
The GST on MMF yarn is 12 per cent while GST on the final product ie fabric is 5 per cent. “This discriminatory policy had adversely impacted three types of neutralities (Fibre neutrality, Scale neutrality and Trade neutrality), which are essential for efficient GST…”, the letter said.
The letter mentions that FOGWA members had made representation to the Ministry of Textiles and Ministry of Finance. The finance ministry had argued that the powerloom industry should undergo vertical integration to absorb accumulated input tax credit.
For vertical integration, high value of investment is necessary, which powerloom industry cannot manage, FOGWA argued. The MMF industry is labour intensive in comparison to vertical integrated composite mills, which do not have much employment. Due to this, the Surat Man Made Fabric is losing its edge, both in domestic and exports markets, and many powerlooms are shutting down, they said. More than 40,000 workers in the industry are already unemployed and numbers are rising, they added.
As per the data from FIST, there are over 5 lakh workers from Odisha (Ganjam and Berhrampur) working in the powerloom industry in Surat. Apart from this over 3 lakh women are engaged in value added work like mirror and stone work and hand embroidery on fabric. The workers from Odisha are mainly from tribal areas.
FOGWA managing committee member Ashish Gujarati said, “The reason for writing to the Odisha CM is that majority of the labour force in the powerloom sector hails from Odisha and their condition is really pathetic. Many of them have become jobless while some of them are partly jobless, as production had gone down to 50 per cent in powerloom factories. The CM should put the issue before the finance ministry and PMO for an amicable solution.”
He added, “We will also put forward a demand to the central government for a special package to factory owners who have scrapped their powerloom machines.”
Source : https://indianexpress.com/article/cities/ahmedabad/surat-textile-workers-write-to-naveen-patnaik-thousands-jobless-after-gst-take-up-issues-with-centre-5264102/