A village offers a lesson on beating slump

It would be reasonable to assume that many have never heard of Irba.The place — a village of predominantly Muslim weavers on the outskirts of Ranchi — will feel familiar, with the bleak sameness characteristic of much of rural India. Open drains are clogged by a jumble of plastic bags. On a recent winter day, children played in the open, as the sun shone bright. Roads exist but they surprise you with sudden turns, potholes and puddles. And then, just when you have begun to form a composite image of the place as a forsaken landscape, a modern multistorey complex with a fleet of trucks and guards appears. Set up in 2016, this is the first of the two plants that Orient Craft — a leading garment exporter for brands such as Marks & Spencer and GAP — has set up in Ranchi that employs 2,300 workers.Janki Kumari, 20, has worked there since 2017. Coming from a large tribal family — two moms, a farmer father and nine siblings — they had food to eat but never had money for anything else. Her studies stopped after Class XII and she worked at home and on the farm. In 2017, after a two-month training at an Orient Craft centre at her village in Simdega, she started working and now earns Rs 9,800 a month. “At first, I thought I will not be able to work on these fancy machines. I am now comfortable. I love it here,” she says. Her sister, too, followed and works there. They each send about Rs 6,000 home every month. It has helped put their siblings in private schools. 73206507 A floor above, Pushpa Minj, 26, is at her work station. After she lost her husband in 2013, the single mother of a six-year-old tilled the family farm in Lohardaga and sold vegetables to earn a living. “It was very difficult,” she recalls. In 2015, she trained at an Orient Craft centre at her village and took up a job in the company’s Noida factory. “Moving to Delhi, so far from home was tough,” she says. In 2017, when she learnt the company was setting up a plant in Ranchi, she asked for a transfer. Her salary has risen from Rs 9,000 to Rs 9,800 even as her expenses have lowered. “This is beyond my dreams. I never thought I could find a job like this here,” she says. Besides statutory benefits like annual leave and provident fund, the biggest draw is the Employee’s State Insurance (ESI) facility where she and her family get free treatment and medicines. 73206523 Kumari and Minj are among the 10,000-odd people who have found employment as a result of a policy initiative by Jharkhand in 2016. The state announced that it would pay Rs 5,000 a month for every worker employed by a garment factory, making Jharkhand an attractive destination. About 40 projects and factories have been announced and are under construction. These will directly employ over 25,000 workers — in less than four years. If you include the proposals that have been approved, you are looking at a potential generation of 40,000 jobs.As India stares at a punishing economic slowdown and investment drought, the success of the Jharkhand wage subsidy initiative offers a model that can promote job creation, export competencies, rural prosperity and consumption demand. In a sector like garment export, where India has steadily lost out to Bangladesh and other countries, other states could learn and profit from this experience. 73206532 Since 2016, 11 garment exporters, including Arvind Ltd, Kishore Exports and Matrix Clothing have set up plants in Jharkhand. Orient Craft, which started with a small plant at Irba with 900 people, has 2,300 workers in that plant and has just inaugurated its second, fully sustainable plant, with a capacity to employ 10,000 workers. Its success is inspiring new exporters to set up shop. In the pipeline are more than 24 new plants from India’s biggest exporters—Shahi Exports, Laguna Clothing, Pearl Global and Best Corporation, among others. Another 14 proposals have been cleared. When completed, these will cumulatively turn these parts into a substantial industrial cluster. Sarbajit Ghose of Laguna Creations says their new eight-acre plant will commence operations in October, with a peak demand for 2,200 workers. Deepak Agarwal, MD of Kishore Exports, runs two plants with more than 450 workers and the capacity to expand to 1,500. “If the new government keeps its promises, I will set up a new plant with 3,000 workers within a year,” he says.These opportunities have helped curb the dark realities of life for many in the state — the trafficking and exploitation of tribal women, for instance. 73206534 “Our youngsters were migrating and facing exploitation of all kinds. We wanted to stop that. Moreover, after GST, we also realised that wage subsidy instead of capital subsidy makes more sense to create jobs and boost consumption,” recalls Ravi Kumar, director (industries), Jharkhand. Meanwhile, Sudhir Dhingra, chairman, Orient Craft, was exploring newer geographies to set up a plant. “Garment exports will only diminish in the existing big-city centres. Cheap labour in countries like Bangladesh and bilateral FTAs will make us uncompetitive. I took a long-term call and set up factory here,” he says. In the labour-intensive garment industry, wage cost is 30-35% of the topline. Orient Craft now runs 15 training centres in five districts of Jharkhand and has trained 6,442 workers so far. Orient Craft’s decisions were catalysed by the state government’s incentives. Besides assistance in land acquisition, which most state governments now offer, the biggest draw has been the wage subsidy. Haryana government offers Rs 3,000 wage subsidy, but only for workers from the state. “For our policy to work, we had to better the deal to lure exporters. Jharkhand was starting from scratch,” says a Jharkhand-cadre bureaucrat, who was involved in shaping the policy. Because it’s far from metros, unlike Haryana, Jharkhand knew the natives-only clause was not necessary.There were some concerns about the aggressive subsidy. The government estimated it would incur a maximum annual outgo of Rs 250 crore. “But we had larger emotional reasons. We wanted our youth to find jobs here and to curb stress-led migration,” says the bureaucrat. The government would also have factored in the consumption boost — at a conservative 10,000 direct jobs with Rs 8,000 average monthly salary, the sector already injects Rs 8 crore plus every month into the local economy. 73206544 Inspired by Orient Craft, others have joined in. “We have had the fastest ramp-up here. Workers are keen. Relatively, this is a very attractive destination for our sector,” says Kulin Lalbhai, executive director, Arvind Ltd. Says Gautam Nair, MD, Matrix Clothing: “We are happy in Ranchi. 92% of our workers are women. Now other states like Madhya Pradesh and Odisha offer incentives.” 73206547 Starting from scratch comes with its pros and cons. For the first time, Orient Craft’s Ranchi factory runs two shifts, with women working on the night shift, a move enabled by the government’s rethink on labour laws. Zero attrition, dedicated and disciplined workers and the flexibility to innovate in some of the manufacturing processes are a big plus. “Since you are starting on a clean slate, you can do things like starting the morning shift at 6 am. You can’t do that in Gurgaon. Nobody will come,” says Dhingra.A new greenfield plant also poses challenges. For example, productivity was low at 25% (of the global benchmark) in 2017. It has now risen to 40% and Dhingra hopes that in the next 4-5 years it should touch 70% — almost at par with NCR. Getting daily wagers to work in factories means tackling absenteeism, and inculcating discipline requires focused effort. 73206550 But as things fall in place, exporters and their buyers are happy. “Three years ago when we were approached to manufacture in Ranchi we were keen to take on the challenge. We are proud to have been able to work collaboratively on an M&S-compliant factory, which is doing great work. As one of the first international brands to source from Jharkhand we are passionate about the local community and have funded a research project that is promoting responsible migration,” says Nidhi Dua, head of India and Sri Lanka region, Marks & Spencer.As for exporters, they hope Jharkhand will keep its promises and thrust on the garment sector in the future as well.

from Economic Times https://ift.tt/39ZQMNx