PROBLEMS OF POWERLOOM INDUSTRY IN...
Transcript of PROBLEMS OF POWERLOOM INDUSTRY IN...
Chapter_6
PROBLEMS OF POWERLOOM
INDUSTRY IN MALEGAON
===================================================
RAW MATERIAL
COTTON YARN:
The textile industry plays very important role in Indian economy. It ranks
second after the agriculture. Besides the industrial production, it provides
employment to millions of the people of the country and gives a handsome earning
of foreign exchange through export. It is also source of livelihood in villages and
remote areas. Millions of people in our country depend upon it. The rapid growth
and development of this industry is remarkable.
The Indian textile industry is consisted of the following three groups
i) Mill Sector
ii) Handloom Sector
iii) Powerloom Sector
Or in terms of fabrics used namely cotton textiles, woolen textiles, man
made Textiles and Silk textiles
As far as powerloom industry of Malegaon is concerned, it is categorized in
cotton textiles. This powerloom industry is fully dependent on cotton yarn either in
the form of cone or hank. So also the powerlooms depend on the textile mills for
the supply of yarn. Generally, in Malegaon yarn is dyed for weaving coloured
sarees.
(I) AVAILABILITY OF YARN:
At Malegaon the powerloom owners had one to four powerlooms in the
beginning. According to the growth and development of powerloom industry, the
requirement and consumption also increased. But the production and supply of
yarn was not increased accordingly.
Due to non-availability and short supply of yarn, the powerloom industry
suffered a lot. Generally the powerloom owners are dependent on yarn brokers and
yarn merchants, who are usually Gujrat & Marvadee traders. They fix the price of
yarn at their own will. In other words, it can be said that the powerloom owners are
like puppets in the hands of these traders. They exploit the powerloom owners and
earn a good profit.
(II) EXPLOITATION BY YARN MERCHANTS:
The powerloom industry faces the exploitation from the yarn merchants. The
composite mills produce and supply the yarn to the powerloom weavers. For the
distribution of yarn, a circle has been formed by them.
They have installed their own sale depots at the different powerloom centres.
These depots are actually run by the relatives of the spinning mill management.
These relatives of the mill management arrange these sell depots. With their help
the sell and purchase business of yarn is carried out. In this manner, the yarn
reaches the actual users or the weavers through 5 to 6 mediators. In each hand the
profit is added. There are number of traders buying the yarn, so the prices go
higher and higher as demand increases. Ultimately artificial shortage of yarn is
created in the market.
Apart from this, the traders do not pay the sales tax to the government In this
way the Union Government loses crores of rupees. This malpractice is going on
since the yarn is produced.
Though many times this has been brought to the notice of the Government it
has failed to take effective steps in the matter. No doubt the small powerloom
owners who are financially poor, are very much in the grip of mill owners and
middlemen and are being exploited and put to hardship.
(III) MILL OWNERS AND POLITICAL LEADERS:
The mill owners and political leaders have stakes in badly affecting
powerloom owners and hence they provide funds to political parties to get their
interests protected.
(IV) THE POLICY OF THE GOVERNMENT:
Unfortunately, there is no clear cut policy of the government, as far as the
textile industry is concerned in general and for the powerloom industry in
particular . In the words of Ashok Mehta committee report, “It does not appear that
the Government had at any time, laid down a clear cut policy in regards to
powerloom”. (Ashok Mehta Committee Report P.No. 31) 1
Despite the important function played by powerloom industry it is not
receiving even normal encouragement from the Government.
1 - (IV) (A) EXCISE DUTY (1964) :
In 1961, for the first time, excise duty was introduced on mill made yarn,
Different counts of yarn were classified into two categories. Yarn of 35, count was
charged 10 n.p. per k.g., yarn of 35 counts and above was charged 15 n.p. per k.g.
In 1962, the categorization of counts was expanded according to the
following table.
Table No. 6.1
Yarn count Up to 16 10 n.p. per kg.
17 to 34 13.5 n.p. per kg.
35 to 47 18 n.p. per kg.
48 and above 27 n.p. per kg.
Ashok Mehta Committee Report Page No. 89 2
In 1963-64, a surcharge was levied on the excise duty at the rate of 20% for
yarn of counts as under.
Table No. 6.2
1 to 6 counts 10 n.p.
6 to 14 counts 15 n.p.
14 to 22 counts 25 n.p.
23 to 29 counts 35 n.p.
29 to 40 counts 45 n.p.
40 to 51 counts 60 n.p.
51 and above counts 90 n.p.
(Awami Awaz Weekly, Malegaon dt.16-3-1964) 3
In the beginning a minor relief was given to the handloom weavers. Hanks
yarn up to 40's has been exempted from excise levy and the hank yarn above 40s
was charged at a concessional rate.
“In the Finance Act 1964-65, full exemption from excise levy is allowed for
counts up to 34s”. Notification No. 29 4
A clear intention of the government is seen in the framing of Finance Act of
1964-65. The Government exempted the handloom weavers, as they use only the
yarn of up to 30s counts, so the powerloom owners suffered a lot.
This excise duty was enforced from 1-3-1964. Due to this duty many sizing
were locked. As a result the grey cloth producers had to shut down their mills.
Thousands of labourers became jobless. In protest of excise duty processions were
arranged on 17th April 1964. A delegation of eminent political leaders was sent to
New Delhi to put their grievances before the Union Minister like. Shri Y. B.
Chavan the Defence Minister, Commerce and Industries Minister Shri. Kanugo, T.
T. Krishnammchari Finance Minister, but the government did not pay any
sympathetic attention to the matter.
Apart from this, all parties meeting was called. It decided to observe a
complete “Malegaon Bandh” organised by “Malegaon Textile Board”. A morcha
was taken to the Deputy Collector's office against the Excise duty. All these
agitations were fruitless. Even political leaders could not do anything.
FLUCTUATION IN YARN PRICES :
One more problem of fluctuating prices of yarn was very troublesome. The
prices of yarn were fixed by the capitalists, Mill owners and the middlemen by
creating artificial shortage of yarn. Instead of this the following factors caused to
make the yarn available on a high cost.
1) The Government exports the raw cotton as well as finer yarn to earn foreign
exchange.
2) As a result, the shortage of raw cotton and yarn is created and ultimately the
prices of yarn go up.
The Government has provided loan to the spinning mills. These spinning
mills are in great loss.
The capital of Government is blocked in these spinning mills. So that the
government forced them for the production of finer yarn in order to get back
the blocked capital in spinning mills.
3) Apart from excise duty and taxes by the State Government, the local and
municipal octroi is an additional factor. At Malegaon 2% octroi is charged
on the yarn.
ABOLITION OF OCTROI :
The Government of Maharashtra Shasan Patra Kramank Nagar Vikas
Vibhag abolished the octroi in the State by its notification No. GEN
1099/Letter No. 70/99/ No. 14 dated 26-03-1999. Almost all the weavers and
businessmen of Malegaon appreciated the decision of the Government. The
weavers were comforted by the abolition of the octroi. Due to this step time,
money and energy are saved. Some how the cloth of Malegaon shall be cheaper
than the other centres and it shall compete with them. The yarn shall be available
cheaper by up to 5 n.p. per meter.
(a) ABOLITION OF SOCIAL EVIL :
Not only at Malegaon but powerloom owners at other centres like Bhiwandi,
Dhule, Ichalkaranji and Solapur many corrupt practices were prevailent. As such
the fairly large amount of collected octri was channeled into the hands of gundas.
These gundas some times were councilors and some times the employees of the
municipalities themselves.
The way of business is that they contact either weavers or yarn merchants
for the delivery of yarn. After the arrival of yarn in the Malegaon Municipal
corporation area, these goondas deliver the yarn bags by small trolley without
paying the octroi. If anybody comes in their way, they were ready to beat them
with such weapons as sword, iron rods, sticks and hockey sticks. Sometimes they
killed them.
After the delivery they receiveed the fifty percent of the actual octroi of
Municipal council. In this way these goondas earned 5 to 7 lacs every week. It was
loss to public institution. With this black money several social evils like rape,
murder, drinking, terror etc. were in full swing.
Apart from this, black money was used on the occasion of political activities
like Municipal election and particularly in the election of President of Municipal
council. It is learnt that the candidate in the race of president purchased the
Municipal Councilors with one to 2 lacs of rupees each. In other words one could
get the chair of President by paying near about 50 lacs. After getting the chair, only
one programme there remained and it was to get back their invested money in the
race of election. So he too used to get involved in the corruption of octroi. The
activities of the development of city were neglected. The above mentioned
business is called as “Alter” especially in Malegaon.
4) The powerloom owners of Malegaon have no faith in co-operative
movements. Therefore the industry has not made much progress in the
co-operative movement. The majority of the powerloom owners have been
totally dependent, from Yarn purchasing to cloth selling. All the
transactions are done on credit basis. So at every stage the powerloom
owners are exploited.
(a) A powerloom owner purchases yarn on one week’s credit. If the money is
not paid within 8 days, extra 2 rupees per 5 Kg is charged on whole yarn. It
is called L.P. that means “Late Payment”. In this way the yarn becomes
costlier than cash purchasing.
(b) Ultimately the cloth prepared with L.P. is dearer than prepared on cash
payment. As a result, the powerloom owner has to sell his cloth according to
market rate which is lower than his actual cost of production. Also he is
forced to get the cheques of a date of almost 7 to 8 days later. To cash the
cheque he goes to commission agents who exploit him by deducting
commission of four percent per day. At all stages, a weaver is exploited by
them.
There were 66 spinning mills in Maharashtra. Out of sixty six, ten mills are
fair and remaining 56 mills were in difficulty of paying 548 crore 49 lac rupees.
It was reported that the minimum loss of Jawahar mills of Dhule is Rs. 26
Lacs while the maximum loss was Rs. 11 crores. It was also said that this year no
mill could earn profits. The rate of cotton increased by Rs. 5.53 to Rs. 6.18 while
the rate of yarn by Rs. 3.52 to Rs. 5.54 only. In 1997-98, 771 lac kg yarn was
produced by all the spinning mills.
COLOUR, CHEMICAL AND ACCESSORIES :
In our country, the first powerloom unit was established in 1909. In
Malegaon the first powerloom unit was introduced by Seth Abdur Razzaque
Faqeer Mohammed, residing in Islampura, in 1936. It was costing Rs. 50/- per
loom. The loom was run by diesel engine. In 1938, after the use of electricity the
growth of powerloom accelerated. Generally, in Malegaon, the looms were
supplied by the cotton Textile Mills of Mumbai and Ahmedabad.
According to Ashok Mehta Committee report 7500 looms were replaced or
provided every year to the powerloom industry. Scraped and discarded looms were
brought in Malegaon by the loom suppliers and made them capable of use in the
powerloom industry. Cent percent rejected looms were running in Malegaon. This
is one of the most important reasons that the powerloom industry of Malegaon was
not able to compete in cloth production with other centres. Despite this drawback,
the mechanics and skill of weavers is praiseworthy for manufacturing coloured
sarees and grey cloth by using the out dated looms.
Now a days a loom of 52” was available at Rs. 7000/- to 14000/- whereas,
the price of new brand loom was to Rs. 20,000/- (Plain loom), while the modern
automatic loom was available at Rs. 1 to 40 or 50 lacs for one loom.
AUTOMATIC POWERLOOM :
Recently With the effort of Shri Momin Mujeeb Ahmed (Representative of
All India Textile Board), a seminar took place in Sabir Sattar Town Hall at
Malegaon on 24th July 1999. It was the first occasion that any Textile
Commissioner, Shri B.C. Khatua, visited Malegaon and guide the weavers about
the problems faced in the installation of automatic looms. Additional Textile
Commissioner, Shri Shetty and Shri Bandu Upadhyay director of BTRA (Bombay
Textile Research Association) and Mithuanun, Chairman of PDEXIL, also
attended the Seminar.
In the Seminar it was emphasized to install modernized powerlooms. After a minor
alteration by changing some parts in "Symco Gawaliar Loom", it would become an
automatic loom. The cost of alteration was certainly 20000/- rupees which would
be beyond the capacity of the powerloom owners of Malegaon. In this regard one
recommendation of Ashok Mehta Committee could be given “Research in the
matter of improvement of weaving techniques should be such as to fit in with the
small scale nature of operation of the powerloom and should not be focused only
on the application of modem automatic techniques which are conductive to
centralize and mass production”. 5
(Page 123)
COLOUR AND CHEMICALS :
The powerloom industry of Malegaon is well known for its coloured sarees.
Colour and chemicals are required for dying and bleaching the yarn. These
materials were supplied by the dealers, wholesalers and agents in the market. There
were no shortages of these materials. It never created any problem for the industry.
The artificial shortage was created to get the huge profit. Most of the Muslims
started business of colour and chemicals. But due to lack of sufficient knowledge
and capital, they could not succeed.
Owing to the growth of production of grey cotton, roto, polyester and P. C.
cloth and ban on the production of coloured sarees by the government, the
production on powerlooms diminished. Somehow, about 5000 looms are
manufacturing coloured sarees at present, so the colour and chemicals are not
required on large scale. With the diminishing of coloured sarees, the colour and
chemicals demand reduced.
With the growth of manufacturing in grey cotton cloth, the sizing work
increased for making beams. The need of sizing material increased. But it also had
no problem. In the present age the manufacturing of non-cotton cloth like P. C.
Polyester, roto etc. doesn't require any material for sizing and processing.
ACCESSORIES AND SPARE PARTS :
The powerloom industry of Malegaon totally depends on rejected looms by
mills of Bombay and Ahmedabad. Most of the spare parts also are brought from
mills at a cheaper rate. Some parts and components are manufactured in the local
place itself. In Malegaon, there are many textile accessories shops which supply
these spare parts. Some wooden parts like shuttle frame etc. are provided from
Ludhiana.
CAPITAL :
Fixed Capital and Working Capital - Marketing Finance
During the survey and discussion with different powerloom owners, it is
noticed that the powerloom sector in Malegaon is completely ignorant in the matter
of provision of finance. There is no financial help from the government to the
powerloom industry. For capital equipment preparatory and other processing
machines and working capital including marketing finance is required for cotton or
non-cotton industry.
Fixed Capital:
Fixed capital includes land, construction of shed, powerlooms etc. At present
one powerloom is available at a rate from 7000/- to 12000/- rupees. The shed is
generally contains 20 to 24 powerlooms.
Table No. 6.3
No. Particulars Wooden Shed R.C.C. Shed
1
2
3
4
5
Capital cost of land 40’ x 50’
Capital cost of construction for the shed
Capital cost of powerloom including
motor and switches of 20 powerlooms
Electric Installation
Equipment
10,000
1,50,000
2,12,000
15,000
25,000
1,00,000
3,00,000
2,12,000
15,000
25,000
Total Fixed Capital 5,02,000 6,52,000
In 1984-85 an eminent Saree Commission Agent started a shop to satisfy the
manufacturing needs with the name of Kushal Textile Industries. Of course it was
a unique step but taken by a non weaver.
The following table shows the investment for the fixed capital including
working finance. (According to survey report in Malegaon)
At present about 25,000/- to 30,000/- rupees are required to install one
powerloom. All the cost mentioned above differ from the price index and
fluctuation of the market. Since the independence of India the prices are going up
day by day. Hence it is very difficult for the poorer section and middle class people
to install powerlooms.
(a) The general Practice in Malegaon :
The general practice to install a powerloom in Malegaon is that a common
man saves some money in group which is known as bissi. Suppose some 20 person
come together and deposit 100/- rupees each with the convener per week. The sum
of rupees 2000/- is given to the needy person or the name is drawn out by lots. It
goes on for 20 weeks. In the local language it is called “bissi”.
This type of bissi is common from 500/- rupees to one lakh rupees. It is a
financial help from the common pool of money. Another type of bissi is that there
are some organizations which collect the money every Friday. A diary is given to
the man. The saving amount is mentioned with date sign and stamp. The diary
holder can withdraw the amount when required otherwise the collected amount is
distributed to the diary holders on the occasion of “Shab-eBarat”. The diary holder
generally uses the amount for "Ramzan Idd" cloth. Some persons use it for
marriage, land purchase, house making and for installation of powerlooms or
working capital. It is just like saving account without interest. The whole business
of Bissi goes on credit basis. Of course it is a unique thing in Malegaon for poor
laboures. It doesn't differentiate in men, women, poor, rich labourers and
powerloom owners. Almost all the persons save money as per their capacity.
In this way a common man saves money to enable himself to buy a
powerloom. Sometimes a person gets the amount through mortgage or by selling
the ornaments for purchasing the powerloom. That powerloom is installed in a
rented shed. Beem and welfare are taken from master weavers. Day by day,
through hard work and by saving the amount, he increases the looms without
taking any help from financial institution and from Mahajan without interest.
Being from Muslim community, people keep themselves away from banking
system or financial institution in order to keep themselves away from interest.
(b) Rental Basis :
The another practice of setting up powerloom is on the rental basis. The
employees, widows or persons who are not interested in their powerloom give it on
rent. At present the rent is Rs. 150/- per powerloom per month. The agreement is
done for eleven months. The whole amount of rent (Rs. 1650/-) is received by
powerloom holder at a time. In this way the runner of the powerloom saves money
for purchasing the powerloom.
Sometimes a powerloom owner who becomes bankrupt, gives his shed on
rent. Sometimes a person who returns from foreign countries like United Arab
Emirates, Dubai, Saudi Arabia, Kuwait, Masqat etc. by earning lakhs of rupees,
invest them in by setting up powerloom shed and gives it to others on a rental
basis.
In this situation, only working capital is sufficient to run the powerloom.
Sometimes the yarn is also available on the credit basis. There are many
powerloom owners who run the powerloom without investing money. But such
persons are exploited at every stage in the business. This is very risky not only for
the yarn dealers but also for the powerloom owners. In a year or two, it is common
that a powerloom owner declares himself bankrupt due to continuous slack in the
market, fluctuation of yarn and cloth prices or the bankruptcy of yarn dealers and
cloth merchants.
Sometimes, if the luck is with the powerloom owner, he earns a lot and
becomes a big businessman. There are several examples of such powerloom
owners in Malegaon.
WORKING CAPITAL :
The matter of finance, the working capital is totally ignored in Malegaon.
Generally, one powerloom requires 20 kg cotton yarn for coloured sarees, for one
shift, while 48 kg cotton yarn in the form of cones for grey cloth working in two
shifts. In case of P.C. and roto, it is 40 kg for those working in double shifts. All
the required yarn is given for one week.
Finance is required for capital equipment, preparatory and other processing
machines. Working capital including marketing finance for coloured sarees can be
seen in the following table.
Working capital required for coloured sarees of cotton yarn.
Table No. 6.4
Capital Cost of
one powerloom
Silk
Border
Zari
Border
Kasab
Border Boutique
(1) Capital cost of yarn preparatory
widing, warping etc.
(2) Proportion capital cost of
finishing, lable, folding & press etc.
15,000
2.0
13,000
2.0
17,000
2.0
20,000
2.0
Total Capital Cost 15002/0 13002/0 17002/0 20002/0
For Per Month
Table No. 6.5
(1) To cover yarn consumption
stock, stock of finished cloth
(2) Other Miscellaneous including
50,000
18,000
5,000
40,000
15,000
5,000
50,000
18,000
5,000
50,000
18,000
5,000
wages etc.
Total Working Capital Required
would be.
73,000 60,000 73,000 73,000
Working Capital Required for Grey Cloth of
Cotton Yarn for One Powerloom
Table No. 6.6
Capital Cost of One Powerloom Cambric Poplin
(1) Capital cost of yarn preparatory widing,
warping, sizing etc.
(2) Proportional capital cost of finishing etc.
9,000
5.0
9,000
5.0
Total Capital Cost 9005.0 9005.0
For 15 Days
Working Capital Required for PC Roto or Synthetic Yarn
Table No.6.7
(1) To cover yarn consumption stock,
stock of finished cloth
(2) Other miscellaneous required would be
72,000
13,000
72,000
13,000
Total Working Capital Required would be 85,000 85,000
For 4 Months
Working Capital Required for P.C. or Roto Synthetic Yarn for One
Powerloom
Table No. 6.8
Capital Cost of One Powerloom P.C. Roto
(1) Capital cost of yarn preparatory
widing, warping etc.
(2) Proportionate capital cost of finishing etc.
7,810
10
7,810
10
Total Capital Cost 7,820 7,820
For 15 Days
Table No. 6.9
(1) To cover yarn consumption stock,
stock of finished cloth
(2)Other miscellaneous items including wages etc.
56,000
6,500
56,000
6,500
Total Working Capital Required would be 62,560 62,560
For 4 Months
MARKETING FINANCE :
Marketing finance is as important as the fixed capital and working capital.
The Marketing finance covers the supply of funds for the fulfillment of different
marketing functions which include purchasing of raw materials and selling of
finished goods. Credit facilities can be provided to the consumers like many other
business and industries. The powerloom industry of Malegaon also needs the
marketing finance. In Malegaon there are very few powerloom owners who sell
their production at their own will. They stock their goods in the depression period.
They buy the required materials on cash but sell their finished goods on credit at
high margin. They enjoy a handsome profit, because they are financially strong.
They have sufficient capital for inventories and requirement.
In respect of marketing finance, the weaker section i.e. small powerloom
owners have not enough money to run their powerlooms in a good manner. They
are not in position to stock the yarn and other requirement. They cannot sell their
sarees on credit for more than one week. They are usually the small powerloom
owners. So they take loans from their friends and relatives.
Thursday is the day of harassment for such powerloom owners because they
have to pay the wages of workers, payment of textile stores and the expenses of his
households. In such a situation he has to sell his product at under-cast, helplessly.
On these occasions there is no organization to help them. The role of government
is totally absent.
Neither the government nor the political parties are interested in helping the
powerloom industry. The powerloom owners are particularly divided into two
political parties i.e. one is Congress Party (I) and another is Janata Dal (S) lead by
Nihal Ahmed. The political parties are opportunist who get the advantage of the
occasion to strengthen their votes for the election. The government, the political
parties and powerloom owners and labourers all are passive in this regard. They do
not set up any financial organization for the industry. Being from Muslim religion,
they do not take any interest in the banks. The nationalized banks and the State
Government should come forward with a time bound programme to free weavers
from the clutches of Master weavers.
According to the federation of the cotton Powerloom Association of
Maharashtra, generally the powerloom establishments are unable to obtain
facilities from banks or any other financial institutions for working capital as well
as for marketing capital. Some of powerloom owners have their own finances or
resources.
CONCLUSION :
After an overall study of the financial condition of the Malegaon powerloom
industry, it is concluded that, financial institutions should be set up for working as
well as marketing capital.
Taking into consideration the importance of small scale powerloom industry
which is playing a vital role in the economy of the country, efforts should be made
to ensure the powerloom owners to obtain the necessary finance.
The State Finance Corporation, Commercial Banks, particularly the State
Bank of India may have to step up in the field.
ELECTRICITY :
Malegaon has a very long his of electricity supply. Initially the
Amalgamated Electricity encouraged the powerloom industry. But its stance was
changed in later period. Not different was the case of the MSEB (establisher) in
1960.
(a) Electric Charges :
Besides the budget, sometimes the electricity charges are increased two or
three times in a year and that is unbearable for powerloom owners. Due to the
increase in the cost of production of cloth the industry suffered huge losses. In such
circumstances the political parties and their leaders took advantage of situation.
Thus the chain of action and reaction is going a since the establishment of electric
company.
The electric charges increased gradually as given below. 6
Table No. 6.10
1938 The electricity was provided almost free of cost.
1959 0.17 N. P. per Unit
1962 0.03 N.P. per Unit Electric Tax
1963 0.44 to 0.50 N. P. per Unit
1964 Increased by 0. 19 to 0.22 N. P. per Unit
1969 Increased by 0. 18 to 0.31 N. P. per Unit
1985 MSEB 0.35 to 0.70 paise increased up to 120 unit 0.58 paise
increased to 0.88 paise.
120 unit and above 0.60 paise increased by 0.98 paise.
1997 Fixed rate Rs. 120.00 per powerloom
1998 Fixed increased to Rs. 180.00 per powerloom
2000 Proposed Rs. 300.00 per Powerloom.
In near future the proposal of electric charges per powerloom would be
almost Rs. 700/per month. It is because of the Enron Project. An American
Company, at Dabhol would supply the electricity at a rate of Rs. 4.60 per unit. At
such a horrible rate not only the powerloom industry but also other industries
would be locked up.
A summary of H. T. Tariff for the year 2000-2001 is given below.
(b) Maharashtra State Electricity Board (MSEB) :
In June 1963, when electric charges were increased from 0.44 to 0.50 paise
by the Amalgated Electric Company (AEC) the power consumers association
protested against it and demanded the electricity supply from “Koena Project" of
the Maharashtra Government. The electricity produced there cheaper. The
Maharashtra Government was politically pressurized to take over the charge from
AEC. It was pointed out that 4000 powerlooms were running on electricity
whereas 150000 were working on diesel engines, as electricity was costly. In
respect of thermal energy an enquiry was made by the M.L.A. Shri Nihal Ahmed
in Maharashtra Assembly. But it seemed that Government was not interested in the
matter. The Government failed to keep promises made by it in 1965, 1966, 1967
and 1968 about supply of Thermal Electricity to Malegaon.
After several agitations and strikes the Government of Maharashtra started
to supply Thermal Electricity in Malegaon on 22nd
Aug. 1969 at the old rate. It was
protested by consumers and they opposed to pay the bill.
In March 1970, a new condition was imposed by the Government that the
consumers must produce a certificate of small scale industries registration to install
the fresh motive power. Due to new condition the fresh applications were not
eligible without certificate and such applications were not accepted by the
company.
The agitation was continued to reduce the electric charges of thermal
electricity. Helplessly, the Government made a little reduction in the rate.
According to new rate, for the first 150 units, charge will be 0.19 paise per unit for
motive power. It was still more than the M.S.E.B. rate. Now the rate enforced
from. 1st April 1971 was again not accepted by consumers.
In course of time due to the undertaking of electric supply by the AEC come
to an end. The company was trying to continue their services. 1976-77 was the
worst period in the history of electric supply in Malegaon Electricity was supplied
only for 10 to 12 hrs. a day that resulted in the low production of cloth the small
powerloom owners having up to 6 to 8 loom locked up their units for not having an
alternative to run the looms. As a result most of the labourers became jobless. Such
labourers migrated to Surat, Bhiwandi, and Ahmedabad to earn their livelihood.
The situation was so critical that Government, municipal council and
political parties couldn't do anything. The powerloom owners as well as labour
organizations were helpless.
There was no solution. It was a great shock to Malegaon Powerloom
Industry. Inspite of this great crisis the powerloom owners neither united nor tried
to find out solution for the future. This crisis provided a golden chance to big
powerloom owners to manufacture their product with diesel engine. They earned
handsome money by selling their product on higher margin due to short supply. So
they didn't want to solve the problem.
ROLE OF M.S.E.B. :
From 1938 to 1975, a span of 37 years, the A.E.C. was sole enterprise for
supply of electricity in Malegaon. The service of A.E.C. was never in the favour of
powerloom industry. After the establishment of Maharashtra State the Government
encouraged the co-operative movement especially in the industrial field. As a
result the private companies were discouraged and their services were taken over
by the Government. Hence MSEB took place of AEC in supply of electricity to
Malegaon in 1975. The people of Malegaon took breath of relief that they got rid
of AEC and thought MSEB would do something good for their industry.
But it proved to be a dream only. When MSEB came started to work actually
it was disclosed that previous supplier was better than the present one. The
drambacks of the MSEB are given below which are observed over 25 years service
in supply of electricity to Malegaon. 7
i) In MSEB, without taking bribe the technicians do not remove the faults
of the individual consumers. Otherwise the faults are repaired after a day
or two when complaint is lodged in the office.
ii) Repeated failure of power is common practice of MSEB.
iii) Several bill collection offices were there for the convenience of the
consumers. MSEB stopped the practice and started collection through the
banks on contract basis by paying them commission. At present the bill is
collected by NDCC Bank. It is the wastage of time and money.
iv) The head office was in the heart of the city at Old Agra Road, but MSEB
transferred its office to Moti Bhawan behind the State Bank. For a minor
and simple mistakes the consumers have to suffer alot.
v) Meter reading, calculation, distribution and collection of bills were done
monthly. The system was easier, suitable and convenient for the small
powerloom owners as well as labourer community and domestic users,
On the contrary, the MSEB adopted the policy of two months billing. A
long and lengthy procedure was followed which created several
problems.
vi) MSEB never supplies voltage of 460 volts. The low voltage of 200 to 300
damages the powerloom motors, tube lights, T. V. tubes Computers, etc.
The low voltage creates several problems in the city.
vii) Wrong reading of meter and miscalculation of charges is a common
practice. A poor hutment was charged Rs. 70000/- for two months. In
such cases complaint could be filed only after the payment of the bill.
How is it possible a hutment dweller to pay such a huge amount?
viii) In the name of load shedding the electricity is discontinued every Friday
from 6 a.m. to 10 p.m. since March 2000. The discontinuation of 16
hours had created several problems.
ix) In discontinuation of supply of the electricity communal attitude played a
crucial role in the workers of MSEB. In Sangmeshwar, Sapati Bazar and
Camp area electricity is supplied throughout the day.
x) The farmers are provided electricity at concessional rate. Inspite of it, the
farmers do not pay their bills. At any natural disasters such as heavy rain,
no rain, flood, bad weather, cyclones and crop ruin the bills are called
off. The cloth production is one of the basic needs but powerloom owners
are charged double and the bill is collected at will, otherwise the supply
is disconnected. Due to the dual policy of the Government the electricity
board is always in loss of crores of rupees.
In March 1999, the Government of Maharashtra announced several facilities
to the farmers. Their 50% arrears were called off if they paid their bills. First April
1999. The farmers were to get electricity at half the rate. From the power and
energy minister disclosed that the bill to be received stood at Rs. 50 crores from 11
lakh farmers. The farmers were to get facility according to the table given below. 8
Table No. 6.11
No. Particulars Old Rate Proposed Rate
1
2
3
4
3 Horse power motor pump
3 H.P. to 5 H.P.
7.5 H.P. to Motor pump
More than 7.5 H.P.
Rs. 500
Rs. 500
Rs. 750
Rs. 1000
Rs. 250
Rs. 400
Rs. 600
Rs. 7000
Despite of 50% concession, if the farmers did not pay their bills still their
supply was continued.
xi) The Government was advised by Electricity commission in respect of
overtime duty of the employees. In all, one lakh 11 thousand employees
were working in the State. These employees received Rs. 80 crore as
overtime. The amount was more than any other state of the country. 13%
of the total amount was spent on their payments and other facilities. The
employees used to keep the work pending during duty hours and then
they recorded their extra work as overtime.
xii) A new format was enforced over domestic, non-domestic and industrial
users of electricity in the name of Security Deposit. Every consumer had
to pay an average amount of three months bill as a security deposit. The
three month’s bill would remain with MSEB as S.D. Ten years ago it was
only Rs. 50. Then it increased up to Rs. 300 per horse power. Such steps
proved bankruptcy of the MSEB. The loss of MSEB was collected by
various means. Obviously, the Maharashtra Government was like an
enemy of powerloom industry.
ELECTRIC ARREARS ON POWERLOOM INDUSTRY IN MALEGAON :
Due to continuous crisis at all powerloom centres in Maharashtra, the
Government decided to give 55% concession in electric bills of powerloom
owners. But the matter became controversial between ruling parties and opposition
(BJP, Shivsena) parties. The opposition parties and MSEB severely opposed the
decision. It locked more communal than political parties. In March 1999 a proposal
of 50% exemption was not accepted by the opposition and now by the ruling party.
It was proposed by then ruling party Shivsena B.J.P. combine. So, it was not
possible for them to accept the proposal for powerloom owners who are generally
Muslims. Almost 80% Muslims are working in powerloom industry. It was a
matter of Rs. 80 crore. Fifty five percent exemption means Rs. 45 crores. After the
independence, the Government of Maharashtra exempted the farmers of paying
electricity bills several times. Almost the same amount has been received by the
corrupt and dishonest employees and officers of MSEB as bribe. Two years ago,
the communal leaders exempted 200 crore rupees of electric bill of a co-operative
Sugar factory in Dist. Ahmednagar. Due to this exemption the chief of that sugar
factory resigned from Congress Party and joined Shivsena. It is a significant
example of immorality of politicians of India. To strengthen their political power
they destroy the nation.
In May 1999, the Minister of Power and Energy disclosed that, the
electricity was stolen by four lakh farmers with “Ankdi” Due to this ill practice
transformers are destroyed. It was also accepted that it is very difficult to control it.
It is a fact that 60% farmers steal electricity.
To collect the bills of Rs. 1600 crores from farmers the Maharashtra
Government wasted of Rs. 50 crores on campaign of advertisement. The scheme
failed badly.
It seemed that govt. was only for the farmers. The farmers were exempted
from paying bills, inspite of stealing electricity, no action was taken against them.
Despite of non-payment, their electricity supply was continued. Besides these, they
were provided several facilities and given preference in all walks of life by the
Government. On the other hand as regards powerloom industry, the behaviour of
Maharashtra Government is just like step mother.
Ashok Basak, the chairman of MSEB, opposed the 55% exemption to
powerloom owners, though it was accepted by him that the record of powerloom
owners from Malegaon was better than other powerloom centres. Some more facts
and figures provided by the head of MSEB of Nashik Division are given below.
The facts are given as on 1st January 2000.
Table No. 6.12
i)
ii)
iii)
iv)
v)
Number of powerlooms
Number of powerloom sheds
bills are given by meter system on which
10,436 K.V. load is supplied.
The electric load supplied for powerlooms
Electric bill due on 1st January 2000 in Electric
bill due only on powerloom.
66,541
5,595
1,292
48380 K.V.
13 crore 60 lakh Rs.
6 crores 15 lakh Rs.
vi) Electric bill due only on powerloom Out of Rs. 6 crores 15 lakhs two crores
forty lakhs rupees are blocked due to court matter. The original amount to be
received is only Rs. 3 crores 75 lakhs from 519 powerloom owners.
vii) Number of cases in court are 438
viii) Most of the matters are related to, overload, wrong meter reading and wrong
calculation of the bill.
ix) Monthly income from Malegaon powerloom owners is Rs. One crore 12
lakh rupees out of which 80% is permanent.
x) Bills of Rs 2.50 crores are due on business organizations, and shops offices
xi) Some powerloom owners delay payment of electricity bill is because of
wrong entry, penalty of overload, short duration of payment, improper
facilities in banks etc.
xii) Domestic bill of Rs. 4.5 crore is due. Taking into consideration the facts and
figures the 55% exemption (Proposed) shows no advantage for powerloom
owners of Malegaon. 9
Source : Shamnama Daily, Malegaon dt. 10/2/2000
It is assumed that the MSEB has adopted the policy to give the concession
up to September end in the electric bill exemption scheme. The officers from
MSEB put pressure and gave warning for discontinuation of electricity which
resulted in powerloom owners selling their lands and valuables and properties to
pay their bills.
A CRUEL STEP OF MSEB (2000) :
The powerloom owners from all the centres of Maharashtra such as
Ichalkaranji, Dhule, Solapur, Bhiwandi and Malegaon were protesting against the
fixed rate of Rs. 180/- per loom per month. Meanwhile the MSEB imposed the
new tariff of electric charges in the State from June 2000. In all the categories the
charges were doubled. The charges to be received would be Rs. 320 for general
motive power while the flat rate of powerloom Rs. 300/- per month. The domestic,
non-domestic and agricultural categories were also subjected to the new tariff of
electric charges.
The summary of HT tariff for 2000 is given below which has came into
practice from 1st June 2000.
11
Summary of LT Tariff for the year 2000-01
Table No. 6.13
Proposed Category of
Consumers
Demand Charge (Rs/KVA/month)
Rs/HP/month
Energy
Charge Ps/U
Domestic (LD 1)
0 – 30 Units Rs. 20 per service connection for single phase.
Rs. 50 per service connection for three phase.
Additional Fixed charges of Rs. 50 per 10 KW.
Load of part thereof above 10 KW load shall be
payable.
75
31 – 100 Units 250
101 – 300 Units 300
Above 300 Units 460
Non Domestic (LD 2)
0 – 100 Units Rs. 50 per service connection for single phase.
Rs. 100 per service connection for three phase.
Additional Fixed charges of Rs. 100 per 10 KW.
Load of part thereof above 10 KW load shall be
payable.
250
101 – 200 Units 460
Above 200 Units 600
General Motive Power (LTP-G)
0 – 300 Units Rs. 60 per HP per month.
Optional MD based tariff will be available at
Rs. 220 KV per month
210
301 – 1000 Units 280
1001 – 15000 Units 320
15001 – above Units (only
balance units) 160
Powerloom Flat Rate 300 0
Public Water Supply
Urban P. W. Schemes
For Connected Load 0 - ??? HP 40 200
For Connected Load 0 - ??? HP 40 300
Rural P. W. Schemes
Flat Rate Tariff(RS/HP/month)
Grampanchayat 88 0
‘C’ class Municipal Council 116 0
Metered Tariff 20 100
Summary of HT Tariff for the year 2000-01 11
Table No. 6.14
Proposed Category of Consumers
Demand Charge
(Rs/KVA/month)
Rs/HP/month
Energy Charge
Ps/U
HTP – I (Industrial – BMR/PMR) Base Tariff 300 335
TOD Tariff
2200 hrs. – 0600 hrs. 0 50
0600 hrs. – 0900 hrs. 0 0
0900 hrs. – 1200 hrs. 0 30
1200 hrs. – 1800 hrs. 0 0
1800 hrs. – 2200 hrs. 0 60
HTP – II (Industrial – Other) Base Tariff 280 325
TOD Tariff
2200 hrs. – 0600 hrs. 0 50
0600 hrs. – 0900 hrs. 0 0
0900 hrs. – 1200 hrs. 0 30
1200 hrs. – 1800 hrs. 0 0
1800 hrs. – 2200 hrs. 0 60
HTP – III (PWW-BMR/PMR) 300 350
HTP – IV (PWW-Others) 220 320
HTP – V (Railway Traction) 0 420
HTP – VI
Residential Complex 180 200
Commercial Complex 180 300
HTP VII (Agricultural)
Flat Rate Tariff (Rs/HP/month)*** 117 0
Metered Tariff 20 120
HTP VIII Poultry Layers & Boilers 180 120
HTP IX (???) 600 330
SP – I Agri (HT/LT) High Tech, Cold Storage 180 200
Mula Pravara Electric Co-op. Soc. 0 120
Inter State Sale 0 260
Note : (*** : Flat rate tariff shall be applicable till the time ?????? are installed.
FCA shall be applicable to all categories of consumers. The methodology for charging FCA shall be
determined by the Commission on a quarterly basis.)
(Supplied by Shri Mujeeb Momin, member of all India Textile Board.)
PUBLIC REACTIONS :
Really speaking it was a cruel step taken towards powerloom owners in
Maharashtra. It was impossible for owners to pay of fixed rate of Rs. 180/-. The
powerloom industry was already in crisis due to costly yarn and improper supply
of electricity. Most of the powerlooms were locked in Bhiwandi. Few cases of
suicide of powerloom owners occurred in Bhiwandi and Ichalkaranji due to this
crisis.
At first, the powerloom owners from Ichalkaranji opposed the proposal of
new tariff. Then the owners from Bhiwandi came into arena. In the second week of
June, the powerloom owners of Malegaon and Dhule opposed it. The Powerloom
Protection Committee of Malegaon called a meeting in order to protest against the
tariff unitedly (11 -6-2000). Not only powerloom owners, but the people from all
walks of life also responded to the call. In the meeting it was analyzed by Shri
Nehal Ahmed that, the Government of Maharashtra had ceased the concession to
the powerloom owners since 1992. Due to this policy, the existence powerloom
industry was endangered. The National Region Company paid the power bill of Rs.
1.40 crore monthly and did not oppose the tariff because it earned profit. On the
contrary the powerloom industry was already in loss, hence it was not possible for
it to bear such heavy burden of monthly power tariff of Rs. 320 per powerloom.
The board was formed by the Government but the policy was not formed. That was
the reason, the Board imposed the tariff as per their will. At present not only the
powerloom owners but farmers and domestic users of electricity also are in trouble.
12
A decision has been taken by the Government of Maharashtra make the
electricity board private and divide it into three parts. As a result, fifty thousands of
employees would be jobless. It was shocking announcement by the Chief Minister
of Maharashtra. The powerloom owners of Dhule, Bhiwandi and Malegaon were to
start a movement against charge of Rs. 320. In Malegaon it was decided, instead of
paying bill, it would be returned with application.
In protest of increased tariff "Malegaon Bandh" was observed on 10th July
2000 by the people. The communal minded parties opposed it. Actually it was not
the problem of powerloom only but also of all the citizens of Malegaon. That's why
one day earlier in a public meeting at Quidwai Road, nearly 70 thousand people
were present. The protest was remarkable and historical as well.
On the other hand, the sitting MLA Shri Shaikh Rasheed of Malegaon
formed powerloom Udyoug Bachao Samiti. He opposed the movement of
powerloom action committee only because it was led by Nihal Ahmed former
MLA of Janata Dal (S). Thus, the matter became disputable. But the people did not
respond/to Udyog Samiti. It tried to get the political advantage for Congress MLA.
After several agitations, 12 MLAs from all powerloom centres staged protest
in the Assembly. The following decisions were taken in the meeting of Chief
Minister with the MLAs.
i) The decision of 55% concession on 13th January 2000 will be continued.
ii) The remaining amount of 45% will be paid in three installments.
iii) The powerloom which are not working Rs. 30/- should be charged.
iv) The charges of capacitor shall not be taken.
v) Over load penalty shall not be charged.
In respect of above decision it was a stay on the “regulatory commission”.
The Government planned to go to court against the commission too. It is because
almost 32 petitions were already admitted in the High Court against Regulatory
Commission, by various organizations of powerloom centres.
Source : Shamnama Daily, Malegaon dt. 20-7-2000
STRIKE OF ELECTRIC EMPLOYEES :
The problem of increased rate by Regulatory Commission was a burning
matter. In course of time the fourteen employees unions of MSEB from all over
Maharashtra gave a notice of unlimited strike on the subject of division of the
electricity board and privatization of electricity in the State. Almost one lakh
eleven thousand employees took part in the strike from 25th
July 2000. Due to this
strike the electricity problem has turned so serious that what would happen the next
moment in the State, could not be predicted. The Government of Maharashtra was
helpless. 15
TRANSPORTATION :
INTRODUCTION:
For flourishing of any industry transportation is one of the important factors.
For easy and quick transportation, there must be good roads connected to the
market centres, for the transportation of prepared goods as well as to carry the raw
materials at the industrial place.
LOCATION OF MALEGAON :
Malegaon is located 108.63 km away from Nasik city to the north-east.
Dhule is another powerloom centre situated to the north-east of Malegaon.
Manmad, a railway junction of central railway is located toward the south-east at
38 kms away from Malegaon. Another railway station called Chalisgaon is located
45 kms towards south-west of Malegaon. Bombay an international place and well
known for textile industries is 300 kms away from Malegaon. The only benefit for
Malegaon is that, it is located on the Bombay-Agra Road, The new NH3 passes
from western side of Malegaon. As far as the means of transportation are
concerned, Malegaon is unlucky. The only facility is that of road, which is time
consuming for transportation.
IN THE PAST:
Since the establishment of powerloom industry in Malegaon, the facility of
transportation is not proper. In the early stage, the yarn and other raw materials
were transported only from Bombay. The coloured sarees were sold in the local
market, so there was no need of quick transportation. With the growth and
expansion of powerloom industry the requirement of yarn, colours, chemicals,
textile accessories, sizing materials and spare parts etc. required in a large quantity.
The coloured sarees were sent to Marathwada, Jalgaon, Amrawati, Kolhapur, Pune,
Bombay, Ahemednagar, Nasik and to some other parts of Karnataka, Gujrat,
Madhya Pradesh and Andhra Pradesh by railway, S.T., lorry and private carriers.
These means of transport were very expensive and time consuming. As a result the
actual users of the saree have to buy it at doubled rate than in Malegaon. It is only
because of road transport.
MODERN AGE:
After 1970 and 1990, the coloured sarees banned by the Government,
diminished slowly and, the grey cloth production increased. After 1990 the
polyester P.C. and roto took its place on the powerloom. For the grey cloth the
cotton yarn was brought from south Indian mills in the form of bags of cones on a
large scale by lorries daily. The average expenditure of transportation for one lorry
is Rs. 7 lakhs, the cloth of Malegaon becomes dearer than the cloth at other
powerloom centres. Except for road transportation there is no way to bring the yarn
from South India.
At present the polyester, roto and P.C. yarn are brought mostly from
Ahmedabad and Bombay by roadways. The expenditure of road way is dearer than
any other means.
Likewise, the finished grey cotton i.e. cambric and poplin are sent to Pali,
Balotra, Jetpur and Ahmedabad by traders through lorries. It takes two days for the
delivery of cloth. One thing is notable that, after the delivery of cloth, it is sent for
processing and bleaching in order to find out the defects. It takes two to three days.
If the goods are okay then the payments are made to the powerloom owners,
otherwise they have to wait till the decision.
As far as the lungees are concerned, they have a good local market. Still
2/3rd
of production is sent out of Malegaon by lorries. In the remote parts of the
country like Bangalore, Hyderabad, Chennai (Madras), Calcutta and Nagpur, it
takes 2 to 3 days for the delivery of lungees.
The payment is made after the delivery of goods.
MARKETING :
For a successful marketing of powerloom cloth, adequate working capital,
yarn and other raw materials in sufficient quantities at the required time, the
capacity of powerloom owners to hold on stocks in time of depression, and their
ability to study the markets and adjust the pattern of production are some of the
important factors.
Keeping this in mind marketing of Malegaon powerloom industry, the whole
industrial area is divided into four zones to cover up all types of units big and
small. Nearly 30 powerloom owners having 1000 powerlooms were consulted.
During the survey, it was noticed that the powerloom industry of Malegaon
is completely unaware of marketing organization. All the loom owners, either big
or small, sell their products on their own and face risk. There are several
co-operative societies of powerlooms. Their role is passive as far as the marketing
organizations are concerned.
METHOD OF TRANSACTION:
(a) Gujree: Since the beginning of this industry in Malegaon, when only the
coloured sarees were manufactured, the powerloom owners used to bring their
sarees on their shoulders in "Sapati Bazar" (at present it is known as Tilak Road).
Entire separate bazar is residential ‘vyapari’ place. The commission agents or
"Saree Arhat" used sit in their "Verandas" from 3.30 p.m. to 6-7 in the evening
except on Saturday which observed as holiday, and on Friday from 8 am to 10 am.
It was gathering of buyers and sellers of coloured sarees. It was called “Gujre” in
local language. 16
Generally, buyers (Vyaparees) were non-Muslim Marvadees and sellers
were Muslims. The owners showed their sarees to every vyapari. If the matter of
rate is settled down, the owner would sell and collect the "Daam" (Payment)
otherwise; the owner would proceed next vyapari and so on.
Some times the vyapari would contact the saree owners at their home and
settled the rate matter. Most of the transactions were performed in cash. Sometimes
promissory note (Hundee) was used by vyaparees.
(b) Tamba Kanta: Such a practice continued till 1980 but with the
diminishing of coloured sarees, the tradition of Gujree vanished.
With the growth of grey cotton cloth, a new tradition came into practice. The
buyers and sellers used to gather at “Tamba Kanta” the northern end of Tilak road
in the morning from 11 to 2 and in the evening from 5 to 8. Today the market itself
is called Tamba Kanta. The gathering of Tamba Kanta always creates the traffic
problems. It is a headache for the residents of the place as well as for the police
department and to common people, particularly for women, however both the
ruling and opposition parties are distressed at this gathering, but nothing can be
done in this regard.
(c) Bunkar Bazar: Taking into consideration the distress of weavers and
yarn merchants and cloth traders Seth Shabbir Ahmed, president of Malegaon
Municipal Council built a huge building at Quidwai road called Bunkar Bazar in
1980 at the cost of 40 lakh rupees.
Unfortunately the building is incomplete due to some political conflict. It
was tried to shift the market in Bunkar Bazar but the yarn merchants and cloth
traders are not ready to come here by giving some excuses.
(d) Marketing Department: During the study, it is observed that there is no
separate marketing department for purchasing the yarn and selling the prepared
cloth. However, the marketing department is compulsory for that purpose.
The general practice in Malegaon is that the senior most member of the
family who is considered an experienced person and aware of all the ups and
downs of the market, handle the marketing affairs. He buys the yarn according to
the need of his unit. He also sells the cloth in the market at some profitable rate. He
is considered supreme authority of unit,
Generally, all the transactions are made in cash. In case of coloured sarees, it
is credited for one to six months, whereas in regard to grey cloth, it is one to eight
days. Sometimes current cheques are accepted by the weavers and given back to
the yarn merchants for the payment of yarn.
METHOD OF SELLING AND PURCHASING:
The policy and method for purchasing raw material and selling the cloth is
hotchpotch. No particular rules and principles of marketing are followed. It is
because of insufficient working capital and stock of market, however, the selling
and purchasing are done together.
The demand of coloured saree increased during marriage season. (Lagan
Sarai) i.e. February to May and even in Diwali. Moreover, it is also demanded
regularly from January to May. The remaining period is observed as slack in
market. The main brands of coloured sarees are, Irkal, Jar Jamin (golden thread
used in the border), silver (white silk used in the border), Mangla, pinpin, Bootee,
(Bootee are woven in the body of Saree) etc. Sarees are generally known by their
borders. These are sent to Pune, Kolhapur, Ahemednagar, Nizamabad, to some
parts of Karnataka, the entire Jalgaon district and neighbouring villages through
the commission agents of Malegaon.
Popline, Combrick, Polyesters and rotto cloth are some of the popular grey
cloth. These are sent to Bombay, Ahmedabad, Pali, Jaipur and Mathura through the
agents.
Really speaking, the weavers of Malegaon do not plan for the production,
purchasing and selling of goods. The whole industry runs on their own risk and
conditions or situation of the market. The weavers are not fully aware of the ups
and downs of the market. Apart from this, they do not stock raw materials for a
month or two. They are not able to stock the prepared cloth due to insufficient
capacity or scarcity of capital. As a result, they are repeatedly exploited by the yarn
traders, commission agents and cloth merchants.
It is observed that, during the slack period the cloth traders buy the cloth
from the weavers at lower rate which could not cover even the cost of production.
The weavers are not able to stock their produce. The capitalists stock such
products and sells them during the boom period and earn a handsome profit on it.
From above study, it is evident that the weavers of Malegaon do not pay
attention towards the marketing department. They do not think of forming union or
any organizations or cooperative society or consumers’ society of their own.
The powerloom owners were not in position to appoint a person to look after
marketing due to the fear of rising cost of production.
PREPARATION FOR MARKET :
(a) Trade Mark and Brand:
(i) Coloured Sarees: A large number of varieties of cloth are manufactured
in Malegaon. For identification and packaging, cover etc. are necessary. For the
attraction of the customers, the appearance of the product is more important. The
majority of small units, having one to four or six powerlooms, manufacture
coloured sarees. During the survey it was noted that, they do not use any
trademark, label and brand for their sarees, because they have not enough money
and urge.
In contrast to the small unit weavers, there are some big powerloom owners
having ten to twenty or forty looms, who are careful about their identify. They use
their own trademark and brand. To avoid the duplication, they use rubber stamp
with non-washable (Dhobi ink) ink on the face of the sarees. Colorful and
attractive labels are pasted. For the safe-guard and attraction multi coloured covers
are used. These sarees are named as Shakuntala Patal, Apna Desh, Naagchhap
Patal, Naurang sariyan, Raj Hans Patal, Blue Bird etc.
Some used figures like 62 number, A-1 Patal, 786 Patal etc. Some of the
owners are popular and their names are associated with their brands like Abdul
Hameed Navrang, Ayyub Shakuntala, Abdul Rahman 62 Number, Mustafa
Nagwala etc.
This is not only name but there is also guarantee of quality, fast colour,
durability and superiority of reed, picks and yarn, width and length of nine yards.
Hence, there is permanent demand from the customers. So, ultimately it helps to
develop good will and reputation in the market.
On the basis of goodwill and standard, they issue price list of their products,
in the market every week. There is no haggling about the price. The commission
agents have to buy according to the price list. The prices are changed with the
fluctuation of raw material and sundry expenses. During the slack market a minor
reduction is made in the price list by the owners. Of course there is monopoly of
powerloom owners in the market. All this is because of their capacity to stock raw
material as well as finished goods for more than six months. Their honesty, ability,
standard and manner of business and behaviour play a vital role in building their
market.
(ii) Grey Cloth: As for the grey cotton cloth, rotto, polyester and P.C. etc.
there are exception for Trade mark or brand like the coloured sarees. Label
coverings or warper etc. are not used due to unfinished and unprocessed cloth,
which is sent to the wholesaler in Bombay, Ahmedabad, Firozpur, Jetpur, Pali and
Balotra through the commission agents of Malegaon. After bleaching, calendaring
and processing, printed sarees are made. From the cambric cotton cloth printed bed
sheet, Pillow cover, Razai covers and curtains are made.
For developing individuality and standard, rubber stamp or screen is used for
Trademark, on the outer edge of the “Takha” (lump).
(In local language, lump is called ‘Takha’ which is in length of 100 meters).
Leader, Rupali, Metro, Sagar, Laxmi, Taj and Blue star are some popular names in
the market which have developed their good will. These products are sold on their
names because of their standard of yarn, pick, reed, width and length. Generally,
cloth is sold at per meter rate. At a time, contracts are made for more than five
‘Ganth’. (In local language Bale is called Ganth.). One bale is consisted of 15 to 18
lumps. i.e. 1500 meters to 1800 meters. For costing per meter rate, the formula is
used;
warpofweightYarnofCount
LumpofLenghthYarn
Formula =
÷
×
=
1850
weftofWeightCount1850
PickWidthLumpLength====
××××
××××××××
Generally, the rate of per meter cloth depends upon the fluctuated price of
yarn, so does the price of cloth. It is just like barometer or stock exchange. The
political changes at State or The Central levels affect the price of yarn and cloth.
The market becomes very dull and cast down before and after the budget of the
country and during the rainy season. In other words we can say that the yarn price
rules the cloth rate. Reverse the case of coloured sarees. The price of saree is in the
hands of powerloom owners. In the case of grey cloth the powerloom owner
dependent on the yarn merchants and cloth traders.
Big powerloom owners have 20 to 100 or 200 looms in different sheds while
small powerloom owners have only 10 or 20 looms. In the grey cloth market the
small units are insignificant. The big unit holder gets cloth from the small units.
Most of the transactions are made on credit for 8 to 10 days and during
depression period of credit extends to 15 to 30 days.
(iii) Lungi: Another variety of cloth is lungi which is manufactured at
present on 400 to 600 powerlooms. Generally, polyester, cotton and mercerized
lungies are prepared.
In cotton, Guide, Gulshan, Kranti, Navjeevan, Hafeez and Diamond etc are
well known Trade marks. By using mercerized yarn; lungees are produced only by
Guide and Chaar Minar Trademarks. The lungee weavers use their own brand trade
mark, label, rubber stamp and printed plastic bags to avoid the duplication. These
are produced in fine, medium and superfine qualities.
In Malegaon, Muslims being in majority 2/3rd
production is sold in
Malegaon directly or through the retail shop owners. Remaining production is sent
out of Malegaon to such places as Bombay, Bhiwandi, Hyderabad, Bangalore,
Madras, Nagpur, Kolkata and to neighbouring cities like Satana, Nasik, Dhule,
Aurangabad etc. The lungi production is not so much affected by price
fluctuations, price, so lungee weavers enjoy good profit.
NO REGISTRATION:
During the survey it was found that the powerloom owners do not register
their trademark or brand with the Government. It would add to cost and also the
duplicator would escape by makeing a minor difference in the yarn, border and
body of the cloth.
The next reason for non-registration is that the powerloom owners do not
want to involve themselves into anxiety of government's sales tax, income tax and
registration fees. Without taking care of the rules and regulation of the market, they
run their business successfully .Of course it seems surprising.
(ii) Advertisement: In the marketing aspects, advertisement has taken an
important place to attract the consumers. Due to the local market and buyers being
inter-mediator and commission agents, the weavers of Malegaon do not pay heed
to this factor. One or two weavers took initiative in advertisement by showing their
products in the cinema halls, through slides. As it was costly, so that they could not
bear the financial burden. The matter of advertisement is completely neglected in
Malegaon textile industry. One thing is notable that the weavers of Malegaon run
the business by using simple method. It is concluded that their products are
cheaper than mill sector and handloom sector and superior in quality and
durability. Hence wholesalers and traders prefer the product of Malegaon.
SALES PROMOTION METHOD:
This is the age of modern techniques like computer and network system. By
using them sales are increased and a handsome profit can be gained. There are so
many ways and means to attract the consumers. In this aspect too, weavers of
Malegaon are unaware. For the long period, reducing pick, reed, length and width
and during depression, selling at reasonably cheaper rates are some factors which
can keep the market alive. During the depression the weavers helplessly sell the
product in loss. This repeated loss leads them to bankruptcy and they vanish from
the market.
Apart from this, the powerloom owners are not sincere in the sales
promotion method. There is nobody to guide them.
The grey cloth manufacturers sell their unfinished goods, so they do not take
any step in the matter of advertisement. Very little amount of money is spent for
their trademark, names, and labels. The lump, which is called “Takha” in the local
language of Malegaon, is folded and brand name, reed, pick, weight and length are
printed or screened in attractive colours. Of course, these are not the part and
parcel of advertisement. In other words it can be said that the aspect of
advertisement is almost nil.
Though the weavers know the importance of advertisement, they do not take
any initiative in this aspect. During the discussion, it is noticed that, selling of
unfinished product, selling to the inter-mediators, lack of funds, and interest, the
money spent is not covered in the cost. Hence weavers don’t turn to advertisement.
For the attraction, popularization and more selling with handsome margin,
the weavers should sell their finished goods, directly to the wholesaler and
retailers. The weavers should form organization in this regard, in order to
overcome the market risks. By this step automatically the inter-mediators will be
kept away from the market. In this way the weavers should escape from the
exploitation by the brokers and they would gain handsome profit which is snatched
away the brokers.
Table Shows the Product of “Coloured Sarees” In Various Areas
(Market) Demanded. 17
Table No. 6.15
Quality of
the product
regar-ding
the border
Count
of
Yarn
Used
Rate of
per
Saree of
8.23 mts.
Nature
of the
Custome
r
Area in which the
coloured sarees or the
market of the product.
Silver and 60
s x
60s
Rs. 190/- Poor Ahemadnagar,
Pune, Sharda
Golden
(Silk
80 s x
80s
Rs. 220/-
Rs. 250/-
Middle
Middle
Aurangabad, Paithan,
Kolhapur, Sangli,
Border) 100 s x
100s
Satara,
Zari
60 s x
60s
80 s x
80s
100 s x
100s
Rs. 175/-
Rs. 195/-
Rs. 230/-
Poor
Middle
Middle
Aurangabad, Jalna,
Nizamabad (Karnataka)
Parbhani, Navapur,
Surat etc.
Kasab
Twisted
Of Zar &
Silk
60 s x
60s
80 s x
80s
100 s x
100s
Rs. 210/-
Rs. 235/-
Rs. 260/-
Middle
Middle
Middle
Nasik, Bombay, Jalna,
Marathwada, Navapur
Aurangabad,Nizamabad,
Karnataka etc.
Bootic
embroidery
in the body
with silk
border
60 s x
60s
80 s x
80s
100 s x
100s
Rs. 210/-
Rs. 240/-
Rs. 270/-
Middle
Middle
Middle
In all areas mentioned
above.
Table Shows the Product of Grey “Cotton Cloth”
in the areas demanded (Market) 18
Table No. 6.16
Name &
Type of
Grey
Cloth
Count of
Yarn used
Warp &
Weft
Reed and
Pick Rate of
Cloth
Per Metre
Area or market in
which the product
are
demanded or used.
R
E
E
D
P
I
C
K
W
I
D
TH
Cambrick
42 – 36
42 – 36
42 – 36
42 – 36
38 – 36
38 – 36
44
38
38
38
52
52
42
34
34
34
48
48
43
43
44
45
47
47
6.90 –
6.95
5.90 – 5.-
95
6.10 –
6.15
6.25
9.50
9.30
Mumbai
Ahemadnagar
Pali
Balotra
Calcutta etc.
Popline
38 – 34
38 – 34
38 – 34
38 – 34
38 – 34
27 – 24
60
60
70
70
78
78
48
48
48
48
48
48
38
38
38
39
38
39
8.50 –
8.55
8.60 –
8.70
9.15 –
9.20
9.60 –
9.70
9.80
10.6 - 10.6
Mumbai
Ahemadabad
Pali
Balotra
Calcutta etc.
P.C.
64.56
60.52
66.66
70.70
43
43
46
46
9.30
8.30
10.70
11.70
----- do -----
OCTROI :
Importance: Octroi is the main source of income for Malegaon Municipal
Council. On one hand, it is a benefit for the MMC, on the other hand it is for the
progress and development of powerloom industry in Malegaon. No doubt, the
entire development projects like health and sanitation, education, streets-lights,
water supply, road and salaries of their employees are covered in the Municipal
budget. Of course the municipal council is fully responsible for the development of
the city as well as to take care of public. In this business of MMC, the income from
octroi, plays an important role. At present the octroi has got so much importance
that all the political activities of Malegaon revolve around it. This activity has put
back the powerloom industry. In fact, the existence and life of Malegaon entirely
depends on powerloom industry. Seventy percent population of Malegaon is
dependant on the powerloom directly or indirectly. In other words, the industry
provides the whole population their livelihood. Despite the industry itself does not get
any benefit from Octroi.
It is observed that the Malegaon Municipal Council gets 40% to 50% of its
total income from octroi. Out of total octroi 75% are collected from powerloom
industry directly, or indirectly.
Table shows the octroi of Malegaon Municipal Council from powerloom
industry.
Table No. 6.17
Income of MMC from Octroi on powerloom items 20
Sr.
No. Year
Yarn=Cotton
Polyster Rs.
Powerloom
Spare Parts
Rs.
Sizing consum-
ables Rs.
1
2
3
4
5
6
7
1991 – 92
1992 – 93
1993 – 94
1994 – 95
1995 – 96
1996 – 97
1997 – 98
4,91,32,016/-
5,61,79,965/-
6,69,59,124/-
7,84,10,282/-
7,79,74,971/-
6,61,74,452/-
7,01,48,451/-
2,01,115/-
2,31,992/-
2,61,620/-
3,79,226/-
3,98,119/-
4,65,715/-
3,63,305/-
2,03,921/-
2,25,905/-
2,20,634/-
3,16,125/-
3,27,108/-
3,60,417/-
4,41,523/-
The following table shows the octroi from powerloom industry out of Total
Octroi with comparing the total budget of the MMC. 20
Table No. 6.18
Year Total
Octroi
Octroi from
Powerloom
Industry
Percen-
tage Total Budget
1991 – 92
1992 – 93
1993 – 94
1994 – 95
1995 – 96
1996 – 97
1997 – 98
1998 – 99
1999 – 2000
6,55,09,355/-
8,02,59,094/-
8,92,78,330/-
10,89,03,175/-
10,69,15,038/-
8,82,36,603/-
9,55,10,395/-
12,85,90,123/-
4,95,37,142/-
5,66,37,862/-
6,74,41,378/-
7,91,05,633/-
7,87,00,198/-
6,70,00,584/-
7,09,53,279/-
75.62
70.57
75.54
72.64
73.61
75.93
75.84
15,95,24,336/-
18,41,63,674/-
18,22,59,784/-
16,82,49,774/-
20,50,67,774/-
20,86,62,923/-
23,08,24,282/-
23,59,43,473/-
COMPARATIVE STUDY OF OCTROI OF DIFFERENT
MUNICIPALITIES:
At present there are 228 municipalities in Maharashtra State including
Malegaon Municipal Council. The Malegaon municipal council is ranked 2nd
comparing its budget to Bhiwandi which has the first position. No doubt, these two
places are the powerloom centres. 40 to 60 percent income is received thorough
octroi on yarn and items related to the powerloom industry. In Malegaon at present
Rs. 1.80% is levied on yarn by the municipal council. An average daily collection
is Rs. 3 to 4 lakhs in which 40 to 60% is through powerloom related items. In
1998-99, the octroi collection was allotted to Anas Enterprises of Mehsana
(Gujarat) on contract basis from 10th
June 1998 to 10th March 1999.
According to contract, the Anas Enterprises was bound to pay rupees one
crore eight lakhs monthly to MMC. It was the 60% of the total budget. Before the
contract, the octroi collection by MMC, was very low due to “Alter” i.e. (octroi
stealing). Compared to other municipal councils, the Malegaon Municipal Council
gets much more octroi.
Table shows the octroi of 9 municipalities in Nasik District. 21
Table No. 6.19
No. Municipalities in Dist. Nasik Collection of Octroi
1
2
3
4
5
6
7
8
9
Malegaon
Manmad
Satana
Yeola
Sinner
Igatpuri
Bhagur
Trimbkeshwar
Nandgaon
Rs. 14 – 0 Crores
Rs. 1 - 50 Lakhs
Rs. 1 - 60 Lakhs
Rs. 0.96 Lakhs
Rs. 0.86 Lakhs
Rs. 0.44 Lakhs
Rs. 0 - 2 Lakhs
Rs. 0 - 15 Lakhs
Rs. 0.42 Lakhs
Before the contract of Anas Enterprises, the octroi collection had hardly
reached to one crore.
It was only 60 to 80 lakh rupees per month. The following reasons affected
the low collection of octroi.
a) Alter
b) Insignificant number of employees
c) Political interference of Municipal Councilor
d) Bribes
(a) Alter (Stealing of Octroi) :
To know, how octroi affected the powerloom industry it is necessary to
understand the term "Alter".
In the local language octroi stealing is called “Alter” the doer of alter is
called “Alterbaaz”. The definition of alter is that a yarn merchant carries a loaded
lorry with yarn bags worth of Rs. one lakh. That lorry is always kept outside of
Malegaon municipal area. The yarn merchant has to pay legally Rs. 1.80% octroi
on yarn. For one lakh, he has to pay Rs. 1800=00. There are such groups in
Malegaon which take the responsibility for delivering the yarn bags to the
powerloom owners at half the payment. Such parties are involved in antisocial
activities or “Gundagiri”. They always carry weapons like sword, choppers,
hockey sticks, iron bars. Nobody dares to stop them from this illegal business.
With the help of Municipal Councilor’s employees and even police, the goods are
delivered at the right places. After the delivery the payment of Rs. 900/- is
collected from the yarn merchant. In this way municipal council is deprived of
octroi, while yarn merchant gets benefit of Rs. 900.
Before the contract of Anas Enterprises there were three or four groups in
the city who were busy in such illegal business. It is estimated that sum of almost
one lakh rupees was earned by each group daily. Thus, Municipal council loses 25
to 30 lakh rupees per month. Sometimes there were gang wars among these groups
of Gundas. With this illegal money these Gundas lead a a luxurious life.
So, it is clear that yarn merchant saves a handsome amount on the yarns and
so also the powerloom owners. Ultimately, a powerloom cloth is cheaper than the
cloth manufactured by octroi paid yarn.
This is the reason, why octroi collection was allotted to Anas Enterprises on
contract basis for 10 months for one crore eight lakh rupees per month.
(b) Insignificant Number of Employees :
On 10th
June 1998, the octroi collection was allotted to Anas Enterprises for
10 months on contract basis. 350 employees were appointed for collection of octroi
by the company. Whereas only 150 employees were working in octroi department
of municipal council. Due to this insignificant number of employees by municipal
council, the octroi collection decreased. With the growth, development and
expansion of the city the employees were not increased so as to cover-up the whole
city in order to keep watch on stealing the amount of octroi. Apart from this the
employees were afraid of their lives from Gundas. Servants were corrupt and took
bribes from the people. Compared to municipal council, the Anas Enterprises
appointed 350 employees and four patrolling jeeps with several inspectors. Due to
sufficient employees, the company succeeded in its efforts to reach the target of
more than one crore eight lakhs monthly. It proves the inability of municipal
council in collection of octroi.
(c) Political Interference of Municipal Councillors:
As in proceeding lines it is clear that there was a lot of money in the octroi
department, so the employees became corrupt by helping the businessmen in
general and yarn merchants in particular. The municipal councillors also were
involved in this illegal business. With the help of municipal employees, the
municipal members started "Alteration" This illegal wealth created selfishness and
welfare of the people was forgotten. There was only purpose to collect more and
more money for the municipal members. That is the reason why every candidate
spends more than one lakh rupees during the municipal election. The situation
becomes worst during the election of president. The candidate for the president
spends more than Rs./ 40 to 50 lakhs. Each and every member collects almost one
lakh rupees. After the election, president of municipal council collects the
commission from every contract and particularly from the octroi department and
the businessmen.
Therefore, whenever a person or material with unpaid octroi was captured
by the employees, the political pressure from these members and the president
forced them to let him leave and the material unseized. Later on the illegal octroi
was collected by the member.
(d) Bribes :
In this business, the police was also involved. The police department did not
pay need to the octroi evaders. When the members of alter group attacked some
municipal employees, the police department neglected the matter because it was
bribed.
ABOLITION OF OCTROI:
It was a long standing demand of the Truck Owners Association of
Maharashtra and Maharashtra Transport Association to abolish the octroi, due to
harassments by the municipal employees at the toll centres on the outskirts of the
city.
At these centres, the truck owners had to wait for a longtime. It was only the
wastage of time and money. For their demand All India strikes were observed
several times. Sometimes octroi was received double and triple times on the same
goods. No argument against this practice was accepted otherwise the goods were
seized. In this way both the parties suffered a lot.
Almost the entire business community and the Vyapari Association of
Maharashtra protested against the octroi by sending deputation, strikes and
observation of "Bandh" etc.
The Indian Taxation Committee reported that, "the octroi is the bag of sin
and corruption." After 1925 almost 25 committees favoured octroi.
After a hard pressure of Maharashtra Transport Association and Vyapari
Association and a long discussion in the cabinet, the Government of Maharashtra
(Shivsena + BJP) decided to abolish the octroi from 1st May 1999. By this decision
228 Municipal councils were to suffer. By the abolition of octroi the Government
agreed to give an alternate amount to all the 228 municipalities. The Malegaon
municipality will get one crore fourteen lakhs every month.
(e) Effect of Decision :
It was a very good decision for the businessmen, lorry owners and
powerloom owners in Malegaon as well as for other powerloom centres like
Bhiwandi, Sholapur, Ichalkaranji and Dhule. Powerloom owners thanked the
Government for abolition of octroi.
But on the other hand particularly in Malegaon some of the municipal
members, municipal employees, and alter groups were very much worried.
The Union of Municipal employees severely opposed the decision and
threatened the government to launch an agitation. In Malegaon on 30th
April 1999,
all the total collection centres were shut down. 150 municipal employees who were
working in the octroi department, were transferred to some other departments. In
the month of April only Rs. 90 lakhs were collected as octroi.
Of course, it was a favourable step by the Government for powerloom
owners. The delivery of yarn began without any delay. Moreover 1.80% octroi was
saved and the cloth of Malegaon became more cheaper than earlier. The
powerloom owners got rid of many problems related with octroi.
REFERENCE
1. Powerloom Enquiry Committee Report, 1964
Ministry of Textile and Commerce,
Government of India Publication, New Delhi
Page No. 31
2. Ibid. Page No. 89
3. Awami Awaz, Weekly, Malegaon dt. 16-03-1964
4. Government of India publication, New Delhi
Ministry of Commerce and Textile
Notification No. 29, New Delhi.
5. Powerloom Enquiry Committee Report, 1964
Ministry of Textile and Commerce,
Government of India Publication, New Delhi
Page No. 123
6. Summary of HT Tariff for the year. 2000-2001, Bombay,
Page No. 8, 10
7. Shamnama Daily 1990
8. According to the report of MSEB Malegaon
9. Ibid
10. According to the report of Mahavitaran Committee of
MSEB 2000
11. Ibid.
12. Ibid.
13. Report of Commission MSEB 2000
14. Ibid.
15. Ibid.
16. Dr. P. C. Pardeshi,
Marketing Management,
Nirali Publication, Pune
June 1998
Page No. 216
17. According the survey report from weavers of Malegaon
18. Ibid.
19. Ibid.
20. According to the report of Malegaon Municipal council.
21. Ibid.
xxx