From Spinning Yarns to Losses, How Bhiwandi’s Loom Owners Survive
One year after GST came into effect, Bhiwandi’s power loom owners are struggling to make ends meet.
The once deafening sound of looms weaving cloth in Maharashtra’s Bhiwandi is now a thing of the past. The reason according to loom owners is GST. It’s been a year since the central government imposed the Goods and Services Tax (GST) and despite going digital, Bhiwandi’s power looms have been unable to adapt, leaving the livelihoods of thousands uncertain.
A year ago, The Quint visited power loom owners in the area as they struggled to decode GST and keep up with the digitisation drive that left them scrambling to save their businesses. While some are struggling to make ends meet, many loom owners have already been forced to shut shop.
Naushad Alam, 42, is one such former loom owner.
I used to run 24 looms but due to high electricity bills and increased costs due to GST, I suffered losses worth over Rs 1.5 lakhs. I was forced to sell my looms because of this. I am now working here in someone else’s mill. I owned my own mill for over 20 years but not anymore.Naushad Alam, loom worker
Today, Naushad earns Rs 8,000 per month by working part time in another power loom – not even one fourth the amount he used to earn earlier. It’s barely enough to sustain his family.
One of the key grievances that small scale loom owners have is being denied a 7 percent input tax credit refund.
In the textile industry, we are charged 12 percent tax under GST. When we weave this into a cloth and sell it, we receive a 5 percent return. The remaining 7 percent GST isn’t refunded to us by the government. Despite having a GST number, additional costs are not refunded. For instance, if we buy any electronic items like fans or AC for our loom units, the GST input tax credit return for these isn’t given.Moazzam Ansari, power loom owner
In a span of one year, Moazzam has had to sell off 50 percent of his looms to make ends meet and also invest additionally on a chartered accountant to navigate laws under GST. “We are surviving by breaking into our savings. The condition is so bad that the government has imposed its law but the small businesses here are completely destroyed. If you want to buy a power loom today, it will cost you Rs 1,20,000 approximately, but this is being sold as scrap for about Rs 35,000,” added Moazzam.
When The Quint spoke to 61-year-old Hanif Nathan last July, he had just laid off 9 workers, unable to shoulder the additional costs. Today, he’s left with just four workers, struggling to keep the shutters of his family’s 52-year-old business open.
There used to be 8.5 lakh looms earlier, today there’s barely 6 lakh looms left in Bhiwandi. Given how badly markets in Surat and Ahmadabad have been affected, this has adversely impacted Bhiwandi. About 80 percent of the materials made in Bhiwandi used to be sent to Gujarat, that has stopped. Earlier, we used to manufacture about 6 crore meters of cloth, now it’s about 2 crore meters.Hanif Nathan, loom owner
Loom owners say, markets in Gujarat now opt for materials and finished products from other states like UP and Kolkata due to the difference in cost. Loom owners in UP and Kolkata can offer better prices on their materials as they end up saving a lot on electricity bills.
Once an employment hub for migrant workers, today, loom workers are moving on to other industries to make their ends meet. Mukesh Singh has seen his friends and co-workers and return to Bihar in search of other jobs that guarantees payment. After spending 15 years as a loom worker, he wants to make the jump but fears that his skills are too specialised.
In the last one year, so many people are returning home because there’s no work anymore here. We will starve if we don’t work for even a day. About 50 of my friends lost their jobs and had to leave. If the company shuts down, I too will have to leave. Even the amount I earn now isn’t enough for my family.Mukesh Singh, worker
Aijaz, another migrant loom worker from UP earns just Rs 5000 working a part time job in a loom. A year ago, he earned Rs 15,000. “What will we send home, if we can’t even cover our own expenses?” he asks.
High electricity bill plague most mill owners, pushing them to shut shop. Power loom owners say, in Maharashtra, the electricity charges per loom is at least Rs 1,000 more than it is in a few other states.
In Uttar Pradesh, electricity bill per loom is Rs 75 per month. Here it costs about Rs 1200 per loom each month. For each unit (24 looms) we have to pay up Rs 29,000 every month. How will we compete with them?Habib Ansari, loom owner
Unable to pay such high electricity bills at a time when sale is minimal, most loom owners sell their looms as scrap parts.
“The condition of loom owners is such that if they manage to pay electricity bill, workers’ wages and repairs, then I challenge you that they won’t be able to afford the ration in their homes,” added Habib.
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