Textiles Sector Nurturing Social and Economic Inclusion

Zohra Chatterji, Former Secretary, Government of India

Textiles sector is one of the biggest employers and contributes significantly to India's exports.

The Prime Minister’s clarion call to make the Indian textiles the biggest employer in the manufacturing sector and the second largest employer in the country after agriculture is all set to streamline the prospects of social and economic inclusion.

As of now, the textiles sector provides direct employment to more than 45 million Indians, and indirect employment to some 110 million. The new textile policy under consideration of the Ministry of Textiles aims to grow export at 20 per cent over the next decade from the current level of $40 billion to $300 billion by 2024-25 and lead to creation of an additional 35 million jobs by attracting investment of above $120 billion in the sector. The sector is thus envisaged to reach a size of $650 billion by 2024-25 from the present size of above $140 billion.

With China gradually moving out of manufacturing in the textiles sector due to rising wage cost, the target though appears difficult, but is achievable. In the changing circumstances, India will be gaining out of China and Japan’s investment friendly eyes towards India. Hence, this sector will be in lime light in the times to come. India is already preparing for an imminent investment boom with the launch of the Integrated Skill Development Scheme (ISDS) as a full fledged scheme of the Ministry of Textiles with an investment of ` 19 billion to train 1.5 billion textile workers during the 12th Plan.

With the creation of a Ministry for Skill Development, the skilling initiative is poised for further exponential growth, which will give synergy and create large number of employments in the labour intensive manufacturing sector.

What does this mean for inclusion? The implications could be wide ranging given the vast spread of the textile sector, which range from fibre to fashion and encompasses the handloom, handicrafts, powerloom and mill sector as well as sericulture, wool, manmade fibre and jute products. Each kind of fibre has its own vertical chain and stakeholders, related to raw material production, processing, spinning, reeling and winding, weaving, dyeing and processing, value addition and embellishment, garmenting, retailing and export. The design and innovation, cuts across all the sectors, is adding the unique ethnicity and diversity that defines “Brand India”, linked as it is with the cultural identity of regions and people, which get woven beautifully into this fabric of social and economic inclusion.

Clearly the textiles sector is opening up a sea of opportunities across the country and for a people with different skill set and backgrounds. The current skill gap ranges from operative level to supervisory, middle and senior management levels but in the skill pyramid, the demand is at 85 per cent for basic technical skills, which can be acquired with focused short term modular interventions for upto High School level competency. This means there are tremendous employment opportunities available for rural youth with secondary level qualification.

The highest demand is for garmenting in the apparel sector, which requires sewing mechanists, designers, garment technologists familiar with computer aided design, cutters and tailors. Technical skills essential for quality control is include testing, quality management and compliances. Also important is managerial and communication skills for merchandising and supply management. The glamorous world of fashion also beckons the young, brand conscious, new generation and another world of opportunities booms with jobs in textile retailing as the $100 billion textiles industry growing at a CAGR of 12 per cent in 2013-14 and gearing up to further grow to a size of $350 billion by 2025. The sector is thus poised to script an all inclusive growth story.

The need of the hour is to consolidate and scale up skilling initiatives in partnership with the industry, along with a credible mechanism for skill assessment and certification. Given the high demands of skilled workers in the textiles sector and the high attrition rates, the productivity and competitiveness of the sector is thus adversely impacted. The private sector is therefore more than willing to lend a helping hand to the government to expand the training initiative. Initiatives taken up under the Corporate Social Responsibility (CSR) by corporates have proved to be a huge success and are shining examples of inclusive growth.

Further, the government rules for engagement with the private sector need to be simplified to channelise the potential energy and to incentivise training by the private sector – by exempting it from service tax and linking it to setting up productive enterprises such as garmenting units in the rural areas. Enabling training under MGNREGA for a specified period for new units in rural areas would improve the viability of such units and open up employment avenues especially for women, whose numbers are reportedly decreasing under MGNREGA.

In fact, the textiles sector plays a major role in bridging the gender gap. More than one-third of the manufacturing labour force in developing countries overall and upto half in Asian countries are women. In India about 50.4 per cent of the work force in the apparel sector is women. It is also noteworthy that 80 per cent of the weavers out of the 23 lakh of their population in the country are women – and in many of the states in the North East, weaving is the exclusive domain of the women whereas the involvement of women in various sericulture activities is upto 54 per cent.

As the textiles sector grows, it also becomes an important contributor to women empowerment and the social and economic inclusion of women. Across the country there are innumerable stories of women from deprived backgrounds who have become successful entrepreneurs and won respect in society and in their families through weaving, garmenting embroidery and other such skills. They have also motivated other groups of women to achieve social and economic inclusion through highly successful SHGs.

In a predominantly agriculture based country like India, where 30 per cent of the rural population still lives below the poverty line, activities which lead to diversification of farm enterprises and generation of additional income promote social and financial inclusion. In addition to handloom (43 lakh weavers), powerloom (55 lakh weavers) and handicrafts (68 lakh artisans) – sericulture, which provides livelihood opportunities to some 78 lakh Indians, is a success story that has led to sustainable income and inclusion of tribal communities through judicious exploitation of forest based Tussar plantations for rearing Tussar silk worms.

Under the “Catalytic Development Programme (CDP)”, the farmers in general are also getting benefited in sericulture clusters, where they are federated into community based associations with significant participation of women. Chawki rearing centres, Seri polyclinics and Kisan Nurseries are being encouraged through peoples’ participation.

These activities have been identified as people based activities run through federations of farmers, specially women self help groups. The focused approach of the CDP has been not merely of “adding” on women to various processes in the silk value chain but also of reshaping these processes to create space for women’s involvement in shaping and implementing the developmental agenda.

Another initiative of the Textiles Ministry towards inclusion is the pilot scheme for workers’ housing , and for helping women from backward areas to join the productive work force and reduce attrition in the industry. Under this scheme, the workers’ accommodation comprising of dormitories for a minimum of 250 workers and maximum 1000 persons with built up area of 125 sq.ft/capita, including common facilities – kitchen, dining & recreation space etc. will be encouraged.

Ministry of Textiles will provide a grant limited to 50 per cent of the project cost subject to a ceiling of Rs 3 crore per hostel, excluding land cost. Special Purpose Vehicles (SPVs) set up under SITP Scheme and SPVs promoted under other schemes of Ministry of Textiles would be eligible for availing assistance under this scheme.

Another pioneering effort of the Ministry of Textiles is a scheme for setting up training-cum-incubation centres in apparel manufacturing, wherein for every `1 lakh invested in the industry, an average of 7 additional jobs will be created. The scheme has been envisaged to help the first generation· entrepreneurs and startups to overcome the constraints of lack of capital investment for land and buildings etc and fast track the setting up of garment units to capitalise on the current growth potential of the apparel sector.

The main objective of the scheme is to create on integrated workplace and linkages based on an ecosystem for startups that is operationally and financially viable, and increases their success potential and decreases the time and costs required to establish and grow the new businesses. Plug and play factory building with built up area of 15,000 sq.ft. and 100 machines per incubatee will be provided for a period of 3 years alongwith training support of 200 workers per incubatee and assistance for design services and participation in domestic and international fairs. The total assistance per incubatee in addition to provision of plug and play factory building and machines would be Rs 31 lakh.

Even with the high entrepreneural zeal and skilled manpower, one of the biggest challenges facing the sector continues to be ‘finance’, even though the Technology Upgradation Fund Scheme (TUFS) introduced in 1999 has been hugely successful in galvanising investment in the mills. The scheme has led to investment of Rs 2.5 Iakh crores in the sector by providing a subsidy of just Rs 18,000 crores, since its inception. This has led to substantial addition of yarn production, thus improving the overall strength and competitiveness of the textile sector.

Given that 61 per cent of the fabric production of the country is produced in the powerloom sectors, 23 per cent in knitwear and about 11 per cent in the handloom sector, whereas nearly the entire handicraft production is in the small scale sector. Hence, it is imperative to address the financial needs of the small businesses on priority basis to ensure balanced growth of the textile sector and achieve financial inclusion of all sections in the value chain.

Though handloom is already included for the priority sector lending, the banks are not inclined to come up with loaning for borrowers in the unorganised sector. The demand of the Ministry of Textiles has been to identify handlooms as a sub-sector within priority sector lending and to ensure adequate credit flow to the handlooms, powerloom and handicrafts sector – through intensive monitoring by banks and department of financial services. This is especially important as the sector is linked to the cultural identity of our nation and it is upto the government and also the corporate sector to fill the gap earlier extended by royal patronage both for financing and consumption of the exquisite handloom and handicrafts creations.

Microfinance has meanwhile helped to fill the gap to an extent. The efforts of Shrujan Trust in Gujarat to revive and document the emoroidery of Kutch are notable success stories worth emulating by corporates across the country. However, the needs of the sector require serious attention of the formal lenders.

For the overall growth of the textiles sector that will also lead to the social and financial inclusion of a large section of the population, the Ministry of Textiles has introduced a slew of meaures for promotion of weaving, processing and holistic growth of the sector. Apart from the three flagship schemes viz., Technology Upgradation Fund Scheme (TUFS), Scheme for Integrated Textile Parks (SITP) and Integrated Skill Development Scheme (ISDS) with outlays of Rs 12,500 crore, Rs 1,972 and Rs 1,900 crore, respectively in the 12th Plan, a hire – purchase scheme has been included under TUFS on pilot basis to enable small powerloom weavers to upgrade their machinery so as to achieve the goal of “Zero-defect” fabric production. lnsitutional upgradation of powerlooms and a Tex Venture Cpital (TVC) has also been introduces.

An umbrella scheme for promotion and development of textiles in the Northeast with a outlay of Rs 1038 in the 12thPlan is a significant step for inclusion of these far flung areas by enabling the formulation of schemes, having sufficient flexibility to meet with the special requirements of the region. Other new schemes include workers housing, setting up of apparel manufacturing units in SITPs, integrated processing parks, flatted factories, incubation centres and a scheme for promotion of agro textiles in Northeast.

The nomads of the inhospitable Ladakh region who face acute hardship to rear the Pashmina goats, which produce the finest quality of Pashmina wool in the world have not been forgotten in this all inclusive growth initiatives. Presently, under a scheme for Pashmina Wool Development, a single dehairing plant enables value addition by dehairing just 5,000 metric ton of Pashmina wool produced in the region and the balance of the production of 50,000 mt is sold in the raw form to traders mostly from Punjab who process it and export it to Italy and other high fashion locations outside.

A fresh scheme for Pashmina Promotion recently was announced in the interim budget for 2014-15. This would be another dehairing plant with testing facilities and solar powered community sheds those would be helpful to the nomad women in hand-spinning of the wool, through portable mechanised spinning machines. A testing and grading centre will also be established to enable value addition. The entire process of Pashmina production and processing can be of great interest to tourists visiting Zanskar and Pangong Lake (a popular tourist destination after filming of “Three Idiots” movie there). A tourist exposition centre-cum-cafe and souvenir shop based on the Pashmina wool story is therefore on the cards.

Given the tourist fascination for Indian weaves and handicrafts, it is the effort of the Textiles Ministry to promote Textile Tourism in the country under a mandate given by the Prime Minister himself. The Ministries of Textiles, Tourism and Culture put their heads together last July and came up with a blueprint for promotion of Textile Tourism. This would include all citizens and foreign visitors in the textile growth story as it weaves the fabric of social and financial inclusion.

(The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of INCLUSION. Comments are welcome at info@skoch.in)

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