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Textile firms deny job cuts

By Devika Banerji in New Delhi
May 12, 2009 12:23 IST
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Since September last year, when everyone realised that the global economic meltdown could not be wished away, industry groups have been dishing out data on job losses. Among these is the Confederation of Indian Textile Industry, which said a million jobs had been lost in the last financial year.

However, six textile companies that Business Standard spoke to, including two of India's largest exporters, and a mix of small and medium enterprises, denied any job cuts. Two others declined to comment.

"We have adopted routine cost-cutting procedures and are concentrating on streamlining production. Our company has seen no job losses," said Rajan Hinduja, managing director of Bangalore-based Gokaldas Exports, one of India's largest exporters.

Most textile companies expect the situation to improve by October and have retained their skilled and semi-skilled labourers even though the textile ministry's data show a 30 per cent drop in exports in 2008-09.

Some companies have cut cost by reducing the number of working days or work shifts. However, most of them say their manpower remains unchanged.

"We have had routine removal of a tailor or two but have not drastically fired people," said Praveen Nayyar, managing director of Dimple Creations, an apparel export company.

When asked how CITI estimated its job loss numbers, DK Nair, its secretary general, said the estimate took the unorganised sector into consideration. According to him, this was the sector where the actual job losses had taken place.

"The worst hit are fabrication units that receive 25-30 per cent of their orders from big textile companies. Considering the drop in overall production, people in these small units have been rendered jobless," said Nair. Fabrication units convert yarn into fabric that is later used in garment-making units.

Nair said the job loss numbers used the concept of 'opportunity cost', which meant the number of people who would have been employed in case demand and production had not slackened.

When asked whether CITI undertook a sample survey to estimate job losses in the textile industry, for both organised and unorganised sectors, Nair replied in the negative.

CITI's estimate of a million is based on the 3 per cent drop in production given out in the provisional Index of Industrial Production (IIP). It assumes that a proportional number of jobs have been lost in the industry that used to employ 35 million.

"A field survey is an improbable idea because of the vastness of the sector," Nair added.

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Devika Banerji in New Delhi
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