Apparel manufacturers across the nation are strongly voicing their concerns that they are not in a position to pay wages and salaries for the month of April. Time and again, various export promotion councils (EPCs) and trade bodies have requested State and Union Government but nothing concrete has come forward so far.
Team Apparel Resources spoke to several apparel manufacturers across the country and all were of the view that they are not in a position to pay April wages. Even top exporters of the country shared that they can’t even pay wages, no matter whatever the Government advisories are.
Now the issue is becoming more critical and industry has started asking for the salary of May month also. Dr. A. Sakthivel, Chairman, AEPC is of the view, “Indian apparel export industry is nearing collapse as we estimate a loss of export of over US $ 4 billion. Coupled with this, the lockdown in our country has also resulted in complete stoppage of work. So, we are not in a position to pay wages for April and May despite our best intention, as there is absolutely no production and no revenue stream.”
He, however, suggested to the Government that the latter can pay wages from the funds available in the Atal Bimit Vyakti Kalyan Yojana (ABVKY) scheme, which has, as understood, huge reserves of about Rs. 91,000 crore, as contributed by employees and employers.
Apparel manufacturing industry, being highly labour-intensive, has wage bill of about 30 per cent of the product cost, whereas in other sectors it ranges around 5 per cent. The apparel sector works on very low margins of 4-5 per cent only.
It is also pertinent to mention here that many apparel manufacturers, especially exporters, faced difficulties in paying the wages for the month of March also as they have not received payment of their previous shipments also.
“To pay the wage of April from our pockets, we have to sell our factories. Even after accepting our payment from buyers (on hefty discount), majority of exporters are not having required funds to pay even minimum wage to their payroll workers,” shared a well-known exporter on the condition of anonymity.
Virender Uppal, Chairman, Richa Global Exports also told AR, “It is very dicey situation. We have told the Government that exporters don’t have salary and wages of April month, Government must give something to us. Many other countries have supported their industries in a good way especially to pay wages and salary.”
Gurgaon-based Richa Global Exports is one of the few export houses who was performing well before lockdown and expanded recently with the new factory.
On the other hand, following orders of the Government, some of the firms are paying their workers. Ludhiana-based Davinder Sandhu Impex’s MD Davinder Singh told that he has deposited Rs. 60 lakh in the accounts of its 2,800 workers. “As per official orders, we have to pay at least Rs. 2,500 to every worker. We were lucky to have liquidity and so we paid it.” He further added that the remaining amount will be deposited soon.
Earlier it was being said that Government is working to give a package to support the industry and its major part will be for the April wages. With only 10 days left in April and no announcement made, worries of apparel manufacturers are growing.