Sluggish market and money crisis have reportedly resulted in at least 40 per cent decline in the production of finished fabrics at textile processing units in the Indian textile hub, Surat. The decline in production has been majorly reported in the last fortnight.
“A serious shortage of cash rotation in the market has led to this griming situation,” South Gujarat Textile Processors’ Association (SGTPA) President Jitu Vakharia was quoted as saying by Times of India.
Notably, the negative impact of GST (Goods and Services Tax) has hit the sector the most. Since the implementation of the new taxation system, the industry has reported a 30 per cent hike in the cost of raw materials needed for the processing of grey fabrics.
In addition to the price rise of raw materials, the industry players were forced to announce the wage hike for textile workers on Labour Day.
Adding to that, the absence of workers (who are on leave due to personal reasons) has also impacted the productivity. Those working overtime are seeking wage hike as they are supposed to meet production targets.
The reports claim that the severe liquidity due to delay in payments of almost 100 days and the decline in fabric demand have also added to the woes of manufacturers.
The unit owners do not have enough cash to pay wages to the workers.
