Financial Daily from THE HINDU group of publications
Thursday, Apr 03, 2003
Financial Daily from THE HINDU group of publications Thursday, Apr 03, 2003 |
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Industry & Economy
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Readymade Garments Garment smuggling hits local units Sajeev Kumar V.
KOCHI, April 2 THE arrival of readymade garments in large quantities through illegal routes is not only depriving the local manufacturers of their legitimate market share but also threatening the existence of several units and their workers in Kerala. It is estimated that consignments worth crores of rupees come into the local markets of Kerala on a daily basis from neighbouring States of Tamil Nadu, Maharashtra and Karnataka. A large share of this is illegal due to tax evasion and had put the local manufacturing units in a lot of difficulties. Mr P.K.Rajeevan, President of the Garments Manufacturers Association of Kerala, said the unauthorised movement of readymade garments had put several local units in the State on the verge of closure. There are about 10,000 odd units in Kerala and since 1996, almost 40 per cent of the units had downed their shutters or implemented production cuts. The reduced production has also affected the survival of various auxiliary units such as cloth, wool, elastic, buttons, packaging materials etc. As per rough estimates, around Rs 1,500-crore business transactions are going on in the State on yearly basis in garments sale. Of this, the share of Kerala units is estimated to be at less than 25 per cent. According to Mr Rajeevan, if this situation continues, the entire garment industry in the State will collapse affecting the job opportunities of around 3.5 lakh people. Most of the units in the State are now utilising only 4th of the production capacity for the last few years due to the prevailing situation. Even the authorities concerned have not responded to the long-pending demand of the Association to effect a tax increase on garments brought to the State from outside units. Criticising the Government for not taking any steps for the protection of the industry here, he said the governments in the neighbouring States are extending all support to the units there by way of financial help as well as in marketing efforts. To provide a helping hand to various sick units in the State, the Association has decided to start trade centres throughout Kerala for marketing garments manufactured by local units. The facility will avoid all the middlemen in the deal. The Association, he said had submitted a representation to the Government demanding concessions in power tariffs, interest rates reduction for loans, income-tax exemption to units below Rs 50 lakh turnover etc. It also demanded the Government to declare the year 2003-04 as `SSI Development Year' for the benefit of the industry. If the authorities had taken constructive steps for the benefit of garment units, it could have generated more job opportunities in the State which is reeling under severe unemployment crisis, Mr Rajeevan said. The Association also appealed the Government to re-start the operations of the Kerala Garments Ltd, Kannur, and also to appoint a representative from the Association in the Board.
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