In 2019, Scroll.in’s Hard Times series sought to explain and illustrate how India’s slowest economic growth in a decade was affecting ordinary people. This followed reporting by Scroll.in in 2016 and 2017 on the effects that demonetisation had on the lives of Indians around the country.
As the world continues to grapple with the Covid-19 crisis, Hard Times now takes a look at the impact of India’s draconian lockdown on individuals and firms from all corners of the economy. Read all of the pieces in the Lockdown Hard Times series here.
Since the last week of May, Nitin Puthavala has been setting out on his bike every morning, riding through the textile hubs of Surat city, diligently calling on yarn dealers, loom owners and other old acquaintances.
He has been hoping to revive his modest business as a yarn trader, but nearly three months after the Centre announced a nationwide lockdown to contain the Covid-19 pandemic, he has resigned himself to fate.
The looms have fallen silent, traders sit idle. The chaos and clatter of Surat’s giant textile industry in southern Gujarat has wound down to a slow murmur.
“The karigars have left the city. Without them, the industry cannot run,” said 45-year-old Puthavala, who has been trading yarn for the past 18 years.
The karigars or craftspeople he is referring to are lakhs of skilled, daily-wage migrant workers who operate the looms, work in mills and yarn processing factories and transport goods.
‘Income has been zero’
When the coronavirus lockdown was suddenly announced at four hours’ notice on March 24, the workers were left without work or pay, with rent to pay and no ability to feed themselves for long. Lack of transport options forced millions of urban migrants across India to undertake perilous journeys back to their villages, often on foot.
In Surat, those who stayed back erupted in aggressive protests against city and state authorities on at least three occasions, demanding transport to allow them to get home. In May, as the Indian Railways started running Shramik Special trains for migrant workers, textile labourers finally emptied out of Surat and returned to their villages in north and east India.
Now that India has begun the process of “unlocking” its economy, Surat’s textile business owners and traders like Puthavala are itching to restart work. But only a fraction of the industry has been able to open up, with the handful of karigars who are still in the city.
“If the workers had been given time to travel home before the lockdown, they would have been back by now. But they could leave only in May, and will not be back before mid-August,” said Puthavala. “For more than two months, my income has been zero. So it’s a bad situation.”
‘People in the middle’
Puthavala is the sole breadwinner for a small family that includes his wife, a 13-year-old son and an 18-year-old daughter. They live in a densely populated middle-class neighbourhood near Surat railway station, not far from the large textile mill complexes on Ring Road where Puthavala usually works.
As a relatively small trader, he does not have an office of his own. He is always on the move, juggling meetings with other cogs in the wheel of a complex, well-established network of agents and middlemen, brokering deals between yarn manufacturers and loom owners. The yarns that Puthavala deals in – nylon, polyester, viscose, cotton – are woven into fabrics that ultimately become the saris, dupattas and readymade salwar suits that Surat famously exports.
The cost of yarn ranges from Rs 70 per kg for lower grade polyester to more than Rs 600 per kg for viscose, and a middleman’s average commission is 2% or 3% of that. To buy and supply tonnes of yarn to weavers every month, Puthavala must have several lakhs of rupees in hand at all times – yarn makers do not supply their processed thread without being paid first.
“But the payment chain does not work the same way when I sell to weavers. Loom owners can take 35 to 70 days to pay me, so my income is never steady or reliable,” said Puthavala, who can earn more than Rs 60,000 on some good months as little as Rs 25,000 at other times. With such fluctuations, savings have been crucial for him to be able to provide for his family.
Two months of the lockdown, however, have nearly wiped out Puthavala’s savings. Hesitant to talk about how he and his family have been coping with the financial strain, he expresses himself in more general terms.
“The big companies have enough money to fall back on, so they don’t suffer. And the small men never had anything to begin with, so they carry on,” he said. “It is vachche na manaso – the people in the middle – who suffer the most, because they find it difficult to admit to anyone that they have no money. They have never had to beg before.”
‘Why did we lock down?’
Like many other traders and manufacturers in his industry, Puthavala bears mild resentment towards the migrant workers who left Surat after the Covid-19 lockdown.
“Many NGOs had been working to provide food and shelter to the workers during the lockdown, but their mentality is such that when they got calls from their villages asking them to return, they decided to go home no matter what,” said Puthavala.
Tejas Randeria, a larger yarn trader and a former loom owner, has a more sympathetic view towards the migrant labourers. “They left because they were scared about the virus and their families were panicking in the villages,” he said. “Their wages are decent – experienced workers can get at least Rs 20,000 a month – but after the lockdown they had no income and no way to pay rent.”
Randeria describes migrants from Uttar Pradesh, Bihar and Odisha as “much more hardworking” than Surat’s local population, because they are willing to take up labour-intensive factory work with 12-hour shifts, as per the industry’s culture, rather than the 8-hour shifts required by law. “Our entire industry is dependent on them,” he said.
Even if migrant workers return to Surat by mid-August, Puthavala believes business will not normalise before Diwali. “And even then, I don’t think it will be the same as it was before the lockdown,” he said. “Already our dhandho – business – has reduced by 60% since notebandi and GST, and the lockdown has made it even worse.”
Puthavala is referring to demonetisation of 86% of Indian currency in November 2016, followed by the implementation of the Goods and Services Tax regime in July 2017, both of which dealt a severe blow to small businesses in Surat’s textile hub.
To revive his own trade, Puthavala has been keenly following government announcements of economic packages for businesses. On May 14, his hopes lifted when the Gujarat government announced a scheme to provide a Rs 1 lakh loan at 2% interest for people in lower income groups.
“But it turns out you need two guarantors to submit all their tax returns and other documents if you want to apply for the loan. Who is going to do that for a small businessman like me? How are people like us supposed to become atmanirbhar?” he said, quoting Prime Minister Narendra Modi’s exhortation to Indians to become self-reliant in the wake of the Covid-19 crisis.
Puthavala also mocked the central government’s announcement of a Rs 20 lakh crore economic package to revive Indian economy. “If the government had that much money to give to the needy, there would be no poverty in India,” he said.
With no immediate financial relief in sight, Puthavala is doing the only thing he can do – set out to work every day, hoping to strike small business deals, and wondering whether the lockdown was even necessary. “They shut everything for two months, now they are opening everything up, and still asking us to use masks and sanitisers and maintain distancing,” he said. “If that’s all we needed to do, why did we need the lockdown?”