Karnataka weavers caught in the web of distress

Prasanna M K, a 58-year-old weaver at Doddaballapur town, earns about Rs 300 per day. He recently underwent an open-heart surgery. With no savings from his earnings (he has been working at a powerloom unit for the past 35 years) and no statutory benefits like PF or gratuity, he had to beg and borrow from friends and relatives to arrange money for his hospital expenses. Even after the surgery, he continues to work on the powerloom for his livelihood.

Narayanamurthy, a 73-year-old powerloom weaver, saw his daily wages drop by 20% due to the Covid-19 lockdown. He has no social security benefits either.

These two weavers are among 36 lakh-odd people across Karnataka who are finding it difficult to sustain as the loom industry is crippling. The pandemic has only worsened the situation with small clusters closing down the units and the big ones like Doddaballapur (The town has some 50,000 weavers, who make a living through the 20,000 powerlooms) struggling to survive.

The financial distress in the sector is so severe that an estimated 17 persons ended their lives by suicide in the last one year, according to industry sources.

While Covid-19 has dented the sales of weavers across all the regions in the state, the weavers in Belagavi suffered a double blow.

In 2019, the floods in Belagavi damaged more than 25,000 powerlooms — 70% of units present in the district. Now, lakhs of sarees are lying unsold due to lack of demand in the market even as their debts are mounting.

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The drastic drop in demand due to the pandemic is also met by a surge in prices of key raw materials.

“The cost of manufacturing has suddenly increased after the pandemic,” says D V Jagadish, a weaver of silk sarees in Doddaballapur.

“The prices of raw-materials like silk yarn have gone up by 25% to Rs 4,000 per kg. The prices of zari have increased by 20% to Rs 650 for 240 grams. At the same time, our selling price has come down by 25-30% due to lack of demand after the lockdown. In such a situation, how can we survive and grow?”

The powerloom units have been witnessing a decline in sales since the demonetisation in November 2016, when their cash flows were affected for a year and the introduction of GST in 2017.

After the introduction of GST in 2017, their tax outgo increased manifold, from just about 5% VAT earlier to 18% GST on purchase of raw materials and new machinery.

The latest blow to powerlooms is the suspension of power subsidy for new units. For the last one year, the electricity supply companies in the state discontinued supply of subsidised power to weavers due to non-payment of bills to the tune of Rs 267 crore by the Department of Textiles to the power supply companies like Bescom.

Till last year, their monthly bills were in the range of Rs 1,750. With the suspension of the subsidy, these powerloom units are forced to pay Rs 8,000 per month, says B G Hemantharaju, president of Navodaya Weavers’ Cooperative Society.

The cut in power subsidy has led to an estimated 20-25% of the operating powerlooms shut down, leading to a loss of income for the owners.

An estimated 50% of the 84 export-oriented powerloom units at the Doddaballapur Integrated Textile Park (DITP) have shut down due to lack of export orders and decline in demand for their produce in the domestic market, said K Girish Kumar, Whole-time Director, DITP.

A large number of powerloom owners resorted to distress selling at lower prices to middlemen, in order to maintain their cash flow situation. Today, they are forced to sell at much lower prices because the middlemen are not ready to give them a raise in their billing.

“GST impacted our business because we had to pay more in terms of taxes. AP, Telangana traders do not give GST bills. It is only a Cash and Carry business. They reject our goods if we insist on a GST bill,” Hemantharaju adds.

The handloom weavers in Molakalmuru, a small town in Chitradurga district, have a different problem.

Till a decade ago, most of the households in the town had handlooms and the entire family was engaged in saree weaving. Of late, the situation has changed, and the taluk, which had more than 5,000 handlooms till recently, is left with just about 400 handlooms.

Many weavers believe that handloom silk sarees are on the verge of extinction, pushed to the edge by the dominance of powerlooms, dearth of skilled weavers, high costs, and absence of advanced marketing strategies.

Unprofitable venture

Some traditional handloom weavers producing silk sarees are switching over to powerlooms for the sake of survival, and yet others are planning to leave their traditional occupation as they no longer find it profitable.

The entire powerloom industry is also going through an existential crisis, as the younger generation is not keen on taking up weaving and continuing the family business, preferring to work in factories instead.

In Doddaballapur, for instance, the average age of weavers is 40 years. There is a similar situation in other textile clusters across the state, like Molakalmuru, Ilkal, Belagavi, Gadag-Betageri, Chamarajanagar, and Tumakuru.

“Unless the government provides adequate subsidy on modernisation and capital, there is no encouragement for them to continue the family business,” says D G Prakash, who engages in saree polishing work.

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His suggestion to the Karnataka government is to extend subsidies on par with that of neighbouring Andhra Pradesh. In Andhra Pradesh, weavers get 60% subsidy on installation of new machinery, which costs upto Rs 40 lakh per unit.

The Karnataka government, in the recent textile policy announced a differentiated approach. “The state government gives just 10% subsidy on new machinery for units in south Karnataka, while it is 40% for units in northern parts of the state,” says Jagadish.

“We urge the government to take immediate measures and give necessary directions to the Department of Textiles to release the pending power subsidy to enable ESCOMS supply power at subsidised rate. This would give a great relief to the sector at this critical situation,” said K B Arasappa, president, Karnataka Small Scale Industries Association, said.

No brand name

The absence of a brand name for the weaves from Doddaballapur means the wedding silk sarees manufactured in the region are sold to traders in Dharmavaram in Andhra Pradesh and Kanchipuram in neighbouring Tamil Nadu for just Rs 5,000 per silk saree, which is in turn marketed at Rs 15,000 per piece by the traders. Even daily office wear silk sarees are sold at just Rs 3,000 per piece, while the same is sold in the markets at double the price. “We have been exploited by traders because we do not have a brand name for our sarees. We sell our sarees to middlemen and in turn they sell them in the markets under the brand name of Dharmavaram and Kanchipuram for twice the price,” says Jagadish.

The efforts by some officials have also been stymied. C S Karigowda, the former deputy commissioner of Bengaluru Rural district, had reserved government land on the highway to build a shopping complex for weavers in Doddaballapur and had even tried to create a brand name for the product, before he was transferred.

“As part of the Covid-19 relief package, we have provided a financial assistance of Rs 2,000 to about 50,000 handloom weavers and 55,000 powerloom weavers across the state. We have also made arrangements for payment of electricity arrears amounting to over Rs 200 crore to Bescom very soon. Once it is paid, Bescom will sanction new power connections, which have been pending for many days,” Upendra Singh, Commissioner for textiles, told DH.

(With inputs from Nrupatunga S K and Raju Gavali)