West Bengal garment industry & the informatization process.

AuthorSen, Ratna


Garment manufacturing is one of the many labor-intensive sectors that have enabled developing countries to break into the global garment market. Today, developing countries produce half of the world's textile exports, especially since the final phase-out of the Multi-fiber Arrangement (MFA) on January 1, 2005(Roy, 2010). But India has only recently emerged as a major exporter of apparel on a global scale although it accounts for very little FDI, the overwhelming bulk being domestically owned and financed. The textile industry in India as a whole accounts for about 14 per cent of industrial production and more than 10 per cent of the country's total exports, reaching in 2011-12 about $31 billion (AEPC India, 2011-12). It is the largest jobs generator after agriculture, employing around 35 million people across various segments. Garment manufacturing by itself (especially hosiery based) is located in Tirupur (Coimbatore district of Tamil Nadu), Karnataka, especially Bangalore, and the National Capital Region, especially Noida, Manesar, Gurgaon, etc. But there are sizeable pockets in West Bengal, Orissa and Andhra Pradesh.

In West Bengal, certain characteristics set it apart from garment manufacturing in other locations. For instance, studies on garment units in South India have found that the majority of garment workers are women (85% in Bangalore) (CIVIDEP); that the industry is focused around exports; that there is a degree of precision in the enumeration of factories. In West Bengal, very few women are involved, except in a handful of companies, the bulk of garments is produced for the domestic market, catering mainly to eastern India, and it is practically impossible to state any numbers for the garment industry, either in terms of production units or in terms of employment. Despite being labor intensive, the cost of labor is minimal in West Bengal, probably because of its informalization. There are some similarities with other regions, for instance in the age of the hosiery industry, in outsourcing, etc. But the differences are more visible.

West Bengal Garment Industry

The garment and hosiery industry in West Bengal is large, estimated to be employing lakhs of men and women and which is at least a century old. It has expanded in recent years in response to the changing consumption patterns, higher purchasing power, move away from traditional clothes (sarees & dhotis), brand consciousness, and especially the demands of the new high earning white collar employees according to Vijay Kariwala, Vice President, West Bengal Garment Manufacturers & Dealers Association (WBGMDA). The association itself is 50 years old, but has only about 500 companies as members, compared to its own conservative estimate of at least 50,000 units producing clothes, accessories etc. The association says that the industry is slowly being brought under the purview of taxation, though the findings of this study would suggest otherwise. Previously sales tax applied only to garment pieces costing less than Rs 200. Now all pieces costing Rs 51 or more are covered under VAT. From 2010 all branded garments were also brought under the purview of excise duty. But then the problem of enforcement will become apparent in this study.

The industry is located mainly in South Bengal, in and around Kolkata and Howrah and the semi-urban and rural clusters around them. The industry is not located along thoroughfares, but is woven into the interstices of the two cities and reaching out into niches in districts bordering the cities. It does not enjoy the advantages of sharing infrastructure, which units in the southern states enjoy. It is both urban and rural, organized and unorganized, new and old. The Industry is like an iceberg--with a small visible, formal or organized portion comprising some of the big names in garments and a few registered units, and a vast submerged unregistered informal portion, which thrives on the outsourcing that marks every unit. Each garment made and sold in the market for people from one year old to above 60, travels many kilometers, from one unit to another via small, individual and large transporters and head loaders and goes through many operations before it is ready for sale. The submerged portion is not necessarily made up of small units. Some in fact were found to be quite large, qualifying for registration and formalization under our laws.

Despite the visible activity (cutting, stitching, ironing, packing) there are no signboards, no names, or any reference to the nature of the work performed. Shutters are kept down, with a single access door. Old, plaster-less buildings, abandoned go-downs, or sheds of erstwhile factories are the favorite haunts of this industry within the city areas. In the suburbs, the industry is housed in ordinary single storey or double storey houses, and the only sounds are the low whirr of sewing machines. Rarely does a manufacturer have all processes performed under one or even adjacent roofs.

The industry itself is divided into two main and almost equal parts--hosiery based items and cloth stitched garments. Hosiery, which is the fabric knitted from yarn, is very old to Bengal, the Hosiery Association having celebrated its centenary about two decades back. The products are mainly inner wear (bulk being for men), tea shirts and kids' wear. The garments manufactured from mill-made woven cloth is relatively recent, especially if they are branded and routed through big retailers and made from cotton, denim, synthetics, silk, etc. The products are mainly men's and ladies' formal and casual wears.

Size of the Industry

It is extremely difficult to even estimate the actual number of units in West Bengal or the numbers employed therein, since the bulk is unregistered. Only some of the larger companies are registered under the Factories Act, and some under the Shops and Establishments Act (S&E Act).But even these employ large numbers of contract workers for cutting and sewing, and decline to give any figures for them or allow investigators to visit their factories. It is clear that the industry is not small, since output had reached Rs 12,000 crores in 2007-08, according to the WBGMDA.

A scrutiny of the registers in the Directorate of Shops & Establishments indicates very little about numbers, since they are not classified according to industry. Of the latest 1600 units registered as establishments in all types of industries between December 2011 and January 2013, only 10 appear to be garment or apparel manufacturers--a percentage of just 0.006. By this estimation percentage, of the total 50,050 registered as establishments so far, there would be only 300 apparel manufacturers. This is nowhere near the actual numbers seen or estimated.

Registration under the Factories Act uses the National Industrial Classification code numbers for Textiles, and the total number of factories registered in West Bengal, in the Textiles group is 409 (List of Factories). After eliminating the closed (10), unspecified (5), jute mill (1), cancelled (5) units, 388 registered factories are left. Of these again 170 are either cotton textile (spinning or weaving mills), powerloom cooperatives, belting, surgical cotton manufacturing, waterproofing, and weaving cooperative organizations. Out of the balance of 218 only 35 registered in the new millennium could be assumed to be garments or allied manufacturing. Out of these, 11 have been specifically named as hosiery manufacturing units (knitting), 78 as dyeing and bleaching, 2 as printing units, 3 as manufacturing labels, 1 making packaging materials, and 2 for washing and laundry. Altogether these constitute the tip of the iceberg. Several of the companies visited by this researcher are not on the list and are therefore not registered. Many of the big names in this industry producing major brands like Moustache, Turtle, Manyavar, Lux are not on the factories registered list, although they have their establishments in a government industrial estate called Paridhan or in other industrial estates. Bombay Dyeing and Rupa& Co. appear to be the only large garment manufacturers registered under the Factories Act. This indicates how large the 'submerged' portion of the industry is. An application to West Bengal Industrial Development Corporation (WBIDC) to seek access to the units within the Paridhan Garment Park at Beliaghata in Kolkata, made on 14th January 2013 did not see any permission till end March 2013.

The WBGMDA estimated about 50,000 units in operation in the state, which if employing at least 10 per unit, gives an employment of 5,00,000 people. This estimate would make the garment industry larger than the jute and engineering industries in West Bengal, combined at their current employment sizes. The Minimum Wages Department of the State government estimated about 1,00,000 employed in hosiery alone, for which it prescribes minimum wages from time to time. However, since hosiery comprises approximately half the total industry, there would be not less than 2,00,000 employed in garments. There are in addition, small and tiny units making or trading in accessories (labels, elastics, buttons, cardboard cartons, decorative accessories, etc). At a minimum wage of Rs 3000, wage income generated per month in the state would be at least Rs 60 crores. There are also many employed in transporting the material from one unit to another.

During the course of this research, it was found that each individual address or building or premise within the urban areas visited, held 20-30 single-room or double-room units, employing between 5 and 15, with not a single unit registered in some locations. Kabra, an entrepreneur in Central Kolkata admitted that, in the Barabazar area (Central Kolkata) every lane has 10 garment units. Certain rural and semi-urban, small town clusters have units in many houses within a small area. Therefore, employment of 5,00,000 may not be far...

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