Report on

Socio-Economic status of the entrepreneurs and work force

of Textile and Apparel manufacturing Cluster of
Bhiwandi

by

National Institute for Micro, Small and Medium

Enterprises (ni-msme) (An organization of the
Ministry of MSME, Govt. of India)
Yousufguda, Hyderabad-500045
 ACKOWLEDGEMENT

Study of Socio Economic Conditions of the Bhiwandi Powerloom

Entrepreneurs and Workforce has been conducted by the National Institute for
Small, Medium Enterprises, an organization of the Ministry of MSME, Govt. of
India. We have tried to explore the issues concerns for the growth of socio
economic conditions of the Powerloom industry in Bhiwandi both with the
entrepreneurs and the workers through the intensive field study and interaction
with the concerned groups. Major inputs for the study is derived from the
interactions with the major associations of the industry, some of the prominent
company owners, community leaders and small entrepreneurs were the major
source for this study. Co-operation of the individual enterprises, Association
members and allowing our team to interact with the workforce by the factory
owners has given us the opportunity to know the industry in depth.

In this connection, we would like to thank various associations of Bhiwandi

Powerloom Owner Association, Bhiwandi Slik & Art Slik Manufacturers
Association, Bhiwandi Powerloom Weavers Association, Bhiwandi Jobber
Society, Bhiwandi Modern Loom Owners Association and Bhiwandi textile
worker and their executive members who has given full support to inform all the
their members to extend the support for this study.

We also express our sincere thanks to all individual entrepreneurs who co-
operated this study and allowed us to visit the units and to interact with their
workers for the interviews.

Research Team
ni-msme

2
 Page
Chapter
Contents No.

Acknowledgement 3

1. Executive Summary 4

a. Challenges faced by the entrepreneurs of 6

Powerloom Industry
b. Challenges faced by the Workforce of 6
Powerloom Industry:
c. Quick Recommendations 7
2. Study background 8

a. Objectives of the Study 8

b. Scope of the Study 9
3. Study methodology 9

4. Analysis and Interpretation of study 11

a. Product profile of Bhiwandi Cluster 11

b. Interpretation of socio-economic status of 12
enterprises
5. Analysis of Business Operations 27

6. Role of Public and Private Service Providers 29

7. SWOT Analysis 32
8. Review of Schemes 27
9. Critical Bottlenecks for inclusive growth 39
10. Conclusions 40
11. Interpretation of socio-economic status of workforce 42

- Interpretation of study results: 42

- Manor Concerns of Workforce 50
- Critical Bottlenecks for inclusive growth 51
12. Action Plan 52

3
 1. Executive Summary

The textile industry holds significant status in the India. Textile industry
provides one of the most fundamental necessities of the people. It is an
independent industry from the basic requirement of raw material to the
final product, with huge value-addition of every stage of processing with its
contribution of 14% of the total industrial production and it contributes to
nearly 30% of the total exports. This industry has the potential of
generating a large number of employments to opportunities and stands as
second largest employment generator after agriculture. About 35 million
people are already engaged with this sector.

Bhiwandi, known for its powerlooms is situated at about 30 kilometers

away from Mumbai in Maharashtra state. Bhiwandi is a one of the key textile
center of western India. Bhiwandi has approximately 12 lakhs powerlooms,
which is 33% of country’s total powerlooms. Turnover of this segment is
projected to be around Rs. 10,000 Crores annually. With approximately 1.6 lakh
customers this industry is spread across 700 sq. km of area. Bhiwandi
powerlooms support family of about 20 lakh workers, most of them being
migrants from Uttar Pradesh and Bihar. Nearly 20 % of the national production
from the powerloom sector is contributed by this township.

It produces 420 lakh meters per day from seven lakh looms ranging from
grey, printed fabric, dyed fabric, cotton fabric to various mix of cotton,
synthetic, and other fibres. Bhiwandi, which alone contributes nearly 40% of
the national production from power loom sector and supports over 20 lakh
families, is witnessing a fall in production by 20 % purely for want of labour.
Labour is also migrating to other sectors for want of better wages and choose
to work in definite timings unlike powerloom sector. All these factors are
affecting the performance of the entrepreneurs in getting the expected
production failing delivery schedules.
Majority of the powerlooms in Bhiwandi produce grey materials which are
used as shirting and dress material later. Cloth produced in Bhiwandi is mainly

4
consumed by Indian market as it is not up to the mark in the international
market. One reason for this is the technology used. Most of the powerlooms in
Bhiwandi is absolute and older, as manufacturer over here prefers low priced
second hand powerlooms over new looms. Excluding some big players most of
the units run in Bhiwandi are small scale units and could not afford to purchase
or import high priced machinery.

About 80 per cent of the powerloom units in Bhiwandi carry out work
orders for master weavers or merchants, who operate between the unit owners
and the market. With the onset of industrial recession, the margins of the textile
industry narrowed down and by routing business through master weavers, it
further narrowed margins to the entrepreneurs. Industry is also slowly realising
the threat of imports. But, for the industry to stand on its feet, it must be freed
from the clutches of master weavers. There is a dire need for the revival of
schemes suitable to micro, small and medium enterprises.

Socio economic conditions of the workforce involved in the power loom

industry is very poor and they are deprived of many the facilities from the
employer like PF, overtime, bonus, leaves, housing, insurance, etc and also
not aware of any Govt Schemes.

Hence, this study has focused mainly on the Textile and Apparel
manufacturing located at Bhiwandi Municipal Corporation area to know the
present status of the micro enterprises involved in the production of textile and
apparel manufacturing with reference to socio-economic status of the
entrepreneurs and work force. Aim of this study to bring out the role of public
and private business development service providers, critical bottle necks
involved, and inclusive development of minorities in these areas, etc.

5
1.a Challenges faced by the entrepreneurs of
Bhiwandi Powerloom Industry:

As per the interactions with the Associations, owners, service providers

and the actors of backward and forward linkages, following are the major
challenges observed for the well being of entrepreneurs:
1. Obsolete technology of plain looms
2. Volatility of yarn prices every day
3. Yarn market is under the control of few people in other communities
4. Financial weakness of micro entrepreneurs
5. Getting a finance from banks is very a biggest task for a Powerloom
MSME
6. Benefits of TUFS are not being properly utilized by the Bhiwandi
Powerloom sector
7. Absence of support from the public and private service providers
8. Dependency on local markets and master weavers only
9. Non availability of skilled labour and labour shortage to the industry
10.Labour absenteeism of 1-3 days after every weekly pay out.
11.Most of the entrepreneurs covered under this study are not fully aware of
Govt Schemes and its benefits
12.Absence of financial discipline among the powerloom entrepreneurs
13.Banks are not industry friendly for powerloom sector
1.b Challenges faced by the Workforce of
Bhiwandi powerloom Industry:
1. Working on piece rate and not on monthly salary
2. High rate of inflation
3. No proper sanitation for the workers at workplace / living places
4. No proper housing for workers
5. No paid holidays
6. No Provident fund as they are not directly employed on rolls
7. No ESI / Insurance
8. Children are not given proper education
9. Not aware of Government schemes of Insurance,
10.Ignorance of Children education allowance etc

6
1.c Quick Recommendations To Enhance The Wellbeing Of The
Entrepreneurs

1. Educating the entrepreneurs on adopting Technology Upgradation Fund

Scheme (TUFS)

2. Facilitation with banks for the better disbursement of loans under TUFS

3. Making use of Group Workshed Scheme to synergize the resources of micro

enterprises

4. Formation of Raw Material banking for the cost effective inputs

5. Aggregate to small groups, preferably in to Consortium / SHGs; linking them

to the mainstream financial institutions

6. Developing Development Plans for both the workers associations and small
entrepreneur associations with a specific focus of social benefits and financial
benefits

7. Promoting an independent association for the work force and providing

required capacity building through an independent agency with a specific
curriculum

8. Establishing Market Resource Center to educate the entrepreneurs on

markets and providing marketing linkages

9. Counseling to workers on the work ethics and co-operation for the win-win
position of workforce and entrepreneurs

10. Creating awareness on the Govt Schemes to the entrepreneurs for better
utilization of schemes

11.Similar awareness to the workforce on Insurance, Children Education etc

12.Promoting group insurance through the aggregated community based

organizations

13.Skill upgradation of the weavers on latest technology and also to train the
fresher to induct to the industry.

14.Lobbying with the Ministry of Textiles for the revision in schemes which
benefits decentralized MSME

7
1) STUDY BACKGROUND

The idea of the study has emerged keeping in view of the current crisis
that prevails in the Bhiwandi textile cluster. Several of the current generation is
leaving the profession due to various reasons. Being the second largest
supporter of the livelihoods of the millions of populations of India, the
Powerloom entrepreneurs and work force are facing several challenges. If the
situation prevails, the crisis takes away several lives similar to the dry land
agrarian crisis that is prevailing in India. Hence it was decided to undertake a
study which understands various challenges faced by the Powerloom workers in
this region. The study is expected to bring out specific recommendations so as to
improve the situation. The study has been conducted in three clusters of Textile
and Apparel manufacturing located at Solapur, Bhiwandi and Bhiwandi cities
within, Municipal Corporation areas to know the present status of the micro
enterprises involved in the production of textile and apparel manufacturing with
reference to socio-economic status of the entrepreneurs and work force. The
study would also involve bringing out the role of public and private business
development service providers, critical bottle necks involved, and inclusive
development of minorities in these areas etc.

2.a. Objective of the study

1. To undertake study in Textile and Apparel manufacturing cluster

located at Bhiwandi Municipal Corporation areas.

2. To study the present status of the micro enterprises involved in

production of textile and apparel manufacturing.

3. To study the socio-economic status of the entrepreneurs and work

force involved in production of textile and apparel manufacturing.

4. To analyze the backward and forward linkages to understand details of

business operations of the clusters.

8
 5. To analyze the role of public and private business development service
providers.

6. To identify the critical bottle necks that is hindering development of

the clusters particularly from the point of view of inclusive
development.

7. To analyze the strengths, weaknesses, opportunities and challenges of

the clusters.

8. To prepare a cluster specific action plan along with the scheduling of

the activities for development of the clusters based on the problem
analysis.

2.b Scope of the study

To undertake a study of Textile and Apparel manufacturing located at

Bhiwandi Municipal Corporation areas to know the present status of the micro

enterprises involved in the production of textile and apparel manufacturing with

reference to socio-economic status of the entrepreneurs and work force. The

study would also involve bringing out the role of public and private business

development service providers, critical bottle necks involved, and inclusive

development of minorities in these areas.

9
2) STUDY METHODOLOGY

The study has been conducted through the local Cluster Development
Executive who is trained on the UNIDO Cluster Development Methodology. Field
visited to individual units to get full details mentioned in our scope and analyze
the forward and backward linkages of the industry. Also met the individual public
and private service and supporting institutions to analyze their services and role
to suggest strengthen their services to the local industry. Similarly, meeting the
stakeholders of the cluster and getting their feedback on the social economic
status of the industry and the bottlenecks of the industry growth, present level
of support received from the State/ Central Government organizations, pending
issues and grievances pending with the concerned authorities
.

Based on the data and inputs from various meetings, SWOT analysis was
prepared and specific action plan also being suggested based on the gap
analysis done through our study.

SAMPLING

Entrepreneurs sample size 150 Purposive sampling

Work force sample size 150 Random sampling

10
4. ANALYSIS AND INTERPRETATION OF RESULTS:

a Present status of the micro enterprises involved in production of

Textile and Apparel manufacturing

Majority of the powerlooms in Bhiwandi produce grey materials which are

used as shirting and dress material later . Other items produced are dyed
fabrics of Lungies, Sarees and running fabrics of dyed yarns. All these
are these productions are of Powerloom production and there is no activity
of Apparel industry in Bhiwandi. Especially the Bhiwandi Powerloom
products are not given a value addition of converting them into apparels
or any kind of customized garments as they need further pre-processing
and dyeing. Some of the Powerloom produce are given a value addition
of embroidery and stitching ends, these are either outsourced to women
to stitch at their homes. Some units have set up 3-5 machines in-house to
cut and stitch the fabrics or mend the ends. So this activity of is
considered as making of Made-ups and not as apparel manufacturing.

In absence of Apparel sector in Bhiwandi, our main focus of this study is

given on micro enterprises of Powerloom enterprises whose investment is
upto 25 lakhs on plant and machinery

11
 b. Interpretation Of The Enterprises

i. Age & Experience Of The Entrepreneurs

Table 1. AGE OF THE ENTREPRENUERS

Sno Age category Number %

1
20 to 30 years 9 6%

2
31 to 40 years 43 29%

3
41 to 50 years 48 32%

4 Greater than 50
years 50 33%

From the 150 respondents in the cluster, more than 65% of the entrepreneurs
are in the age group of above 40 years and above , this indicates that the
entrepreneurs in Bhiwandi carries a rich experience and operating in the
profession for the several years. There are only 29% of entrepreneurs whose
age group is between 31 to 40 years Looking at the entrepreneurs age between
20 to 30, there are only 6%, which indicates that new age group and youngsters
are not choosing this textile line and new generation is opting for various other
activities.

When compared the age of the

entrepreneurs with the experience in
the profession (table 2), it gives an
interesting observation that there is
only 4% of the entrepreneurs carries an
experience of <5 years and 5-10 years
are only 12%. This is not a good sign
for the growth of the industry. There
are about 84% of them are having
more than 10years and experience in this sector.

12
 ii. Ownership of the Units in the Cluster

Majority of the units in Bhiwandi cluster which the team had studied, the
units are owned by the entrepreneurs. 76% of the units are own units and about
24% of the unit holders are funning their production by hiring the installed
looms. The entrepreneurs who are
running their businesses on hiring Sno Type Number %
the infrastructure is not sound
1 Own unit
enough to establish their own firms 114 76%
and on the other way those have 2 Rented
36 24%
give for hire and who are the Cooperative
ultimate owners are unable to run 3 Society
0 0%
the business due to various
4 Daily wage 0 0%
reasons. Original owners failed to
do the business due to low profit
margins and not able to upgrade
the looms to the contemporary requirements by their clients like sulzer / rapier
automatic looms production.

Very few entrepreneurs have got the access to either the beneficial
schemes for starting up of the textile units or for the working capital
requirements. An in depth probing is further required to see how the capital
requirements are met, what are various debt options, the interest rates, the
existing pressure from the informal lending institutions etc to know more about
the nature of working capital and related vulnerabilities.

iii. Type of Looms

13
 Over all plain looms % is more and all are age old looms and these looms
were purchased from the closed mills of Mumbai as Bhiwandi is in the outskirts
of Mumbai. With some additional attachments of drop box or the jacquards they
are put to use for producing grey
Type of looms in the cluster
fabrics. In our sample selected and S.no Loom type Numbers %
visited, there are about 63% of the 1 Plain Loom 94 63%
looms are only working on grey.
Some of the looms are attached with Plan with Dobby
2 drop box 24 16%
drop box or jacquard is about 28% in
the selected sample. Sometimes,
3 Plain with jacquard 18 12%
these kinds of attachments may cost
them about R.25000 to 50000/- per Shuttle less/Auto
loom depending upon the type of 4 looms 14 9%

modifications they need. 150 100%

There are only 9% i.e., out of 150 entrepreneurs only 14 member having
established the auto looms. In the micro entrepreneurs there are only 72 looms
all together working as of now?

Out of 12 lakhs powerlooms in Bhiwandi there are more than 2000 rapier /
sulzer looms are working and those are all established by the large scale
entrepreneurs with/without the help of TUFS funding. While the micro
entrepreneurs are not a position to reap the full benefits of the Govt. Schemes
due to their financial weakness and not having any accounts track record or
banking transactions.

As a result, all the micro entrepreneurs are deprived of these benefits

while all others are enjoying the benefits of the schemes. First of all, there is no
much awareness about the Govt schemes and those who are aware, they are not
financially capable of taking loan and modernize the technology. During our
interaction with the micro entrepreneurs, they have expressed that instead of
putting our total capital as margin money and taking loan from the bank is not a
viable proposition for them as they will not have working capital in hand and also
it becomes burden till the loan is fully repaid to bank.

14
 iv. Investments.

An analysis of the number of looms per unit versus the extent of

accessibility of the schemes is of paramount importance in the study. Field study
reports shows that there are 11% people
has the investment of <2 lakhs rupees
establishing the looms the in the home
premises and doing the activities of
conversion to the master weavers. So he
will not have the capability of upgrading the
technology which is beyond his capacity.
The next segment is more than 2lakhs and
less than 5 lakhs are about 25% with better
financial position having upto 12 looms and
they also work for the master weavers.
Major segment is about > 5lakhs and less than 10lakhs investment in to looms
and installed upto 36 looms capacity. This segment is somewhat in better
position and producing good quality of fabrics with the same age old machinery.
Only 9% of the units are having investments of more than 10 lakhs and below
25 lakhs. All these 14 units have installed rapier looms and few of them availed
the loan under TUFS.

v. Funding

15
It is evidence from the investment pattern that most of the entrepreneurs are
investing from their own funds to the extent of 80% which include finance from
the relatives and friends. It shows that they want to do the business with their
own money instead of barrowing and paying installments to the banks. Banks
contribution is only 4% which is very less in the present financing pattern. It is
because many banks do not entertain the small Powerloom entrepreneurs to
finance the term loans. Banks look at the past financial records of the applicant
and it should be profit making and having a good financial record and
transactions with the banks. Co-operative societies also play a vital role in this
aspect by extending a term loan to their members and some of the unit holders
sometimes take the finance from even the money lenders.

Though there is a great potential for the banks to help the MSMEs of Powerloom
sector, the scheme guidelines are very rigid on its eligibility norms. Textiles
commission office is also notified the eligible machineries under the TUFS and
only those are eligible to get the loan. Industry demand to consider the old
looms modernization is not yet considered to include in the TUFS.

The following results shows that there are 76% of the units are having looms
between 9 and 18 working and only 19% of units out of 150 are having looms
between 4 and 8. Only 6% of units have 19 to 36 looms installed capacity.

% range of unit with its capacity

16
 vi. Impact of technology up gradation

Technology upgradation has a positive

impact on the industry as per the
discussions and responses of the
respondents. As per the study, there are
about 117 respondents said YES there is a
positive impact and about 33 respondents
said that there is no impact. The second
category of the people is very confident
about their ability to produce the quality
fabrics equivalent to the auto looms and not
further upgradation is required.

But the fact with the first category of people who believes that there is a positive
impact and they are not able to put up the money for the technology
upgradation. Ability of these entrepreneurs in accessing the support from TUFS
has been not enhanced for the past few decades. Though Maharashtra Gov came
up with a good scheme, the local entrepreurs are unable to meet the
requirements of the scheme.

v. Source of Raw Materials:

17
The findings clearly shows that 51% of the entrepreneurs are making purchase
from the local marwadis and about 32% of the powerloom unit holders are
purchasing thru the other community local vendors. This shows that 84% of the
entrepreneurs are depending on local vendors for the raw materials and other
inputs. Only 8% ie. 12 units are working under the co-operative societies and
the raw materials are provided by the society. Only 9 units i.e, 6% of the
sample size are directly purchasing from the mill. Only 5 units ie., 3% of the
study group is making a group purchasing which is an excellent tools for the
collective bargaining and also to have a cost advantage.

Hence, there is a dire need for the raw material banking at Bhiwandi is
very much essential. It can be organized by the group of entrepreneurs
with the Govt funding and manage by their own to cut down the cost of
raw materials. Here, Banks should also support the concept of raw
material banking and Minority Development Corporation of Maharastra
can also play a vital role in formation of raw material banking for the
benefit of community involved in the powerloom weaving and to support
their business with the raw material sourcing at cheaper prices.

vi. Marketing Channels:

18
As seen from the findings that the marketing channels are very weak as about
57% of the sample size selling to the local traders and they are fully dependent
on them for the immediate sale of their production and converting them to
money. In this process, the local traders are exploiting the micro enterprises in
pricing as they need the immediate cash or the counter trade of taking yarn
from the same traders in exchange. This is one of the weaknesses of this cluster
and intermediaries are playing a key role in controlling the markets of yarn and
also the final product pricing. 15 % of the enterprises are fully surviving on
doing job work regularly to certain exporters on a regular basis. So they are
not bothered about the yarn prices as they are concerned with the conversions
cost and labour costing. Only 12% of them are making their own sellig of their
production either through agents at Mumbai, Ichalkaranji, Jaipur or
Ahmedabad. So they are obviously enjoying the price advantage for their direct
selling.

About 9% of the units are involved in producing the required quality of grey
fabrics for exports. These orders are placed by the exporters with certain
requirements and accordingly, these products are made as per specifications.
These units are making a deemed exports as their second sale of the products
will be directly billed to foreign buyer. These 14 manufacturers are not actually
getting the benefits of DEEMED EXPORTS as the units holders are also not aware
of benefits for deemed exports. Out of 150 units covered under this study, only
6% of the units get the job from their clients for conversion.

When we look at various marketing support channels, the cluster is deprived of

various important marketing support mechanisms. Still the entrepreneurs can
reach to the untapped markets like – Mumbai, Ichalkaranji, Surat, Rajasthan
and South markets. Strengthening of these marketing channels enhances their
income levels in turn their net incomes from the businesses. Hence, a separate
marketing strategy needs to be evolved for these units.

Govt can set up the MARKETING INFORMATION CENTER (MIC) and

provide marketing linkages to other textile centers with the support either Central
Government or Stage Government Departments like Ministry of Textiles /Minority
Development Corporaton. This MIC will act as marketing exchange to get the pooled
demand from various centers and distributing the demand to the MSMEs and acting
as a marketing exchange with nominal charges to MIC for survival

19
vii. Access to Government Schemes

Following are the list of different Government schemes for the benefit of the
Powerloom Industry and the copy of the each scheme is given as annexures:

Central Government Schemes:

1. Technology Upgradation Fund Scheme:
a. 5% interest subsidy schemes
b. 15% capital subsidy schemes
c. 20% Margin Money scheme for Powerloom SSI
2. Modified Group Workshed Scheme(MGWS)
3. Revised Group Insurance Scheme for Powerloom workers

Government of Maharashtra Schemes:

(Under the Textile Policy of the Government of Maharashtra, for the
year – 2011 – 2017).

1. Scheme of interest subsidy on long-term loans linked to the centrally

sponsored TUF scheme.

2. 10% Capital Subsidy for modernization of existing Powerloom

unit belonging to Scheduled castes/Tribes and minority communities
Under the Textile Policy- 2011-2017. (besides Central subsidy)

a. Projects of Scheduled Castes / Tribes / Minorities eligible if more

than 80% of the share belongs to the respective categories.

b. Provision of own share capital, Government Share Capital and

Loan in the ratio of 5:45:50 instead of 10:40:50 will be
considered in consultation with the concern Departments.

c. Besides the concessions received from other sources, by such

units 10% capital subsidy of the capital investment [i.e. 10% of
the permissible investment for the purpose of interest subsidy for
projects which are approved in TUFS] on machinery will be
provided for SC/SC/Minorities.

3. 10% capital subsidy to units in Vidarbha, Marathwada and North

Maharashtra.

20
Unfortunately the awareness among micro entrepreneurs about the Government
schemes is very less as they are fully involved in their day to day routine
activities. They feel that getting the benefits under any Government schemes are
not so easy. Hence, they neglect to focus on the schemes though Government
is doing a lot for the welfare of the micro and small entrepreneurs. Hence,
bringing awareness of the schemes is to be undertaken by the concerned
ministry to the gross level of the beneficiaries with the help of banks who are
finally disbursing and recovery authorities.

Two years ago, SASMIRA launched a scheme with SIDBI and Powerloom
Development & Export Promotion Council (PDEXCIL) to assist in modernizing
100 units in Bhiwandi. Twenty-eight units were identified, but only seven were
approved loans. That means only 7% of the units were approved as eligible
units. Either banks are reluctant to give loans to the powerloom units or they
demand a huge collaterals.

Viii .Schemes Availed

From the above tables, it is evidence that about 87% of the entrepreneurs has
not availed any Government schemes which are meant for the benefit of the
Powerloom industry. Though the Bhiwandi is the one of the major Powerloom
production centers, utility of TUFS is to the extent of only 8% by the
entrepreneurs covered under this study, which is very less. In order to
support the small and medium enterprises to have the structured work sheds

21
and also to support the seed money for the investments into upgraded
technology has shown little impact with its utility by 3% for work shed and 2%
to margin money scheme.

Government should take steps to amend the so called TUF

Scheme in such a way that it accommodates the requests of
Decentralized Powerloom sector to add the machinery required for
modernization of old looms. This also should be supported with the
subsidy on the similar lines of TUFS under the Ministry of Textiles.
Banks should also be advised to accommodate the micro
entrepreneurs in extending the required upgradation schemes and
also to extend the working capital loans for the survival and also
revival of the industry.

ix. Role of Associations

Various associations are existing Bhiwandi Powerloom Sector with special

objectives and functioning for the welfare of members and industry as a whole.
Most of the entrepreneurs are the members to one or other association and
some are associated with multi membership with different associations.
Following are the active associations in the Bhiwandi Powerloom Sector:

1- Bhiwandi Powerloom Owner Association

2- Bhiwandi Powerloom Weavers Federation Ltd.
3- Bhiwandi Slik & Art Slik Manufaturers association
4- Bhiwandi Powerloom Weavers Association
5- Bhiwandi Jobber Society
6- Bhiwandi Modern Loom Owner Association
7- Bhiwandi Textile Worker Union

Most of the members are very long relation with their respective associations
and from the findings it shows that more than 70% of the respondents are
having associated with the some or other association from 5-20 years. That
22
means every one is associated with some or other association for various
reasons. About 50% of the members do attend the association meetings
regularly and about 30% once in a while.

Following are the responses from the participants that how the associations are
functioning and its main role. Most of the time of association goes into lobbying
of issues with the Government departments for the benefit of the industry it
occupies about 33% of association time. Next to that 27% of their time goes in
circulating the information on Govt. Policies to its members. Though association
do its duty, most of the members do not give attention to that circulars. Sales
promotion is about 9% and 7% of the respondents informed that they do help
for some trainings and marketing support is negligible. Very less focus on
business development of marketing and providing other services like training
and sales promotion of the member products etc.,

Capacity building of the Associations are very much required as

everyone feels that the associations are framed only for the lobbying and to
sort out the common issue through the on the platform of association.
Associations can also play an active role in promoting the business and to help
the members in marketing the Bhiwandi branding. Lot of other business
development services can be organised for the benefits of the members which
is missing in this cluster.

23
 x. Labour Issues

Availability of skilled labour in the cluster is a good sign for prosperous business
in any cluster. Unfortunately, labour force is decreasing year by year from the
waving profession. Some of the main reasons are: migrating to various other
activities leaving weaving profession.

With a cumulative turnover of Rs 20,000 crore, these townships are today

staring at an employee shortage as high as 50%, as demand picks up and
migrant labourers, who had fled Maharashtra after the Raj Thackeray-led tirade
against those from Uttar Pradesh and Bihar, refuse to return.

About 4 lakh skilled workers have left the state, first due to the
Maharashtra Navnirman Sena attack and then after global economic crisis that
hit textile manufacturing," says Pratap Bogade, secretary of Indian Power Loom
Federation. Earlier, estimated workforce stood at 12 lakh.

Young generation is not seen in the profession as next generation is not

put into this profession. Above all, the main reason is meager wages and no
proper recognisation and rewards from the employers. Even the workers who
are engaged in the profession are also only trained by co-workers right from
assistant level. Slowly over the period of time, with the experience, they become
the senior weavers / jobbers without having any knowledge on the loom / loom
mechanism. From above findings with 150 entrepreneurs samples, it is clear
that the there is a labour shortage in the cluster and about 85% of the
respondents indicated that there is a decrease in labour during the last 5 years.
Whoever is working at present they are under the age of >50 years and their
next generation is not brought to this fields by the weavers. Hence, it is an
alarming situation that associations / Govt. should take it seriously to bring the
new blood to the workforce for the survival of the industry.

There is a need of skill development programmes for the weavers and also fresh
training institutes to give the training on the powerloom weaving and mechanism to
attract the youth to powerloom weaving segment. It can be organised through Central
/ Stage Govt. Schemes or Minority Development Corporation may also adopt this
concept to provide the skilled human resources to strengthen the industry with young
as well as to sustain the existing labour with skills

24
 xi. Industry Challenges

Out of 150 entrepreneurs interviewed, 44% of the respondents expressed that

they are not getting the required labour and also skilled labour and not able to
run the looms in all shifts. Secondly, there is another alarming situation of
21% of the respondents expressed was yarn rate fluctuations which affects the
profitability of the enterprises. They are not able to predict the uptrend and the
same enhanced inputs cost is not expected while they are selling the products
as prices contracts have already been signed / committed. Absolete technology
is the cluster’s weakness and it is the 3rd highest issue for the powerloom sector
which is dominated with the plain looms of more than 50-75 years of vintage.
Many enterprises are not able to adopt because of the financial weakness and
non co-operation from the banks in financing heir units. 11% of the respondents
expressed that finance is another biggest challenge for the small entrepreneurs
in expanding their loom capacities with banking support. Though marketing
stands as 5th highest concern, it requires a highest priority as they are
depending completely on local market. Due to their marketing weakness,
profits are squeezed by the middle persons. There is a good scope for them to
expand the markets to the Ichalkaranji, Jaipur, Ahmedabad, Mumbai and other
textiles centers who source the grey material from Bhiwandi. These are the top
5 issues came up during the study and it needs the attention.

25
 xii. Industry Demands:

Various demands and concerns expressed by the entrepreneurs and the most
wanted demand are to extend the TUFs for the old looms modernization. 38%
of the respondents expressed this concern among the 150 units covered under
this study. The second highest issue is to stabilize the yarn rate fluctuation
which is affecting the profitability of the units and it is rated by 36% of the
respondents. Third top most priority for this cluster acute shortage of labour
and availability of skilled labour. Hence, 16% of the respondents demanded that
Government should establish the labour training center to educate them on skills
and also to train new workers suitable for industry.

Considering the priority for the top 3 issues, marketing was given less
priority while it is most sought after for the entrepreneurs as middlemen are
enjoying more profits than the industry owners who spend their whole time to
make the things. Industry people wants some kind of marketing support from
the Govt.,

Last but not least, entrepreneurs also demanded the subsidized inputs like
yarn, dyes and Chemicals and also on spare parts of the loom components etc.,
to meet the competitiveness from the major industry players.

26
5. ANALYSIS OF BUSINESS OPERATIONS:

a) Business Status

In Bhiwandi, all of micro enterprises were working as sole proprietorship

and everyone started with 4-8 looms at the residence and slowly expanded their
installation to 16 – 48 looms of age old plain looms in the same locations or
nearby in the residential areas. So it is like a cottage industry and house cum
workplaces. So most of them are on ownerships and run as individual entity for
business. The whole community is of weavers or technicians from the mills
sectors which were closed during last 2-3 decades. Slowly they expanded the
business and in recent times some have advanced to more organized status and
converted their enterprises to Pvt. Ltd Companies.

b) Finance

As indicated in the previous chapters of the report that the businesses

were being mostly started with own funds and slowly grown up. No banking
institute had yet recognized the potential of the cluster and hadn’t come up with
any type of scheme for the enterprises to finance the old machinery
modernization or adding additional features. This situation is mainly due lack of
accounting and no banking relations with the banks. CAs to fulfill the
formalities of filing income tax returns on behalf of entrepreneurs with minimum
turnover to evade the taxes. But those who had obtained financing for either
machinery or working capital needs had been enjoying good pay-back history
with banks.

c) Human Resource

Entrepreneurs of Bhiwandi Powerloom sector are very poor in human

resource management as the labour is engaged on piece rate. Upper
Management tasks were performed mostly by the owners of the companies, who
in most cases were not appropriately educated and trained because of limited
vision and local supply. Other hierarchy levels were very limited. Production floor

27
labor was available but, unskilled and irregular and irresponsible for duties.
Availability of labour is the biggest challenge for the cluster and our findings also
shows that there is a gradual decrease in availability of labour to the industry.

d) Raw Material Procurement

Almost all the entrepreneurs are procuring raw materials from the local traders.
The raw material supply is controlled by the Marwari community and the sale
purchased prices are determined by them and it runs in the market. Since the
micro enterprises do not have capacity to purchase bulk in advance, they
procure as and when required. This causes high rate from the local suppliers and
rates are also highly fluctuvative. Most of the entrepreneurs are giving the
materials and procuring the yarn from the same traders. Thus traders are taking
more advantage of setting the purchase prices of the finished product and selling
inputs at high cost.

e) Availability of Inputs

As Bhiwandi is one of the important Powerloom center and also on the

outskirts of Mumbai , spare parts for the plain looms to automatic looms are
available locally. Availability of textile related consumer items like pirns,
shuttles, reeds, healds and other related materials have made available locally.
Many companies have established their offices for the supply of various
Powerloom consumer items in the important centres like Bhiwandi, Malegaon
and also Solapur, Ichalkaranji etc.,

f) Process Houses

Bhiwandi Powerloom sector is producing various dyed products and the

industry is backed with the processing houses established in and around the
Bhiwandi to process the yarn for dyeing as some of the units require dyed yarn
dyed on the cone dyeing machines. Some fabrics are also goes into processing
of bleaching and printing. Bhiwandi has such facility advantage of Mumbai
market.

28
 g). Product Sale.

Enterprises located in this region were selling their products directly to

the local markets and some are having agents. Some are doing job work and
some directly producing for the exporters as per the order requirements. Local
selling and purchasing yarn against the sales from the same party is affecting
the profit ratio to the enterprises. Details of the Bhiwandi marketing channel are
already explained in the previous chapters. Some major firms do participate in
International exhibition for buyer-seller meet but small and medium firms can’t
afford and hence seldom participate in Int’l fairs and exhibition.

h) Social & Regulatory environment

As far as domestic laws of the country were concerned, firms don’t face
much difficulty in complying with them. Workers are engaged on contract for
piece rate are paid weekly for the work done. Hence workers are not on the rolls
of company. Of course, companies are following other regulatory compliances of
the local administration and state government. Very few examples of a firm
being ISO certified could be seen in the cluster and those also engaged in export
or a medium/large unit.

6. Role of Public and Private Service Providers:

a) Role of Public Service Providers:

Though Bhiwandi is one of the important prominent centers of power

looms sector and contributing a lot from this segment, no public service
providers are present in this cluster. Major related public sector service
providers like BITRA / NITRA / SASMIRA service are not giving the required
contributing to Bhiwandi Powerloom industry as they deserve. This is one of
the weakest points of this cluster. Though the trainings and testing’s are their
core areas, industry fails to get their services effectively. There are private
testing laboratories which provide the basic testing services like count of the
yarn, colour fastness, cloth analysis etc.

29
 b) Banks:

Bhiwandi has almost all the branches of all commercial banks and
some private banks. Medium and large textile entrepenuers are having good
close relations with the banks in utilizing the finances and having regular
banking. Micro entrepnruers are shying away from the banking and not able
to utilize the banks for the growth and development.

c) Associations:

There are various associations in Bhiwandi like Bhiwandi Powerloom

Weavers Federation Ltd., Bhiwandi Slik & Art Slik Manufaturers association,
Bhiwandi powerloom weavers association. Bhiwandi jobber society, Bhiwandi
Powerloom Owner Association, Bhiwandi Modern Loom Owner Association,
Bhiwandi Cloth Sales Association and Bhiwandi textile worker union

Our Team has got the opportunity to address one of the meeting
called by Bhiwandi Textile Workers Union to address the various Government
Schemes applicable for workers like insurance, PF, ESI, Children Education
fund etc as per the Govt Schemes and also about the group workshed
schemes etc. It was well appreciated by everyone that they are not aware of
these schemes and they are first time hearing about on Children Education
benefits and insurance schemes. They also advised us to make it in the
record that they should be given skill upgradation training and also to provide
certificate which fetch them the better wages and also as qualified and
technical worker. Also demanded for the provision of housing for the textile
workers who are houseless.

30
 d) Yarn Suppliers:

Bhiwandi being as good as local of Mumbai, almost all the varieties of

yarns and counts are available locally for the entrpernuers without out being
dependent on outside supplies. Availability of quality raw materials locall is
strength of the cluster for inclusive growth.

e) Machinery Part Suppliers

Almost all the machinery manufactures are having their head office or
branch offices in Mumbai and every part is available locally. Even the automatic
looks like rapier or sulzer or any kind of Chinese looms spare parts are available
in Bhiwandi.

f) Chartered Accountants

Financial services are very much required for the industry and especially
role of Chartered Accountants play a vital role as facilitators to file the returns
and also to make proposals for the bank financing etc., these services are very
much available in this cluster and well utilized by the MSMEs.

g) Marketing

Since Bhiwandi being one of the important powerloom centers in India,

it has its own branding and standard varieties of plain and grey fabrics, textile
industry depends on Bhiwandi production for the domestic as well as for export
purpose after giving value addition.

h) Business Development Service providers

Business Development Service Providers play a vital role for the

business to grow if their services are effectively utilised by the MSMEs of any
cluster. All the services available to the cluster and unfortunate thing is no
such BDS services are available by Micro entrepreneurs as they try to solve
themselves.

31
 7. SWOT of Powerloom Entrepreneurs at Bhiwandi:

Strengths Weakness

 Traditional business background

 Shortage of labour
 Good Technical knowledge
 Still running on low technology
 Quality with old plain looms
 More labour dependent
 Capability to produce multi
 Dependent on local markets
products
 Not able to encash the Govt
 Marketing capabilities on their
Schemes
own
 No proper accounting of business
 Unique creation of designing and
 No direct raw material purchases
excellent colour combinations
 Banking sector is not supportive
 State Government own Textile
 Not able to expand their capacities
Policy with lot of perks for
 Lack of Marketing knowledge
Powerloom and SC/ST/Minorities

Opportunities Threats

 Use of TUFS for new looms  Competition from Mill sector

 Skill up gradation to labour on  Tough competition from china
high end technology products
 Exploring direct export markets  High fluctuation of yarn rates
 Becoming suppliers to exporters  Pollution control may also ban the
 Formation of co-operatives to get dyeing in the individual local units
the full support of new textile  Shortage of power to the local
policy 2011-2017 industry
 Make use of private business  Hike in power tariff may hit the
development service providers for profits
competitiveness  Allowing exports of cotton may
 Establishing raw material banking inflate the cotton yarn prices and
for collective bargaining and low adversely affect the cotton yarn
cost/unit prices to the Bhiwandi industry
 Formation of consortium for
marketing

32
8. Review of Schemes for Decentralized Powerloom Sector

i).Technology Upgradation Fund Scheme:

The Technology Upgradation Fund Scheme (TUFS) was launched on 01.04.1999

for 5 years. It was subsequently extended up to 31.3.2007. The Scheme has
been restructured w.e.f. 28.4.2011 and approved upto 31.03.2012.
Restructured TUFS has been approved with the enhanced 11th Plan
allocation under TUFS from Rs. 8000 crore to Rs. 15404 crore. Following are
the different schemes under TUFS

A) 5% Interest subsidy Scheme under Technology Upgradation Fund

Scheme for any textile unit including powerloom unit.

B) 15% Credit Linked Capital Subsidy under TUFS for any textile unit
including Power Loom unit in the SSI sector.

C) Margin Money Scheme @ 20% TUFS for exclusive small scale

powerloom units

ii). Powerloom unit can opt either of the above Schemes and the details are as
follows:

(i) The Scheme mainly provides for reimbursement of 5% (4%

in respect new standalone/replacement/modernization of spinning
machinery) interest charged by the financial institutions/banks for
technology upgradation projects.

(ii) In addition, the Scheme provides coverage of exchange rate fluctuation not
exceeding 5% (4% in respect of spinning machinery) points per annum in
respect of foreign currency loans instead of 5% interest support

(iii) The Scheme provides an additional option to the powerlooms units to

avail of 20% Margin Money subsidy in lieu of 5% interest
reimbursement on investment in TUF compatible specified machinery
subject to a capital ceiling of Rs. 500 lakh and ceiling on subsidy Rs.60
lakh.

(iv) The Scheme provides 15% Margin Money subsidy for SSI textile and jute
sector in lieu of 5% interest reimbursement on investment in TUF
compatible specified machinery subject to a capital ceiling of Rs. 500 lakh
and ceiling on subsidy Rs.45 lakh.

33
 (v) The Scheme provides 5% interest reimbursement plus 10% capital
subsidy for specified processing machinery excluding CETP, garmenting
machinery and machinery required in manufacture of technical textiles.

(vi) The Scheme provides 25% capital subsidy on purchase of the new
machinery and equipments for the pre-loom & post-loom operations,
handlooms/up-gradation of handlooms and testing & Quality Control
equipments, for handloom production units.

(vii) The Scheme provides Interest subsidy/capital subsidy/Margin Money

subsidy only on the basic value of the machineries.\

(viii) The Scheme provides 5% Interest subsidy or 25% capital subsidy on

benchmarked machinery at par with handloom sector.

Budget Allocation and year wise release of funds towards reimbursement of

interest/ capital subsidy under the TUFS is as follows:-

Financial Budget Amount released to Nodal Amount O/o Total amount

Year Provision Agencies released TXC released
IDBI SIDBI IFCI to (20%
additional Capital
nodal Subsidy)
agencies
1999-00 1.00 0.75 0.23 0.02 1.00
2000-01 70.00 67.84 2.096 0.064 70.00
2001-02 200.00 168.08 30.674 0.14 198.89
2002-03 220.00 172.00 30.00 0.59 202.59
2003-04 250.00 199.00 48.00 1.97 0.09 249.06
2004-05 284.00 220.83 54.244 2.53 6.00 283.61
2005-06 485.00 244.34 67.3 1.86 151.5 20.00 485.00
2006-07 835.00 214.29 62.65 7.98 479.14 59.86 823.92
2007-08 1143.37 274.28 108.63 0 715.40 45.06 1143.37
2008-09 2632.00 635.02 829.01 0 1127.97 32.48 2632.00
2009-10 2890.00 391.13 62.52 2.95 2383.40 46.00 2886.03
2010-11 2786.68 186.38 70.96 0.89 2500.78 25.17 2784.18
2011-12 2980.00 239.71 14.90 0 2208.00 25.69 2488.30
Total 14777.05 3013.65 1381.214 18.994 9566.19 260.35 14247.95
Segment-wise progress of Restructured TUFS as on 29.6.2012 (IN Cr)

Category No. of Project Sanctioned Loan CAP Subsidy CAP Subsidy claimed
Applic Cost Loan under for for All for
ation amount TUFS Project Subsidy No. of Amount
Cost Amount Applicat
ions
Spinning 216 7933.22 4326.27 3980.55 12194 820.94 210 115 15.40
Weaving 515 1475.64 1067.02 1032.36 6097 280.46 225 190 18.74
Processing 221 1051.61 685.56 651.31 9849 183.02 424 87 13.76
Garmenting 241 406.90 273.29 243.01 3752 63.62 200 97 8.72
Others 1332 16266.93 9232.52 8388.86 15008 2237.56 799 727 79.13
Total 2525 27134.30 15584.66 14296.09 46900 2585.60 1858 1216 135.75
34
It may be seen from the segment wise table of claims under TUFS,
though there was a provision for 280 cr earmarked for the Powerloom
sector, only 18.74 crs were utilized during 2012-12, that too, may be
share of major industrial clusters. Bhiwandi powerloom industry could
not take the full advantage of the TUFS mainly on the following criteria :

A] Plain looms are not eligible under TUFS. Only TUF compatible machinery as
identified / notified in TUF Guide Book by Government of India.

Bhiwandi powerloom industry is highly decentralized and mainly running the

plain looms. The investment ranges from 5 lakhs to 25 lakhs to establish 4
looms to 24 / 32 looms as per the make of the looms. Many entrepreneurs
have established old plain looms by purchasing from the closed Mumbai
Mills/NTC/Bhiwandi composite textile units. The have added jacquard to the
looms to produce designed towels and bed sheets. Also added the drop box
mechanism to produce check fabrics. With the simple plain looms industry
is producing excellent designs, quality products and quantities.

Though establishing an auto looms will enhance their production and profits,
small entrepreneurs are not able to invest huge capital for the automatic
looms. Investment for the Auto/Shuttle less looms comes to 8 to 15 lakhs
depending upon the features and origin of the make. China looms are
available right from 4 lakhs. To start a small unit, they need to set up with
minimum 4 looms for viability. It costs about 16 lakhs and need working
capital. Similarly to establish 4 plain looms it may cost them ONE LAKH
investment. Hence, small entrepreneurs of Bhiwandi are not able to avail
the benefits of TUFS.

B] Taking a term loan from a Schedule Bank identified by the Nodal Agency is
mandatory for availing any incentives under TUFS.
Present Scenario: Most of the small and medium enterprises of the
powerloom industry transactions are on cash basis and nor proper accounts
are maintained and banking transactions are nominal. Only just to file the

35
 returns, entrepreneurs approach to CA and they file the income tax returns
for the nominal amount. In this kind of practice, most of the units does not
have the proper accounting and banking relations. Hence, Banks are not
favouring to extend the loan to powerloom units in absence of their
profitable track record.

But, under the scheme, TUFS are getting eligibility only if the unit is getting
eligibility from the banks. This is one of the drawbacks for the Powerloom
entrepreneurs to avail the benefits of this scheme as they not able to
submit the bankable proposals under this scheme.

C] A minimum 15% of contribution from the entrepreneur is expected.

Some of the entrepreneurs who wish to avail the TUFS has to invest upfront
15% of the project cost. For micro and small entrepreneurs this 15% for
the minimum set up of 4 looms would cost about Rs. 4.8lakhs. (ie.15% of
32 lakhs each looms costing Rs.8 lakhs). If the entrepreneur is having
about 4.8 lakhs investment, they can establish 16 ordinary plain looms unit
with any financing.

With this concept, MSMEs of Bhiwandi Powerloom Industry has neglected

scheme and they do not want to have the burden of bank loan.

D]. Only approved list of machinery is eligible under the TUFS Scheme.

iii). Modified Group Workshed Scheme(MGWS)

With a view to improve the working environment and enable powerloom

workers to obtain higher productivity, the Central Government has approved a
Group Workshed Scheme, to provide subsidy for construction of worksheds,
limited to 40% of the unit cost of construction subject to a maximum of
Rs.120/- per. sq. ft. In order to improve other infrastructure facilities the
scheme envisages a link with the Textile Centre Infrastructure
Development Scheme (TCIDS), which provides central assistance for
improving critical infrastructure in existing or emerging textile centers.

36
 Silent Features for review are:

1] A group of minimum 4 powerloom weavers constituting an Executive agency for

implementing Group Workshed Scheme is eligible to avail the benefits.

Real Scenario:
Powerloom weavers do not have the capacity to go for construction of new
shed while they are not having funding to set up their looms in their living
places itself.

2] Under the said scheme, 40% of the unit cost of construction subject to maximum
of Rs.120/- per sq ft. will be given by the Government as subsidy for construction
of Worksheds.

Though the subsidy is increased from 25% to 40%, still workers are not
able to come forward as they are not financially strong to invest on
infrastructure.

3] The maximum subsidy per beneficiary is restricted to Rs.12 lakh. Each group has
to install minimum 24 Nos. wider width looms or 48 Nos. shuttleless / automatic
looms. The unit should function for a minimum lock-in period of three years

The looms prescribed under these are again need to be compled with the
list of approved looms under TUFS . They can’t install any plain looms of old
ones. Investment for infrastructure and looms are a big burden for
weavers community. Banks are also not supporting them for various
reasons mentioned earlier.

Under the light of above facts, MSMEs are not able to encash the full
benefits of the schemes.

iii). Revised Group Insurance Scheme for Powerloom workers

A Group Insurance Scheme for Powerloom Weavers has been introduced in

association with the Life Insurance Corporation of India since July 2003.
This Scheme has two components-- Janashri Bima Yojana & Add on GIS for
Death. Under Janashri Bima Yojana powerloom workers aged between 18
to 59 years and below the poverty line (BPL) or marginally higher than the
BPL are eligible for an insurance coverage of Rs. 50,000 on accidental death
/ permanent disability; Rs. 25,000 on permanent partial disability; or Rs.
20,000 on natural death / partial disability.

The total annual premium per beneficiary is Rs.330/-, which is shared by

37
 Government of India apart from Social Security Fund of the Government of
India as under :-

 GOI contribution - Rs.150/-

 Weaver’s contribution - Rs. 80/-
 Contribution from social security fund - Rs.100/-
 Total premium - Rs.330/-

Benefits:

1. During the working age of 18 – 59 years, in the event of natural death of

a member, a sum assured of Rs.60,000/- will become payable to the
nominee.

2. On death or permanent disability due to accident a sum of Rs.1,50,000/-

and partial disability due to accident, a sum of Rs.75,000/- will be paid to
the nominee.

3. The scheme is operational on yearly basis and premium paid will cover for
one year.

4. Additional benefits like educational grant of Rs.600/- per child per half
year for two children of weaver’s family, who are studying in class IX to
XIIth Std. for maximum period of 4 years under Shiksha Sahayog Yojana.

Real Scenario:

Weavers are not aware of the existence of this scheme for the own benefit
and also for the benefit of their children education. This is an excellent
scheme and need to disseminate the benefits among workers to make
them aware of the benefits.

This Group Insurance Scheme for powerloom workers and small

powerloom weavers those having 4 looms are eligible

38
9. Critical bottleneck that are hindering development of the clusters
particularly from the point of view of inclusive development.

Based on the personal interactions with the association members, stakeholders

and the individual entrepreneurs of Bhiwandi, following are the major findings
of the study.

 Lack of skilled workforce and availability of skilled labour is another major

concern of this cluster

 Lack of knowledge in marketing and management skills

 Obsolete Technology is the major bottleneck for the growth of Bhiwandi

powerlom sector.

 Dependency of owners only on the textile industry only.

 Traditional products like no product diversification to meet the

contemporary requirements

 No marketing information and support for marketing

 Lack of accountability at all levels and also lack of through monitoring and
reporting system.

 No product diversification and major focus on Grey fabrics

 Low wage workers, especially with no or little training old machinery which
requires heavy breakdown maintenance extending environment costs.

 Lack of knowledge on new production techniques and technology to

improve the production and profitability of individual entrepreneurs.

 Ignorance of excellent Central Govt schemes for the inclusive growth of

Powerloom industry for the micro enterprises.

 Non utilization of State Government support provided under Textiles Policy

2011-2017 for the benefit of all sectors of textiles and including all the
segments of caste wise incentives of 10% additional subsidy.

39
10. Conclusion

On the basis of the above finding obtained in the study it is concluded that,

1) Bhiwandi Powerloom sector is filled with more than 90% older plain looms
and contributing to 55% of the grey cloth production by the micro
enterprises. They are not able to go for fresh investment on capital goods
and advanced technology due to their financial soundness and most of them
do not want to opt for loan as they need to pay installments irrespective of
their returns.

2) Most of the entrepreneurs to the extent of 65%, have invested their own
funds with out being dependent on loans. Banks contribution is to the tune of
only 10% for the modern units. Hence, banks should also be flexible in
extending its loans to MSMEs with some flexible norms. MSMEs biggest
problem of that they are not good at book keeping and banking relations.
Hence, they are not able to meet the requirement of bank norms in submitting
3 years profit and other requirements. Only 11% of the respondents have
availed the benefits of TUFS out of 150 members.

3) Many unit owners don’t know about various government policies, schemes of
subsidies, seed capital formation etc. and policies regarding development of
textile industry. It was observed that efforts are not being made by unit
owners for obtaining such information. From the point of view of unit owners,
it is very difficult and time consuming procedure of obtaining subsidy for
technology up gradation, due this reason also there is no any response from
the unit owners.

4) Because of low rate of investments in micro enterprises (upto Rs. 25 lakh)

majority of the textile product are in low cost, low value added segment, which
will never generate enough economic surplus for continuous investment in
technology, practices and research.

5) Because of using low cost and inferior quality of machinery and equipment in
production process, the productivity is less, which is resulted in high cost of
production and less profit margins

6) About 72% of the local entrepnuers purchase raw materials from the local
traders and 57.33% of their products sell to the local traders. Due to cut
throat competition, raw material deficit, marketing problems unit owners are
not getting the right margins.

7) In the entire supply chain, marketing plays a significant role and the same is
under the control of local trader and have monopoly in price fixing. There is no

40
 scope found that there is no any collective efforts by unit owners for
controlling the malpractices such as hoarding of yarn by some trader.
Because of hoarding yarn there is no any control over the price of yarn and
therefore unit owners are always facing the problem of price fluctuation.

8) Majority of unit owners have no direct contact with their end users to know
their needs, like and dislikes. They do not have any knowledge about the
needs, like and dislikes of the consumers. Establishing Marketing information
to these micro entrepreneurs and linking them with markets by some agency
would improve their reach in markets.

9) About 78% of the entrepreneurs expressed that the availability of skilled

labour is one of the major concern of the industry. As per the data, 83% of the
respondents confirmed that there is a decrease of labour during the last 5
years.

10) Skill Development programme of weaving, designing, loom mechanism etc

to the workers at BTRA with the support of Government Funding and linking
them to industry. This would enhance the skills and also earnings to the
workers as well as quality production and output to the entrepreneurs.

11) Establishing National Powerloom Development Corporation who takes care

of yarn supply to the decentralized Powerloom industry on the similar lines of
National Handloom Development Coorporation, (NHDC) supplies raw materials
like yarn, Dyes & Chemicals

12) In order to remain competitive the global market and to withstand

increasing competition in domestic market it is necessary to ensure the
large investment in modernization and expansion. This will be possible only
if the Technology up gradation fund scheme (TUFS) is properly utilized.

13) Maharastra State Govt is also providing a specifiable package of additional

10% subsidy to SC/ST and Minorities over and above TUFS is an encouraging
MSMEs in Powerloom sector.

41
11. Interpretation of socio-economic status of Workforce

i. Gender:
Gender wise work forces

Sno Sex Numbers %

1 Male 126 84%

2 Female 24 16%

Interesting factor of Bhiwandi work force are dominated by male with 84

% and female contribution of only 16 % to the Powerloom sector. Total
workforce is representing from only one religion of Muslim as the Bhiwandi is
dominated with the Muslim community. No other communities are found from
the units covered under this survey.

ii. Education

Education level of the workforce is very low. Out of 150 workforce

interviewed, 59% of them are illiterate without having any formal education and
never saw the school. There are about 30% of them respondents have studied
upto 9th standard. Only 5% have passed SSC and only 3% of them are having
formal technical education of ITI and working as jobbers and takes care of
mechanical fitter activities. 2% of the graduates also working as jobbers in
factories

42
 iii. Nature of Jobs:

Bhiwandi Powerloom workforce is performing various functions in the sector.

Majority of them 37% are involved directly in weaving activities, 21% in
preparatory works, 16% as helpers, 13% as masters contributes direct to
weaving. About 14% (Others + mechanics ) contributes to maintainance of
looms and allied activities. .

From the above results it shows that 37% of the worker force is contributing to
the weaving. As per the interactions with the entrepreneurs and also the
personal interactions with the workforce, it was clear that none of them had a
formal training for the weaving and they just learned the activity from the helper
level and some of them became the jobbers with the experience of more than
two to decades. Hence, there is a dire need of the formal training for these
workers to enhance their technical skills and also to provide the quality skilled
labour to the industry. None of this workforce is fit for the modernized looms as
it requires skilled labour to operate the high technology looms.

If these workers are given a formal training on the shuttleless looms /

modern looms, they can be easily absorbed by the entrepreneurs to provide the
employment on the modern looms. Bhiwandi has Bombay Textile Research
Association (BTRA) Service Center who gives the training in weaving on modern
looms, loom mechanism, designing etc. which are very much required for
weavers.

43
 If the workers are trained with some Govt. funding / Any agency funding,
they can be given immediate employment by many firms and also with higher
wages because of his skill up gradation with qualification.

iv. Housing

About 94% of the workforce covered

under this study is living in rented houses
and 1/4th of their income goes toward their
house rents. This is one of the major
issues expressed by the respondents on
housing aspects. Only 6% of them have
built their shelter at on their own with
most difficulty in the un authorized
locations. Employers do not have any
provisions or do not provide any housing
facilities to the workers. Hence the
workforce has to find their own way to live and work.

When we deeply study their

living standards and what type of
housing they live, 75% of them
are living in the semi finished
houses and 6% are still living in
huts and only 19% are living in
finished houses. Though there is
a provision of workshed cum
house under the Central
Government scheme, none of
this workforce has availed this
facility as they remained as
workers and not able to become
entrepreneurs. The roads

44
 v. Water Facilities

For comfortable living, availability

Water facility
of water is one of the major
S.no Type of water source Numbers %
amenities. Fortunately there is
no dearth of water for the 1
Common tap 121 81%
Bhiwandi workforce, but they 2
Hand pump/well/bore well 24 16%
have to fetch the water from 3 tank/pond
00 00%
various sources. About 81% of
4 Tap in house
5 3%
the workers get the water from
common tap and 16% fetch their 150 100%

water from handpump/ well/ bore well. Only 5% of the workforce gets the water
to their house through tap in house who has their own houses. As usual there is
a shortage of water for every summer and they have to struggle a lot to get the
required water. Ofcourse this is a general problem now-a-days with everywhere.

vi. Cooking Fuel

After water, cooking fuel is also one of the major amenities. From the
following data it is evident that only 12% of the respondents has the LPG
facilities for the cooking fuel and most of them about 69% of them are using the
kerosene which is purchased from the open market. Rest of them 19% of them
are still dependent on the firewood for the cooking and some are combination of
kerosene and fuel.

45
 vii. Toilet Facilities

When looked at the overall scenario of the worker families, there is a poor
access to health and hygine in their
habitations, living in vulnerable TABLE 33: Toilet facilities
Type of toilet
conditions. There is a dire need for S.npo used Numbers %
the improvement of their sanitation 1 Private in house 48 32%
and living conditions. Even today 2 Open fields 6 4%
people are not having proper 3 Common shared 96 64%
150 100%
common amenities. About 64% of
the respondents still share the common toilets and4% use open fields. Only
32% of the households has the in-house toilets. So there is a dire need for the
improvement of sanitation facilities.

viii. Income Earners per family

Coming to the point of

income earners per family,
there are 42% of the
respondents who support the
family with only one family
member earning. In this
present scenario, it is very
difficult to survive the family
and we can imagine the
economic status of that
family. 32% of them are
earning 2 members per
family and 9% are 3 members & 4 member per family. Whose family size is
more than 10 are earning 4 to 5 members per family. This workforce is totally
dependent only on this profession while next generation is not brining them to
this weaving profession. Hence, this is posing a serious threat of labour shortage
in future and loosing skills after the present generation.

46
 There is a need to retain and upgrade the skills of the present workforce
to improve their earnings. Also bringing next generation of weavers to the
industry by providing proper training to youth and organizing the employment
linkages with the industry. This can be possible through the skill upgradation
programmes being organised by the Ministry of MSME, Ministry of Textiles etc.
Other Departments like Minority Developments of State Govts can also play a
vital role in providing a new employment generation to youth.

ix. Income Earnings per worker

Above data clearly depict that 25% of the workforce are earning upto Rs.3000/-
per month which is below average earning of Indian labour now a days. This
one of the reason why the labour is migrating to various other activities which
fetches more wages with scheduled timings. Where as in Powerloom sector,
whatever they weave/ work, they get the wages as per their output. About 17%
of the respondents get the wages of Rs.3000-5000/- per month and 33% are
earning between Rs.5000 to Rs.7000/- and only 25% of them are earning
above 7500/- per month

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 x. Awareness on Safety and Welfare

Though the Government of India has

introduced various welfare schemes
for the benefit of workers, the
respondents covered under this
study is not aware of the schemes
like group insurance scheme,
educational grant for the workers
children covered under insurance
scheme.

Following are some of the features of the schemes and findings from the study
are as follows:

Only 2% of the respondents are covered

under the insurance scheme while
powerloom workers aged between 18 to 59
years and below the poverty line (BPL) or
marginally higher than the BPL are eligible
for an insurance coverage of Rs. 50,000 on
accidental death / permanent disability; Rs.
25,000 on permanent partial disability; or
Rs. 20,000 on natural death / partial
disability. Additional benefits like
educational grant of Rs.600/- per child per
half year for two children of weaver’s family, who are studying in class IX to
XIIth Std. for maximum period of 4 years under Shiksha Sahayog Yojana.

It is imperative that either the entrepreneurs or the workers are conscious of

various social protection programmes or schemes. Hence it is important to
create awareness among the work force particularly the women members of the
families on the both the workers as well as the child welfare schemes.

48
With a view to improve the working environment and enable powerloom
workers to obtain higher productivity, the Central Government has approved a
Group Workshed Scheme, to provide subsidy for construction of worksheds,

xi. Knowledge of Govt. of schemes:

Various schemes are being framed by both Central and Stage Government
and there is no dissemination of the schemes to the ground level workers.
Concerned Govt officials / local associations should take the responsibility to
conduct the awareness seminars to give the benefit to the concerned. As a
result many of the respondents in the study revealed that they are not aware of
the schemes. Even if they are aware, those schemes are far from their reach.
Findings of the study are evidence for this.

49
 xii. Major Concerns of workforce:

The above work force in the Bhiwandi cluster expressed the major
concern is poor sanitation both at living places as well as at the work places
particularly for ladies. Second highest concern is of not getting the benefits of
any Government schemes. This is mainly due to the lack of awareness. The
second major concern is the meager wages which is because of piece rate wages
and not able to lead the comfortable life despite their hard work. Obviously the
meager wages reflects to their living conditions and can’t provide the education
to their children. Adding to this, due to their living in slum areas, there is a
problem of poor sanitation.

Hence a special attention to be given to the above issues on immediate

priorities. Strategies needs to be worked out, required measures to be taken
immediately by the concerned authorities. Local community organizations need
to be promoted to handle the major sanitation issues.

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 xiii. Critical Bottlenecks for the inclusive growth of
workforce:

 Working on meager wages as 25% of the workforce is earning upto

Rs.3000/- per month only

 More than 94% of the workforce lives in rented houses and 1/4th of their
income goes towards housing.

 No skill upgradation through employers workers can’t go for trainings on

their own.

 Only 2% of the sample are aware of any Government schemes as no one

educates the workers on applicable schemes to workers.

 No benefits of paid holidays / bonus as they are on piece rate wages

 About 59% of the workforce are illiterate

 Not able to give the proper education to children

 Poor living conditions prevails among all the workers in the cluster

 Sanitation conditions are very bad, majority of the respondents of the

study reports that the sanitation is one of the top most priorities for
enhancing their living conditions
 Access to potable water is another important issue.

 No proper facilities for the children at work place

 Most of the workers are alcoholic addicts and they take off on the next
day of their weekly pay outs.

 No provident fund facility

 No ESI facility for any health issues

 No crèche / school / Hospital benefits from the employers side

 No unity / association of workers

Under the light of the above facts, the workforce is not loyal to the
entrepreneurs or owners of the units as they are not getting any benefits from
the company. Hence, if the workers are given proper benefits and facilities, they
can deliver good results to the entrepreneurs and be loyal at any point of time.

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 12. Action plan for the enterprises

Objective Strategy Activity Expected Resource support

outcomes/outputs (expert/financing)

Skill To train BTRA/NITRA/ Skilled workforce Finance from the

Development weavers on SASMIRA will be available to Minority
Programmes Auto/Sulzer/ may be used industry and also Development
Shuttlesess to train with the workers are corporation /
looms and the funding well placed with Central Govt.
linking to from Minority good pay Schemes of MSME/
Industry Development Min of oTextiles
issuing a
certificates to
trainees

Market To provide To establish This will enable the Finance from the
Resource Marketing a MRC to micro enterprises to Minority
Center linkages to provide get access to new Development
(MRC) the Micro information markets and new corporation / Govt.
Enterprises and avenues for the Schemes
marketing growth.
linkages to
local and
international
markets

To organize Delivery  In depth Enhanced access to NGO, professional

linkages with through Co- study of services and organizations
the govt operatives/ each and schemes support required for
institutions Stakeholders every Enabling Business planning
and banking scheme environment
against created
eligibility Entrepreneurs
 Interface ability to cope with
meetings finance and
between schemes
association
s, govt and
Banks

Restructurin Delivery  In depth With the support of

g of existing through interpretati Enabling schemes BMOs or
schemes for Associations on of each to mend according professional
the benefit / scheme to the need of the organizations or
of Micro Stakeholders and micro political influence
entrepreneur resubmit entrepreneurs and through local
s with for the benefit of leaders.
proposals only SMEs & large
which fits enterprises.
eligibility of
Micro
entreprene
urs

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To External - Training Enhanced capacities NGO/ professional
strengthen mentor to the of leaders, enhance
organizations
the existing support leaders awareness on govt
associations - Business schemes
planning A clear direction to
the association

To provide Strategically Training on Enhance sanitation Govt resources; and

required utilize the Sanitation situation in the NGO assistance
assistance services of issues; location
for organized the local Legal aid Reduced morbidity
linkages for bodies/local rate
water, leaders
sanitation
and other
timely
support

Establishing To provide To be Increase the profit BMOs / Associations

Raw material raw operated on of the enterprises / Active
Sources materials at co-operative and easy Entrepreneurs
the nominal mode by availability. Rates
costs by making are under the
establishing available of control stakeholders
raw material yarn, dyes & only
banking chemicals
and other
accessories
and
consumables

Motivational Educating Conduct one Results reflect in BMOs / Associations

workshop for the workers day work environments / Active
the workers on ethics workshop or and reduce Entrepreneurs
and and morals monthly absenteeism and
entrepreneur classes on enhanced
s motivational, production
vales and
ethics

Co-operative Formation of 8-10 Collective Finance from the

Consortium / producing companies bargaining power, Minority
Approach for companies may be cost effectiveness Development
marketing into formed as inputs, quality raw corporation / Govt.
consortium consortium materials available Schemes and
for various for raw due to individual
benefits material collectiveness to contributions
purchases, purchase in bulk.
marketing
and other
inputs

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Housing for To get the To follow up Powerloom workers Local associations /
Workers free housing with are going to get Workers Union,
allotments to Bhiwandi free housing from Local community
Powerloom municipality local municipality leaders and
workforce online with authorities. Politicians
from Malegaon to
Municipality get order
/ State Govt. passed for
Powerloom
workers
under
Gruhakul
***

54