With almost every industry in Ludhiana grappling with one crisis or another, the slow industrial production has not only resulted in diminishing profits for small and medium enterprises (SMEs) as well as larger units but also forced the closure of many SMEs in Ludhiana.
According to industrialists, with diminishing profit margins and the closure of small units, retrenchment always was on the cards. The textile industry, which is the second-largest job provider after agriculture in India, continues to struggle.
In the beginning the textile industry was hit hard by rupee appreciation, which eroded the capital of many exporters and forced others to diversify in the domestic market; the rise in domestic cotton prices has dealt another blow.
The president of the Ludhiana Knitters' Association, Ajit Lakra, says the industry has exercised the option of retrenchment to reduce losses.
Sanjeev Gupta, managing director, Kuvam International Fashions Ltd, says retrenchment from industries of Ludhiana now must have exceeded 10 per cent. The retrenchment has been mainly in the middle management level.
However, experts say not only the textile industry but others too like the engineering industry, bicycle units, and sewing machine makers are facing the same problems.
Talking to Business Standard, S C Ralhan, regional chairman, Engineering Export Promotional Council (EEPC), says engineering units in Ludhiana may have cut jobs.
D S Chawla, former president, United Cycle and Parts Manufacturing Association, Ludhiana, maintains that due to stringent labour laws it is not possible to evict someone from job. So the industry is going slow on this.
"Earlier when a worker went home on vacation, we would discourage him. Now with production falling down and profit margins eroding, workers are encouraged to go on leave, which indirectly means retrenchment," Chawla says.
