How a company called Kitex floated a party called Twenty20 in Kerala and won panchayat elections
The larger political impact of a business group in Kerala capturing power in panchayat elections has major political parties worried. Twenty20, the political front floated by the Anna-Kitex group of companies, has won over two-thirds majority in the 19-member Kizhakkambalam panchayat, decimating most prominent parties. The front won 17 of the 19 seats; the Congress and the Social Democratic Party of India won the other two seats; while the Left which ruled the panchayat during 2005-10 drew a blank. The voter turnout of 84.3% surpassed the state and district average.
While the company management has claimed the victory as public triumph over the indifference of political parties, critics warn that a private-company-led front taking over public administration is a bad precedent. Kitex Garments is a leading producer of children’s apparel for the US market. Kitex caters to premium brands such as Mothercare, Babies“R”Us, Gerber and Carter’s, besides retail giants such as Walmart and JCPenney. The listed company with a turnover of over Rs 524 crore in 2014-15 is planning its own brand for a parallel launch in the US by spring 2016.
Kitex started operations in 1995 as a multi-product garment factory. After initial hiccups, it forayed into infant wear in 2000 and that changed its fortunes. The company claims it produces 5,50,000 pieces of infant wear every day, and still struggles to meet its order book. It is planning to double its capacity in the next three years to meet the increasing demand. The Kerala State Industrial Development Corporation claims that Kitex is the largest employer in the state outside the government. It employs 8,500 people, mostly women, from over 20 states in the country.
According to officials of the Anna-Kitex group, who also double as the coordinators of the front, Twenty20 was founded in April 2013 as a CSR-based mission with the aim of transforming Kizhakkambalam as the best panchayat in the country by 2020. The company has maintained that it wanted to turn the village of around 8,500 families into a model village with the best amenities. “We are planning total development of the village, including providing drinking water, building toilets, reviving agriculture, industrialisation and healthcare. This, in fact, was the dream of my father MC Jacob, the founder of the group,” Kitex Garments Ltd managing director Sabu M Jacob told FE.
Critics say the company gained control of the village through a proxy political front to further its business interests. The promoters of the company have, in the past, used political patronage to obtain sanctions and break trade union strikes in their factories, MK Anil Kumar, former panchayat president and CPI (M) member told FE. “It is a dangerous precedent as the company has got control over village administration. It is learned they are planning to expand their facilities. With most of the public and administration on their side, they have ensured they don’t face any resistance.”
Responding to criticism, Sabu said that as many as 36 licences are needed to open a factory and only the working permit is sanctioned at the village level. “There are multiple agencies including the pollution control board, health authorities and the industries department that are involved in giving sanctions for a factory. Moreover, we are very careful with all the factors as we deal with leading multinationals and any violations could cause us dearly,” he said.
To ensure transparency and democracy, Twenty20 has a three-tier system, with a 20-member executive board at the top. Each ward of the village has a 50-member executive committee and a 950-member working committee under it.
Another criticism is they are channelising CSR funds of their own company and some companies which they can influence. Sabu said the mandatory CSR fund for the group comes to less than R2 crore per annum, while they have invested more than R30 crore in the past two years. Through Twenty20, which is registered as a charitable institution, the business has invested in a whole lot of amenities ranging from drinking water plants and roads apart from providing scholarships and medical expenses to the needy. The institution also subsidises groceries based on the income of families. “It is much more than CSR. It is Total Social responsibility (TSR) and we intend to transform this village into one of the best in India by investing R300 crore in the next five years,” he added.