<b>XI LOK SABHA DEBATES, <i> Session IV (Budget) </i> </b> XI LOK SABHA DEBATES, Session IV (Budget) Wednesday , May 14, 1997 / Vaisakha 24, 1919 (Saka)
Type of Debate: SHORT DURATION DISCUSSION (RULE-193)
Title: Regarding problems of textile industry. (Not Concluded) TEXT : 15.35 hrs.MR. CHAIRMAN : Now, we will take up the discussion under Rule 193. The time permissible is two hours. I request Shri Sanat Mehta to initiate the discussion.
SHRI SANAT MEHTA (SURENDRA NAGAR): Mr. Chairman, Sir, I am here to speak on one very sad chapter of our economic planning. I would say that it is a calamity affecting nearly one million families in the country. It is not a natural calamity, but a man-made calamity, and a calamity created by our economic development.
The textile industry is a pioneering industry in the country. Even when the country was not free, this industry provided the largest employment to the skilled workers. The sickness in this industry was visible not just now, not even for a decade, but for more than a decade. The sickness in the textile industry was visible since 1982.
The Textile Secretary, when he presented his case before the Standing Committee on Industry, reported that 301 mills or companies were registered with the BIFR at present. As on 30th November, 1996 the number of textile mills which have been referred to the BIFR is 189. The Textile Secretary made a very interesting remark that no mill was closed under the Industrial Disputes Act, 1947. This is a very interesting situation.
The Industrial Disputes Act, 1948 is meant for regularising and controlling the closure of the industrial units. When 301 mills were referred to the BIFR, it means that they were either sick or closed down. Those mills have not been closed down as per the Industrial Disputes Act because if you
want to close down a unit under the Industrial Disputes Act, then you have to take the permission of the labour authorities in various States.
I am sorry to say that when such an important subject is being discussed, the Minister of Labour of the Union Government is absent. It would have been much better, if he had remained present in the House.
The remarks of the Textile Industry indicate that whatever number of textile mills were closed down, they were closed down without following any procedures laid down in the Industrial Disputes Act. What is the result of it? I can understand if the units were closed down after taking due permission. I can understand if the units were closed down after paying voluntary retirement benefits. But in this industry, which is a pioneering industry in our country and whose labour fought for freedom in the 1942 Movement, the units are being closed down without following any rules and regulations.
The closure of the textile mills took place between 1983 and 1995. The total number of mills which were closed down in Gujarat is 42, and the number of affected employees or workers in Gujarat is 72,933. It means that nearly 80,000 families in Gujarat, who were working in these textile mills, have lost their jobs.
These units are closed down without any rules and regulations and the most tragic part of the story is that these 80,000 workers who toiled for years and years in the textile mills were not paid any of their legal dues. No notice pay and no retrenchment compensation was given to them. Their salaries remained unpaid. The total amount of dues of the Gujarat textile labour works out to Rs.222 crore. It means that every worker, in addition to his losing his job, has lost Rs.30,500 in 20 years. These are the workers who fought for freedom and, as a result, in the 50th year of our freedom they got nothing but unemployment and ruin of their lives. Is this not anti-labour attitude of the country? What means of livelihood have been provided to these one lakh families who have become unemployed? Where will they go?
SHRI A.C. JOS (IDUKKI): May I ask a question? The hon. Member mentioned that State's permission is required for closing the mill. Under the same law, the State is empowered to prosecute the management of the company which closes down without getting permission. I am interested to know whether the State Government took any action against that factory which closed down or not.
SHRI SANAT MEHTA : I am sorry that your question will not be replied because the Textiles Minister cannot reply this question and unfortunately our Labour Minister is absent on this occasion.
SHRI A.C. JOS : It has to be done by the State Government.
SHRI SANAT MEHTA : This is a question which has been replied a hundred times. They close down on the plea that electricity bill is not paid and the connection is cut off. Then a long procedure of prosecution goes on. The prosecution is never decided and the unemployment continues whether it has resulted out of cutting of the electricity wire or due to some other reasons. I am worried more about the unemployment than about the formalities.
It is not that this industry is in a bad condition today. It is not that out of this industry, the Government of India is not getting anything. This is the industry which is at present providing 33 per cent of the export earnings of the textiles.
As far as production of yarn is concerned, why I refer to this matter is because when the sickness started in 1982, many economists wrote articles in various journals of the country that the textile industry is a sunset industry and that there is no future for that. Those things have proved wrong with the result that production of yarn in 1991-92 was 1,805 million Kg. In 1995-96, it is 2,319 million Kg. While the share out of the fabric has gone down, the share of the textile indutry in the manufacturing of fabric was 10 million metres in 1991-92 which is reduced to 6.7 million metres. Export of textile is Rs.35,506 crore. Today Rs.35,000 crore export is done by textile mills. The increase in yarn production is almost 50 per cent. I think because of the export, the Government of India must be earning foreign exchange. It is not a situation in 1995-96 or 1996-97 or 1997-98 that the textile industry is a sunset industry. What has resulted is that the composite mills have closed down and the spinning mills are developing and the workers who are working in the composite mills have been thrown out. I do not understand such a situation can be tolerated anywhere.
Then what happened? In July 1991 when the new Industrial Policy was evolved, the then Finance Minister came to the Lok Sabha and in his Budget speech, he spoke in para 52 like this:
"Government will establish a National Renewal Fund with a substantial corpus. The main objective of this Fund will be to ensure that the cost of the technical change and the modernisation of the productive apparatus does not devolve on the workers."
He further said:
"This Fund will provide a social safety net which will protect the workers from adverse consequences of the technological change and the deployment."
I visualise that these are the words of the former Finance Minister. Since 1991, all the Finance Ministers have been making a dream budget because now the Budgets are not called as `workers' Budget' or the `poor man's Budget' but a new phenomena has started in the country in the name of `dream Budget'. In this `dream Budget' he has mentioned that this Fund will not merely provide ameliorative measures for the workers affected in the course of technical change but more importantly provide re-training to them so that they are in a position to remain active productive partners in the process of modernisation. What happened to this promise? I will give some figures which will prove this. The NRF was started in 1992-93. By now, Rs.3100 crore was allocated to the NRF in each year's Budget till 1996-97. The House has to know this that we provide money in the Budget but we actually do not know whether the money is utilised or not. The total provision made in this year was Rs.3100 crore. How much was actually allocated? Rs.1,769 has been transferred to public account and the remaining was kept without being used or diverted to fill the deficit. And out of that Rs.1,769 crore, Rs.1,505 crore was used only for voluntary retirement scheme.
In 1996-97, the hon. Shri Chidambaram presented the Budget. There was no activity whatsoever. The NRF remained standstill. The safety net disappeared. Workers were forgotten. Let me tell you as to why I am referring to the total figure. Under the VRS, out of round about 70,000 workers, most of them were textile workers. It means that the NRF money was neither used for drehabilitation of textile industry nor for providing the dues. I remember that day when the NRF was formed. The then Industry Secretary in the Udyog Mantralaya had invited me from Gujarat. He spoke in the presence of representatives of all the States saying that this money was only meant for the workers. One of the Secretaries of the Textiles Department of one State Government said that he wanted to revive the textile industry in his State. He was told that the State Governments would not get the money for that. The first priority of the money would be to pay the dues of the workers. These were the words. From that onwards till 1997, Rs.220 crore which was due to the textile workers of Gujrat, not a pie has been paid out of that NRF.
Then re-training for employment was another promise given by the Finance Minister. He said that if they were retrenched, they would be re-trained. What is the record of re-training? The number of persons deployed in five years was 2,990. In how many States? In 16 States, 2,990 workers were deployed. It comes to 186 workers per State in five years. This means, 37 workers per year. This is the result. The safety net has disappeared; employment re-generation has disappeared. The only things were the VRS and re-training. The figure was 37 persons per year in 16 States.
The ILO made a report on this whole NRF Scheme and particularly on re-training and re-deployment. The ILO reported that it covered less than two per cent of all the employees in Gujrat. In 46 mills, 72,903 workers were affected and only 5000 were trained. This is what the human face of our liberalisation is! The story does not end here. It was referred to the BIFR. What is the history of BIFR? It has a very interesting record. Only the NTC holding companies were referred to the BIFR. What is the track record? Out of 301 textile mills, the BIFR sanctioned only 66 mills under rehabilitation scheme. It recommended 96 mills for winding up and the number of cases not to be maintainable is 57. The Textile Ministry referred the case to the BIFR. The BIFR finds that out of 301 mills, 57 cases are not maintainable. Even then they were referred just to make a face to the labour that their cases were referred to the BIFR. The BIFR examines it.
Another tragedy is that the BIFR has a rule that if a West Bengal Textile Corporation is referred to the BIFR, they will not examine it mill-wise. Suppose, out of eleven mills, six mills are viable, they will say that it is none of their business to examine them. They will examine only the holding company, with the result, even the viable units will be declared non-viable. I will give you the record as far as Gujarat is concerned. The NTC has got 22 textile mills in Ahmedabad. The BIFR asked the IDBI to make a report on that. The IDBI reported New Swadeshi, Sahyog, Silver Cotton, Subbalakshmi as the viable units. But because the NTC holding company of Gujarat is referred to the BIFR, all the mills are closed down and with the result, whichever mills were viable, they were also declared to be wiped out.
I have heard that now they are going to ask the BIFR to examine the case individually. This can happen when all the individual mills are declared as individual holding companies. If this is the situation, what is the past track record of this country? How have we travelled during the years after our freedom? I was a member of the Bombay Bilingual State Legislative Council. At that time, Shri Shantilal Shah was the Labour Minister of that State. There was some difficulty in making payment during 1958-60. Shri Shantilal Shah had brought a Bill in the Bombay Bilingual State Council so that employment of labour is protected. During those years, when the mill-owners were able to run the mills, the textile corporations were formed. A number of guarantees were given by the States. At the end of it, when we started progressing more and more, we came to know that nobody cares for these textile workers these days. Nobody does anything. Even prior to the present situation, when Shrimati Indira Gandhi was the Prime Minister, there was a sick textile mill in Gujarat. But overnight, 11 textile mills were nationalised. Then a valuation was done and an authority was appointed. Whatever may be the reason, I have got a list to show as to how much money was paid to each textile mill.
One textile mill was paid only Rs. 32 lakh as a compensation and overnight mills were taken over and the workers were saved. This was the time in this country that if the textile workers were in difficulties, overnight by Ordinance, textile mills were taken over. The mill owners fought up to the Supreme Court and the Supreme Court said, "Whatever price has been paid to you is all right. You cannot dispute it". And, today what is happening? Those days are over. The maximum compensation given was Rs. 32.31 lakh. Now, in the VRS, Rs. 220 crore unpaid is there. There is a dream promise, promise to keep the parties of industrial production. The promise to the industrial workers is over.
Then came the idea of `Turn Around Scheme' in the Textile Ministry. The `Turn Around Scheme' was evolved and 79 mills are covered under that scheme. How much was the cost of the `Turn Around Programme'? It was only Rs. 2,005 crore. But the Government has no money for those one lakh families. Those workers are of no use. They have served the country for 20 years, they have toiled and built the whole structure of the textile sector and the Government has no money! So, the Textile Ministry found out a way that the NTC has 1514 acres of surplus land in the metropolitan cities of the country. The Central Board of Direct Taxes was asked to evaluate the land. The land was evaluated at Rs. 2,389 crore. This also needs an investigation.
There is another pubic body in Mumbai which has published a booklet which says about 600 acres of surplus land in Mumbai, the heart of the city. It was before two years, when the land prices were very high. They have estimated that the cost of that 600 acres of land is from Rs. 15,000 to Rs. 20,000 crore. And the Central Board of Direct Taxes says that the total value of this land is hardly Rs. 2,389 crore. They required Rs. 1,900 crore for the `Turn Around'. The scheme was made on the eve of the elections. All national centres were called and an agreement was signed. Our hon. Speaker was, at that time, the Labour Minister and Shri G. Venkat Swamy was the Minister of Textiles. Every worker thought that "now dream will be fulfilled. Rs. 1900 crore will come, 79 units will recover and he will get the employment'. But then came a Statement in this House by the then Textile Minister. He said:
"In view of the above-mentioned reasons and fact that the sale proceeds from the surplus land were not available for the investment in rehabilitation, the Turn Around Package of 1995 would not be put to implementation."
He washed his dirty linen in the House by saying, "I am unable to do anything." For two to three years, the workers were provided a dream that this `Turn Around Programme' would come.
Mr. Chairman, a few days ago, on the 9th of this month, in Parliament I raised this question and then came the reply.
"In the Statement made on the floor of this House on 3.3.1997, the reasons for non-implementation of the `Turn Around Strategy' for the NTC mill approved by the Government in 1985, have been indicated. Since the sale proceeds from the surplus land are not available and the BIFR has not yet given its approval to the rehabilitation package, the NTC holding companies have submitted a report after reviewing the economic viability of each of the millls by taking into consideration the concessions approved by the Government in 1995 and the concept of net worth becoming positive as per the BIFR norms, this report is presently under the consideration of the Government. No final decision has yet been taken. The salient features of the revised `Turn Around Strategy' would be laid on the Table of the House as and when finalised."
So, another dream of `Turn Around' is waiting for the coffers of the Government of India.
16.00 hrs.
During this time, as a man who had spent the whole life in the trade union, I had submitted, at the instance of the Government of India, a scheme. The Secretary of the Industrial Development Department said that such a kind of regeneration scheme was only possible in Ahmedabad because Ahmedabad had a tradition of Mahatma Gandhi's late labour movement. Some 10 to 15 textile mills had gone under liquidation. I had engaged an expert of urban planning and paid him a sum of Rs.50,000 to Rs.75,000 from my voluntary organisation, from my trade union and prepared a project. The project was very simple. Ahmedabad was the Manchester of India. During this period, in 1982 the share of Ahmedabad was 4.2 per cent in all new investments. And by 1992, the share of Ahmedabad in new investments came down from 4.2 per cent to 2.54 per cent. One-third of the textile mills were under liquidation. The Economic Adviser of the Industrial Development Department, Shri Rakesh Mohan, came to Ahmedabad -he is now being referred to as a magician for the infrastructure development -- and requested us to work out something with the help of the town planner and with the help of the economist. We worked out a scheme. The scheme was very simple. The scheme was to reuse the land, to pay the workers their dues and put up the new industries inside the wall of Ahmedabad. Anybody, who is of the old times, would know that Gandhiji was living in the Ashram, which is on the west side of the bank, in 1930. On the east side, there were textile mills. When Gandhiji was asked as to what inspired him to fight for the textile labour he said that daily in the morning he was watching those chimneys of the textile mills and he was worried about those labour. He started a labour movement in Ahmedabad.
At present, Mr. Chairman, Sir, the whole eastern part of Ahmedabad has been totally ruined because all the textile mills have been closed down. The workers are fed from hand to mouth. Nothing had been done. So, a scheme was worked out. We worked out a scheme. What was the broad outline of that scheme? The value of the machinery, which was under liquidation -- there was no problem of anything and if the Government of India wanted it, it could have asked the liquidator when we would have started this scheme -- was Rs.60 crore; the value of the building was Rs.4.5 crore; the value of land was Rs.93.90 crore and the value of fixed assets were Rs.30.54 crore. The total income, which would have generated, was Rs.191.84 crore. Somebody would say: `You know the creditors who have given the money. The financial institutions and the banks should be paid back." That was also under consideration. Against the liability of total accredited creditors, who had fought for their rights -- the financial institutions, banks, IDBI -- total valued liability was Rs.191.84 crore and the dues of the workers were Rs.86.70 crore.
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