Haryana plans sops for garment exporters

Labour laws relaxed as higher wages, stronger rupee take their toll.

With garment exporters in and around Gurgaon laying off thousands of workers, the Haryana government is set to announce a bunch of incentives that will help these exporters pare their wage bills.

Gurgaon contributes to almost a quarter of the apparel and garments exports from the country.

Haryana government officials said that the government was looking to permit contract labour in core activities in the textile, handicraft and footwear segments.

At the moment, such employees can be used only in peripheral functions like security, canteen services, and gardening. As contract labour costs a fraction of regular employees, this could help companies reduce their employee costs.

At the same time, a proposal to implement wages based on productivity and a voluntary overtime of two hours is under consideration and would be announced within a month, the officials added. This too would help the companies save on salaries.

Some apparel exporters have even petitioned the state government to allow women to work in their factories after 530 pm, as in the IT sector.

Wages of textile workers in the state had shot up by as much as 40 per cent after the state raised the statutory minimum wages for industrial workers recently. Coupled with the rise in the rupee, several apparel exporters in the state were forced to turn down orders and lay off workers.

Some companies are also relocating their manufacturing facility to high-productivity and low-wage locations like Indonesia and Bangladesh. Wages in Indonesia are 30 per cent lower and productivity is higher by 40 per cent, while in Bangladesh wages are 50 per cent lower and productivity is 25 per cent more than India, industry sources said.

The apparel, footwear and handicraft industry has also asked the state government to increase the floor area ratio (FAR) "" a ratio between the built-up area and the land size "" at par with the information technology (IT) industry. Currently, the maximum permissible FAR in Haryana is 125 per cent in general industry and 250 for the IT industry.

Orient Craft Chairman and Managing Director Sudhir Dhingra said, "If the FAR is increased, then we will get more space to employ people and increase our efficiency and productivity."

The textile industry has also requested the government to increase the maximum height of industrial buildings from 21 metres to 30 metres as allowed for IT companies.