The Telegraph
Since 1st March, 1999
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Cloth exporters seek contract work nod

Mumbai, March 19: Apparel exporters, which play a major role in the country’s textile trade, is seeking the right to hire labour on contract.

Treating contract labour as “fixed-time appointment”, the industry is lobbying both with the government and the Left parties, which will have a say in implementing such a bill.

While leading garment exporters, such as Bangalore-based Gokuldas Exports, OrientCraft and Shahi Exports, and overseas buyers like Target Corporation have been impressing upon the government to allow fixed-time labour, the industry also met CPM general secretary Prakash Karat more than a month back to sell the idea.

Industry circles said there is no need to balk at fixed-time labour. They said the government has adopted a similar strategy in the National Rural Employment Guarantee Scheme, which assures 100 days of employment a year to each rural household.

They said the industry was even willing to top up the government’s provisions in the rural employment guarantee scheme by offering employment for around 180 days.

The demand has its basis in the seasonal character of the readymade garments sector. The exporters organise their production to meet the heavy demand for clothes in the spring and summer seasons. Hence, there is a surplus labour during the lean season. At the same time, the existing labour strength might be insufficient when there are large orders.

“If I suddenly get an order that cannot be undertaken entirely by my existing workforce, I will have to look at hiring surplus labour. However, the nature of our industry is such that this order may not be repeated, in which case, I am saddled with the surplus labour. According to the existing labour laws, while I cannot hire people on contract, it is also virtually impossible to shut down a unit if it employs more than 100 workers. It is because of these difficulties that the industry has been seeking the government’s approval to appoint fixed-time workers. These people can be retained if the company bags a repeat order,” said a leading garment exporter who does not wish to be identified.

The Indian apparel market is estimated at Rs 43,000 crore with exports growing at a compounded annual growth rate of more than 13 per cent over the last decade.

During 2005, the first year of quota phase-out, apparel exports to the US, which is the biggest market, was close to $3 billion.

According to the DHL-McKinsey apparel and textile trade report, the value of the global textile and apparel industry is likely to go up to $248 billion by 2008 with China, India and Pakistan the probable winners.

The report predicted that India has the potential to increase its share from 4 per cent to 6.5 per cent valued at $16 billion by 2008.

Observers say although the domestic industry is on a strong footing, the existing labour laws continue to be a drag in attracting fresh investments, particularly from foreign companies.

“We have a good raw material base, well integrated industry and qualified labour force. However, the labour laws do need some major changes. For instance, if I employ more than 100 workers in a unit, I will have to seek necessary permission for its closure. As it will never come, businessmen have been opening up five different factories employing less than 100 workers. However, in the process, one loses the benefits of large-scale economies,” added another garment exporter.

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