Glitches in implementation of the Goods and Services Tax (GST) have paralysed the once-booming Surat-based textile industry. The Federation of Surat Textile Traders Association (FOSTTA) claims that after the rollout of the new tax structure, over 4 lakh jobs have been lost with many of the textile units in the city running far below their installed capacity. FOSTTA claims that daily production has declined from 4 crore metres a day to 2.5 crore metres. Moreover, the past 18 months have seen sales slump by about 30-40 % and payments getting delayed. The city’s textile industry provides employment to about 1.3 million workers. After demonetisation and GST, about 30-35% workers have lost their jobs while the rest have seen erosion of their wages.
“Two major changes — demonetisation and GST — have affected the textile trade in Surat and as a result production has fallen by nearly 40%,” said Champalal Bothra, secretary of FOSTTA. In view of the grim scenario, the association had recently written to Union textile minister Smriti Irani, apprising her about the crisis and urged government intervention and support. According to FOSTTA, textile and affiliated industries like power looms, embroidery and artisans have been losing jobs.
FOSTTA president Manoj Agarwal said, “Most of the textile and associated industrial units are small and unorganised. They are not able to understand and implement the complex structure of the new tax and this has led to many problems like fall in production and demand. Local artisans of embroidery have lost their jobs as they do not have enough work. Similarly, labourers in textile units are leaving to their home states for the same reasons .”
After GST, exports have decreased sharply from Surat. As the exporters have not received refund in time, several export orders have been canceled. Textile traders are also facing working capital shortage due to delay in payment from exporters and domestic buyers. FOSTTA estimates that exports have fallen by 60% post GST.
Rajesh Agrawal, director of Geeta Polyfab, said, “Export orders are constantly declining due to refund issue and this has directly affected the Surat textile industry. Most of the units are working on single shift in current season time.”
“The crisis in Surat textile units will worsen if corrective actions are not taken by the government,” warns Agarwal.
By Vimukt Dave