Surat Textile Industry facing the problem of shortage of labour

Submitted by SONIYA PANDEY (O2) NIKITA PATEL (16) UNNATI PASSWALA (48) MANISHA VAGHELA (33)
Submitted to:-

Dr. MANISHA PANWALA

INDUSTRY PROFILE
Surat, an emerging city in the state of Gujarat, is known as the textile city of Gujarat. And, the epithet is perfectly suited to the city. The textile industry is one of the oldest and the most widespread industries in Surat. A major part of the citys population is associated with the textile industry The textile industry in Surat is mainly engaged in the activities of yarn production, weaving, processing as well as embroidery. Surat is well known for its synthetic products market. It is mainly engaged in the production and trading of synthetic textile products. Nearly 30 million metres of raw fabric and 25 million metres of processed fabric are produced in Surat daily. Zampa Bazaar, Bombay Market, JJ Textile Market and Jash Market are among them. Katar Gam, Magdalla and Udhana are the areas of Surat where manufacturing is mainly concentrated. In the course of time, people from various other places like Rajasthan and Kolkata settled in Surat in order to carry out their textile business. Brands from Surat.

Cont ..
The famous brands of Garden and Vimal textiles evolved from Surat. A few other brands like Parag and Prafful from Surat did become famous for a short time, but failed to create a lasting impression in the market. Major markets. The main market for Surats textile products are India and other Asian countries. Around 90% of polyester used in India comes from Surat. However, international demand for its products is not very significant. The Middle East is the major export market for Surats textile products. According to experts, more improvisation in the quality is required to cater to the demands of the international market. Growth. The Surat textile industry has grown considerably over time. As per recent figures, textile production in Surat has grown by 10% in the last 5 years, while the market for embroidery has grown from an almost negligible amount to around Rs. 30000 million over the same period.StrengthsOne of the main reasons behind the growth of Surats textile industry is the citys ability to adapt to changes and the latest trends. The city is quick to respond to any changes in the preferences of people.

Major Textile Players

Raymonds
Vardhaman Spinning Arvind Mills

Reliance Textiles

REASEARCH METHDOLOGY
(A) PROBLEM STATEMENT : SURAT TEXTILE INDUSTRY FACING THE PROBLEM OF LABOUR SHORTAGE

(B) RESEARCH OBJECTIVES 1. To understand what are the underlying reasons for the emergence of the labour shortage in industry. 2. To understand how labour shortage in industry affect the performance of the company. 3. To understand the extent to which company has been successful in cutting down labour shortage. 4. To offer suggestions and recommendations to manage the labour shortage in industry.

Variables
Nature of manufacturing

Potential demand
Revenue loss Increase in wages rate Turnover of the company No. of employees Working condition

C) RESEARCH DESIGN OF THE STUDY: i. Types of study:

Cont.

The type of the research study is descriptive type. ii. Sources Of The Data: The study includes both primary and secondary data: Primary Source: The primary data was collected by the way of well framed Questionnaire. Questionnaire was administered to gather the information relating to Labour Shortage from the managers and the employees of Surat textile industry Secondary Source: The sources of secondary data in the proposed study will be academic journals, trade magazines, Government of India Textile Ministry Reports, Indian Textile and Clothing Exports Association Reports, Indian Chambers of Commerce and Industry (FICCI) Reports, Confederation of Indian Industries (CII) Reports and various other related private and public reports.

Cont.
Iii. Sampling Plan: Population Size: The population size is the Labours of Surat textile industry. Sample Frame: The sample frame is up to a Surat city only. Sample Size: 80 Managers and worker of Surat textile industry

Sample Method: Non-probabilistic and Convenience sampling.

iv. Benefits of study:Beneficiary of this project is to the company, to overcome the labour shortage in the dimension in which they are lagging. Key findings and analysis will helpful to them for provide better services to workers. For researchers, to know the competitive advantage of the company and their strategy

Cont ..
iv. Benefits of study:Beneficiary of this project is to the company, to overcome the labour shortage in the dimension in which they are lagging. Key findings and analysis will helpful to them for provide better services to workers. For researchers, to know the competitive advantage of the company and their strategy v. Plan of analysis: The data collected is raw and it is complied, classified, tabulated and then analyzed using financial techniques and statistical tools. Graphs and charts are used to highlight the statistics. Based on these data and analysis, inferences were drawn. LIMITATIONS: Due to time constraint depth analysis could not be made. Some of the information is considered confidential and not available for the study. The data taken for interpretation is for a limited period.

Data Analysis and Interpretation:

Q.1 Nature of Manufacturing

Interpretation: As per our research we were getting response from 54 % embroidery unit, 40% from Looms and rest 6% from printing mills

Cont ..
Q. 2 Do you believe that Surat Textile industry facing the problem of labour Shortage?
1% 1%

Strongly Agree Agree 43% 55% Neutral Disagree

Interpretation: From above graph we can say that majority of respondent agree with surat textile industry facing the problem of labour shortage, out of them 55 % respondent strongly agree and 43 % agree .1 % respondents are disagree who are covered under the category of corporate firm.

Cont ..
Q.3 Is your organization facing shortage of labour?

Interpretation: As the above chart shows, sweeping majority of 93.75 % of survey have indicate that they are unable to find number of worker for running their operation .

Cont ..
Cross tabulation between Q. 1and Q. 3
Nature of Manufacturing * Is your organization facing shortage of labour? Cross tabulation Count Nature of Manufacturing Is your organization facing shortage of labour? Total

Yes
Embroidery Looms Printing mills Total 42 29 4 75

No
1 3 1 5 43 32 5 80

Interpretation: When we cross tabulate above two question we conclude that 56 % embroidery unit facing the problem of labour shortage, followed by 38.66 % looms unit and 5.33 % printing mills facing problem of labour shortage.

Cont ..
Q. 4 Are you finding it difficult to meet potential demand due to labour shortage?

Interpretation: Organisation has also reported that they have started facing the brunt of this shortage in the form of slippages in meeting confirmed orders. About 96% of the respondents said that they have been unable to fully meet the potential demand for their products in the market due to labour shortage. And 4% respondent does not find any difficulty to meet the order.

Cont .. Q.5 Please, mention the extent of revenue losses? Percent

More than 10 % 52.5

Between 5 % to 10 %

38.8

Percent

Less than 5 %

8.8

10

20

30

40

50

60

Interpretation: When asked to comment on the extent of potential loss due to shortage of labour, nearly half of the participating firms said that their potential losses are to the extent of more than 10 % of their demand. 39% respondent said that they losses revenue between 5% to 10% and only 9% respondent losses revenue less than 5%.

Cont.
Cross tabulation between Q. 1and Q. 5
Nature of Manufacturing * Please, mention the extent of revenue losses? Cross tabulation Count Please, mention the extent of revenue losses? Between 5 % to 10 Less than 5 % Total More than 10 %

%
20 7 4 31

Embroidery Nature of Manufacturing Looms Printing mills Total

0 7 0 7

23 18 1 42

43 32 5 80

Interpretation: From the above table we can conclude that 23 respondent out of 43 respondent losses its revenue more than 10%, followed by 20 respondent out of 43 respondent losses its revenue with extent between 5% to 10% in embroidery units. In looms units 18 respondent out of 32 respondent losses revenue more than 10%.

Cont.
Q.6 Are you seeing an increase in wage rates due to shortage of labour?

Frequency

Percent

Valid Percent

Yes

80

100.0

100.0

Interpretation: While the problem of not being able to meet potential demand is one aspect, another related aspect is the upward pressure on wages that is now pervasive. As the above table shows, 100% of the surveyed firms have reported that they have seen an increase in wages due to shortage of labour.

Cont.
Q.7 Mention, the extent of increase in wages?

Percent
More than 10 % 58.8

Between 5 % to 10 %

33.8

Percent

Less than 5 %

7.5

10

20

30

40

50

60

70

Interpretation: When asked to comment on the extent of increase in wages due to shortage of labour, nearly 59% of the participating firms said that their potential losses are to the extent of more than 10 % of their demand. 34% respondent said that increase in wages is between 5% to 10% and only 8% respondent said that increase in wage is less than 5%.

Cont.
Cross tabulation between Q. 5 and Q. 7

Please, mention the extent of revenue losses? * Mention, the extent of increase in wages? Crosstabulation Count Mention, the extent of increase in wages? Less than 5 % Less than 5 % Please, mention the extent of revenue losses? Between 5 % to 10 % More than 10 % Total 4 0 6 19 3 27 8 39 47 31 42 80 2 Between 5 % to 10 % 5 0 7 More than 10 % Total

Interpretation: From the above table we can said that nearly half of the respondent believed that they losses their revenue more than 10% due to increase in wages more than 10%. Only 2.5% respondent said that they losses their revenue less than 5% due to increase in wages in less than 5%.

Cont
Q. 8 what was your annual turnover for the year?

Percent
More than 1 crore 22.5

0.71-1 crore

35 Percent

51-70 lakh

33.8

0-50 lakh 0 5

8.8 10 15 20 25 30 35 40

Interpretation: As per above chart, we can see 35% respondent have annual turnover between 71 lakh to 1 crore which was followed by 34% respondent have turnover between 51-70 lakh. we also said that textile unit has high turnover.

cont.
Cross tabulation between Q. 5 and Q. 8
Please, mention the extent of revenue losses? * What was your annual turnover for the year? Crosstabulation

Count What was your annual turnover for the year? 0-50 lakh 51-70 lakh 0.71-1 crore More crore Please, mention the extent of Less than 5 % revenue losses? Between 5 % to 10 % 2 4 1 17 2 8 2 2 7 31 than 1 Total

More than 10 % Total

1 7

9 27

18 28

14 18

42 80

Interpretation: By this cross tabulation we observed that nearly 43% organization has the annual turnover between Rs. 71 lakh to Rs. Crore and they losses revenue more than 10% due to problem of labour.

Cont
Q.9 How many employees does your company have

Interpretation: From the above bar chart, we see that 56% respondent have an employee between 10-49 and 25% respondent have a less than 10 employee in the units. Only 4% organisation has a more than 100 employee.

Cont. Q. 10 Please, Place a tick mark against any of the following reason that may have caused your labour shortage?

14% 29%

Insuficient payment Amount of work Working Hours Working condition 19% Relocation of other area Problem with management

10% 14% 6% 4%

Location of Organisation 4% Government scheme of employment

Interpretation: From the above pie chart, we can conclude that 29% organisation believed that government scheme of employment is the major cause of labour shortage. This scheme provide the employment in their native place, so the less migration of worker cause the labour shortage

Q.11 Please use the key below to rate the working condition

Cont..

Interpretation: When we asked for the working condition for the employee majority of units said that they have excellent to good working condition. out of 80 respondent 50% believed that they has a excellent working condition.

Q. 12 How many shifts are there for the employees?

Cont.

Interpretation: When we asked the How many shifts are there for the employees?, 97.5% respondent said that they have two shift for the employee, one for day and another for night. This two shift timing is for 12 hours respectively which is illegal as per the factory act.

Q.13 How are you trying to minimize the impact of shortage of labour?

Cont.

Responses N
7% 29% 30% 11% 23% Offering special training to unemployed youth and hiring them for company operation Offering better benefits and working environment to new recruiters Introducing incentive scheme like Attendance bonus scheme

Increasing Shift timing

Going for greater mechanization

Interpretation: From the above chart we can conclude that 30% organisation minimise the problem through Offering better benefits and working environment to new recruiters, followed by 29% through Going for greater mechanization and 23% units minimize impact through Introducing incentive scheme like Attendance bonus scheme.

Findings and Recommendations

Findings we can say that majority of respondent agree with surat textile industry facing the problem of labour shortage, out of them 55 % respondent strongly agree and 43 % agree .1 % respondents are disagree who are covered under the category of corporate firm. . About 96% of the respondents said that they have been unable to fully meet the potential demand for their products in the market due to labour shortage. 53% respondent said that their potential losses are to the extent of more than 10 % of their demand. 39% respondent said that they losses revenue between 5% to 10% and only 9% respondent losses revenue less than 5%.

100% of the surveyed firms have reported that they have seen an increase in wages due to shortage of labour.
We can see 35% respondent have annual turnover between 71 lakh to 1 crore which was followed by 34% respondent have turnover between 51-70 lakh. We also said that textile unit has high turnover.

We see that 56% respondent have an employee between10-49 and 25% respondent have a less than 10 employee in the units. Only 4% organisation has a more than 100 employee. We can conclude that 29% organisation believed that government scheme of employment is the major cause of labour shortage. This scheme provides the employment in their native place, so the less migration of worker causes the labour shortage. Amount of work and insufficient payment also the cause for the labour shortage. 97.5% respondent said that they have two shift for the employee, one for day and another for night. This two shift timing is for 12 hours respectively which is illegal as per the factory act. 30% organization minimize the problem through Offering better benefits and working environment to new recruiters, followed by 29% through Going for greater mechanization and 23% units minimize impact through Introducing incentive scheme like Attendance bonus scheme.

Cont .

Many of the survey participants mentioned that they have to accept unavoidable delays in delivery schedules, cut down on orders and even reduce production capacity at times due to scarcity of workers.

Recommendation
One of the criticisms of the MGNREGA is that it has not been implemented uniformly across states and may have created a piquant situation of enhancing the divide between the states. The government should make some changes in the MGNREGA scheme to make the impact smore uniform and distributed across states and industries. The scheme should be implemented during the non-peak agricultural season only. The work done in industrial units can also be considered for coverage under MGNREGA. This will be particularly useful in areas where there is heavy concentration of industrial activity. State governments must not make it mandatory to hire workers from within the state. Free movement of workers across states should be encouraged. Workers are available and if you pay a decent salary they are willing to work regularly, they are willing to stay with you. So, we have to rework our economics based on the minimum salary which is required by the workers. It used to be around Rs. 60-70 around five years ago, today its about Rs. 250. So, if we work on our economics based on Rs. 250 and design our production systems accordingly then there should be no problem.

Conclusion
An analysis of the survey results shows Surat textile industry is facing a serious problem with regard to availability of labor. This view has been supported by an overwhelming majority of the survey participants. Further, several companies have reported that their workers have started demanding higher wages and that companies are already beginning to face difficulties in terms of meeting confirmed orders on account of shortage of workers. Despite having a favorable demographic profile, labor and skill shortage continues to be one of the key concerns for the Indian industry. This problem has been compounded by the NAREGA and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). It seems that MGNREGA has made a perceptible difference to the choice of work of the casual labor in rural and semi urban areas. Going by the survey results, we believes that the government should make some changes in the MGNREGA scheme to make the impact more uniform and distributed across states and industries. In textile Industry the shortage of employees are seasonal, as all the employees during the time of harvestings and festival left the cities and migrate home, during this period the textile industry has to bear the production stoppage.

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