Surat's looming crisis: Workers, industries pay the price of power cuts

Fifty-two-year old Mulayam Singh, who hails from Unnao in Uttar Pradesh and works in the Pandesara industrial estate in Surat, is sad that his friends and colleagues from UP have gone back home for festivals, but he has not been able to due to his lack of savings. 

“To make matters worse, the weekly power cuts mean that I lose employment for a day, unlike those working in the city limits who are able to earn more and save for a trip back home,” rues Singh.

Last month, the state-run Gujarat Urja Vikas Nigam Limited (GUVNL) had ordered weekly staggered holidays for industries with non-continuous processes across high-tension and low-tension users. By late April, the peak power demand in the state had crossed 21,000 MW, much of which came from the industrial and agricultural sectors. Gujarat's power generation capacity stands at roughly 37000 MW.

A senior official at GUVNL maintained, however, that the order to industry for taking staggered holidays was not mandatory. “Gujarat is in a better position regarding power and is looking at ways to meet the future rise in power demand,” the official told Business Standard.

Gujarat, and in particular Surat, may not have seen the kind of power crisis that has affected other states of north India, but workers in Surat’s textile industry, especially in the power loom sector, are at a particular disadvantage if there is even a minor decline in production. This is because power loom workers are paid per metre of cloth woven. Staggered holidays and a lesser number of shifts mean that they can produce less and, hence, earn less.

The second part of a series on  power crisis takes you to Surat, a commercial textiles hub. This ground report looks at the impact on weaves and knit

Surat has a migrant worker population of between 1.2-1.5 million, largely employed in textiles, followed by construction and much further down, by the diamond industry. Most of them are from Odisha, Bihar and Uttar Pradesh (UP), among others. In normal times, Surat’s textile workers are relatively better off than their peers in other industries since they earn on a piece rate basis. For every metre of grey cloth or fabric that they churn out, they get paid anywhere between Rs 3 per metre and Rs 5 per metre, amounting to average monthly salaries of about Rs 20,000 to Rs 25,000.

Mulayam Singh's employer Vipul Bekawala of Jai Mata Di Textiles in Pandesara, one of the largest power loom and textile clusters in Surat, says that around 40-50 per cent of the industry’s migrant workers have gone back to their home states, leading to a shortage of labour. This, together with the sluggish demand and weekly power cuts, have led to the industry operating at a sub-optimal capacity. 

Today, instead of the usual production of 40-45 million metres of fabric per day, Surat's textile industry is churning out roughly 30 million metres per day.

“This year, many workers have gone back home on extended vacation. Moreover, due to the weekly power cuts and staggered holidays, workers from our industrial area have shifted to units within the city limits where there is continuous power supply and, therefore, a steady income,” says Bekawala. As a result, he adds, out of the 250 power looms at his unit, only 130-140 are operational during the day shift and fewer still during the night shift. 

Industry sources estimate that 400,000-500,000 migrant workers are employed by textile weaving units, another 300,000-400,000 by textile processing units, and 200,000 by textile traders in the wholesale markets. Surat has an estimated 450 textile processing units, 600,000 weaving and knitting power looms, and over 700 textile markets that employ nearly half a million workers for packing and dispatching of finished goods. 

While the diamond industry is largely situated within the city limits where power is distributed by private player Torrent, most of the textile units, including power looms and processing units, are located outside the city, where the state-run Dakshin Gujarat Vij Company Limited (DGVCL) supplies power.

Denying the impact of the shortage of coal and a power crisis, a senior DGVCL official maintains that power cuts are being done only as part of regular annual maintenance ahead of the monsoons. “This has nothing to do with the power crisis. This is an annual exercise done in the summer season to ensure maintenance to reduce mishaps during the monsoon.”

Nonetheless, the weekly power cuts by DGVCL have seen at least a 10 per cent dip in production, says Ashish Gujarati, president of South Gujarat Chamber of Commerce and Industry (SGCCI).

“For the textile industry, a production loss of 10 per cent is heavy because of the fixed overhead costs. This coal and power crisis is going to remain for around two more years. Hence, we have requested policymakers and the government to come out with solutions in renewable energy. In Gujarat, industry is growing at around 6-7 per cent and so power is also growing commensurately,” Gujarati adds.

Industry insiders say that though the textile processing sector is not so affected by the weekly power cuts, the prices and availability of coal have had an impact on its value chain. These units largely depend on imported coal for its boilers. But with the price of imported coal almost doubling, input costs have spiked from anywhere between 25 per cent and 40 per cent, says Jitu Vakharia, president of South Gujarat Textile Processors Association (SGTPA).

“In textile processing, production is not much affected by weekly power cuts since the weekly off is used for the maintenance of machines and boilers. The impact, however, has been in terms of imported coal prices and availability. Other input costs such as dyes and chemicals, especially sodium hydrogen sulphate and other discharging agents, have seen a price hike of 30 per cent to 150 per cent, resulting in almost a doubling of total input costs,” says Vakharia.

And since demand is weak, the textile processing industry is unable to pass on the input cost hike to the subsequent value chain and textile buyers.