Demonetisation has switched off Bhiwandi's power looms in 26 days

Updated: Dec 06, 2016, 10:44 IST | Benita Fernando and Faisal Tandel

Bhiwandi, a town where one-third of India’s textile is manufactured has acceded defeat to demonetisation as cash crunch forces power looms to stop whirring; labourers leave in droves for UP, Bihar, Rajasthan

Karimullah Ansari at a power loom in Wanjarpetti. The 65-year-old is prepping for his daughter’s Dec 22 wedding but hasn’t been able to convert the currency. Pics/Sameer Markande
Karimullah Ansari at a power loom in Wanjarpetti. The 65-year-old is prepping for his daughter’s Dec 22 wedding but hasn’t been able to convert the currency. Pics/Sameer Markande

For Suresh Kumar Mahato, this is not how he had planned his “vacation”. “We’ll do something back home. Some odd job, now and then,” says Mahato, who estimates his age to be somewhere between 20 and 22. Having worked as a labourer at a power loom unit in Bhiwandi’s Padma Nagar since 2004, starting when he may have been 10 or younger, every journey back home to Bettiah, in the West Champaran district of Bihar, meant shopping for clothes, soaps and hair oil to gift the children in his family. This time, he has managed to buy sweets but with great difficulty. They’ll understand, he’s sure, considering that demonetisation has cost him his job.

Also read: Security guards at ATMs and banks bear the brunt of demonetisation

Hanuman Tekdi, the red-light district of Bhiwandi, has also suffered. Clientele has dropped, and services are only being offered for Rs 500’s worth
Hanuman Tekdi, the red-light district of Bhiwandi, has also suffered. Clientele has dropped, and services are only being offered for Rs 500’s worth

It is Wednesday evening, when Mahato and his friends, Manoj Kumar Mandal and Sambhu Kumar Das, come for their last dinner at a bhissi (canteen) they have frequented for several years. Mandal says, “Of the 17 people who lived in our room, we are the last few who remain. The others have left Bhiwandi for their hometowns.” On Thursday evening, the trio, accompanied by 10 others, would have taken the Kushinagar Express, departing at 10.45 pm from Lokmanya Tilak Terminus, with a bag each that contains all – yes, all – their belongings.

On November 30, Mohamed Ansari (63) finished 11 years at this power loom unit in Bhiwandi. With 40 years of experience in the industry as a labourer, the recent demonetisation announcement has hit him badly. Unlike Ansari, several other labourers are leaving the town, which hosts 8 lakh out of the nation’s 21 lakh power looms
On November 30, Mohamed Ansari (63) finished 11 years at this power loom unit in Bhiwandi. With 40 years of experience in the industry as a labourer, the recent demonetisation announcement has hit him badly. Unlike Ansari, several other labourers are leaving the town, which hosts 8 lakh out of the nation’s 21 lakh power looms

And, they are not the first bunch to do so. In the last fortnight, Bhiwandi – dubbed the “Manchester of India” where reports estimate that 90 per cent of the population is connected to the power loom industry – has seen a mass exodus of labourers. The reasons vary, but are all connected to the demonetisation announcement of November 8, which made R500 and R1,000 currency bills invalid as legal tender. With labourers waiting to take the next train home to Bihar or Uttar Pradesh, the power loom units in Bhiwandi, from where a third of the textile that the country wears is manufactured, now either run on limited manpower or have come to a standstill.

Also read - Demonetisation: Wholesale veggie prices fall in cities; retail rates largely unaffected

Ashraf Ansari, 30, is one of the last of two labourers to stay back at the power loom unit he works at. His reason: he got paid in Rs 100 rather than in Rs 500 notes. With no bank account to fall back on, cash is the only hope for labourers like him in Bhiwandi
Ashraf Ansari, 30, is one of the last of two labourers to stay back at the power loom unit he works at. His reason: he got paid in Rs 100 rather than in Rs 500 notes. With no bank account to fall back on, cash is the only hope for labourers like him in Bhiwandi

For master and worker
En route to the office of advocate Rasheed Tahir Momin, an ex-MLA and co-owner of 400 power loom units in Bhiwandi, nationalised bank branches bear testimony to the situation. It is 22 days since Prime Minister Narendra Modi made the announcement. The bank shutters are down even while they are fully functional, with locals thumping away, asking to be let in. The lines snake around street corners with the police on crowd control duty. On November 13, the police lathi-charged customers at the State Bank of India branch to “avoid a stampede”.

“If I close the bhissi now then it means it is closed forever,” says Mohamed Husain, who runs a bhissi (canteen) in JP Nagar. A daily clientele of 70 labourers per meal, is now down to half that much. He manages by spending his Rs 500 notes on vegetables
“If I close the bhissi now then it means it is closed forever,” says Mohamed Husain, who runs a bhissi (canteen) in JP Nagar. A daily clientele of 70 labourers per meal, is now down to half that much. He manages by spending his Rs 500 notes on vegetables

While parts of Mumbai see shorter queues at ATMs and banks now, that is not the case at Bhiwandi. Here, it is still Day One since demonetisation.

Momin revels in Bhiwandi’s history – an old town of Maharashtrian and Konkani Muslims, which became a nagar palika as early as 1859. The Mumbai Agra National Highway also meant greater connectivity for the town. Reports state that out of the nation’s 21 lakh power looms, Bhiwandi hosts eight lakh (there may be more as the industry sees illegal units and employment) and is second to Surat in production. The first textile loom in Bhiwandi was set up in 1927 by Khan Saheb Samad Seth, now a local legend best recalled for his aphorism, “Sell gold and buy iron”.

Power loom seths Muzammil Momin and Rehan Momin show tokens and cheques from the day’s wait outside two banks. They were told to come the next day to change and withdraw Rs 4,000 and Rs 2,000 respectively. They state that unless they get change, they will not be able to pay their labourers
Power loom seths Muzammil Momin and Rehan Momin show tokens and cheques from the day’s wait outside two banks. They were told to come the next day to change and withdraw Rs 4,000 and Rs 2,000 respectively. They state that unless they get change, they will not be able to pay their labourers

Momin is one of those who lives by that saying but his power loom units, which are usually run by 15 labourers each, now makes do with two. “Here, we manufacture Indonesia cloth, made of texturised yarn (also known as polyester oriented yarn). We used to make 2,500 metres a day from each unit. Now, we manage 800 metres,” he says.

Furqan Bubere, who owns 450 power looms in the Wanjarpetti area in Bhiwandi, has a similar tale to tell. Where there used to be 25,000 metres produced each day, now it’s just 10,000 metres. “These looms used to run 24 hours, but most are shut all night now,” he says. Of his 85 labourers, more than half have left.

It is a hard time, observes Momin, for the industry, which has already taken a hit from cloth that gets manufactured for cheaper in Sri Lanka, China and Malaysia. “Their readymade cloth costs the same as our kachcha kapus,” he says. For a centre that grew as the mills of Girgaum fell in the 1980s, the times are perilous.

Need for change
At one of Momin’s units, which has 12 power looms, 30-year-old Ashraf Ansari is the last of the two labourers who have stayed back. Every month, Ansari is paid Rs 10,000 from which he pays Rs 400 as the rent for a room (a 100 sq ft space that he shared with nine others) and Rs 1,800 for the bhissi. The rest is sent home, after he makes do with a little for paan and chai. As the dusty power looms clatter and clang to bring out immaculate white polyester, Ansari says that the only reason he stayed back is because he got paid in Rs 100 notes instead of Rs 500 and Rs 1,000.

Ansari’s peers realised that the best way to change currency would be to go back home, where some have bank accounts. More importantly, it means not living Bhiwandi’s expensive life — where they have to shell out rent and bhissi charges — while they are short on useable currency. “I was home at Bhagalpur (in Bihar) for Eid al-Adha holidays. I had come to Mumbai on the day that the cancellation of notes was announced. We saw it on TV at the hotel nearby,” he says, with utterly no clue about the purpose of demonetisation.

It’s a similar story at Wanjarpetti’s units, where cotton cloth is manufactured. Karimullah Ansari, a bearded man with ageing eyes, had made preparations for his daughter’s wedding. The 65-year-old’s troubles began since demonetisation; he had booked a hall and a cook for the wedding. “The seth doesn’t have enough money to pay us in time and in change. All my savings in cash had to be changed as well. So, I went to the bank with my Aadhaar card, my election card and the wedding card as proof,” he explains. The bank, with little cash in its coffers, hasn’t been able to oblige. And about demonetisation? “They say it’s to do away with black money. But the netas are the ones who have black money and do you see them standing in lines like us?” he says.

Another labourer Abdul Gaffar Ansari (46), who works in the adjacent power loom unit, has been standing in bank queues every other day. Unfortunately, a day spent in the queue means a day away from work. As we chat with the labourers, news reaches us that there has been yet another lathi charge on people queuing up at a cooperative bank. Rumour has it that a labourer’s arm was fractured in the scuffle, but he was advised by friends not to register a complaint.

Bubere says that he has tried but failed. “We tried teaching labourers to open accounts but we can’t force them to. Because of the apparent hassle, they could lose interest in the job,” he says.

Meanwhile, on Saturday, Momin hosted a camp along with the textile joint secretary, Madhukumar Reddy, other members from the textile commissioner’s office and executives from Union Bank, Bank of India and Maharashtra Bank to help labourers open bank accounts. He says that the paperwork for 850 labourers has been initiated; 2,000 were turned away for lack of time. “It will take another week or so for these accounts to be opened,” he says. He recalls how members from the textile commission had come earlier to explain mobile banking to the labourers. “They don’t have smartphones and the ones that do have Android phones are charged for netbanking services. How can they spare these additional charges?”

The pall that looms over Bhiwandi, recall both seths and labourers, is reminiscent of the times when, in 2003, the central excise department office introduced central value-added tax. As power loom owners were asked to register, show documents and bills for every stage of production and file quarterly returns, several units chose to shut down instead. The ten per cent excise duty levied on grey cloth (as unfinished fabric is called here) was something the units just couldn’t afford. It was reported that 5 lakh workers left Bhiwandi that year to return to UP, Bihar and Rajasthan.

Collapse of an ecosystem
The power loom industry runs on a system of advances and loans. For instance, yarn is purchased with advances and paid in full when profits are made. Momin’s associate says, “The whole ecosystem of power looms in Bhiwandi has collapsed. We are losing money both at the production and sale ends.”

For power loom owners, the cash crunch has hit sales. They say that while the rate of cloth – which can be anywhere between Rs 10 to Rs 150, depending on the quality – has remained the same, there are fewer buyers in centers such as Surat and Ahmedabad. Bubere says, “New deals with textile manufacturers are not happening and we have started storing goods. The only way we are able to sell cloth is by accepting old notes of R500 and R1,000 – which is likely to be black money.”

But the shake in the system is felt the most at the local bhissi. For the labourers, the bhissi is more than just two hot meals a day. It is a communal space, a coming together of others like them. And, in between shifts that can range anywhere between 8 to 24 hours, the bhissi is all that comes between them working at the power loom and then bunking at their rooms.

When a bhissi stops functioning, labourers are affected, too, says Momin. Where will they go and eat? “They cannot afford a restaurant daily. A bhissi will only charge them about Rs 800-Rs 1,000 for a month,” he says. The closing down of bhissis across Bhiwandi – again due to demonetisation – has sent labourers packing back to their homes; if they can’t find a place to eat and subsist, then the next best option is home, not a restaurant. Some, like Mohamed Husain in JP Nagar, keep their bhissi running though clientele has been halved. Husain used to serve 70 labourers; now 35 turn up. While there is a board that warns about how meals on credit will not be served, Husain has let this slip in the last two weeks. “Several labourers have gone back home without paying up. But, if I close the bhissi now then it means it is closed forever,” he says, as he piles up rice and egg on a plate. The way he has managed to deal with Rs 500 notes: He buys vegetables and grocery worth Rs 400 using a Rs 500 note. He doesn’t receive the remainder Rs 100.

Over at Hanuman Tekdi, where Mahato and his friends have come for their last dinner, the bhissi owner – also named Karimullah Ansari like several others in Bhiwandi – makes phulkas on coal fire and says that he now makes 300 rotis per day instead of 500. “The last two weeks, over dinner, we have been talking about if this cancellation of notes is a good thing or a bad thing,” says Mahato. When we ask them to show us their phones, we see that they are as basic as they can get – a Lava and strangely one called Provogue. “We don’t keep expensive smartphones with us ever, even if we could save up and afford them. The job is such that we are either sleeping or manning the looms; someone will easily flick these phones,” he says.

Hanuman Tekdi is infamous for five intersecting lanes which function as a red-light area. The sex workers here say that the demonetisation and the diminishing labourer population has affected them. Gauri (name changed) who has been a sex worker there for the last 25 years, says that the only way they have been able to counter demonetisation is to tell customers that they either get an evening worth R500 or not at all. Rupees two hundred, what they usually charge their clients, will just not be feasible anymore.

'Not enough cash coming in'
Anil Kumar, Branch Manager, State Bank of India, Bhiwandi branch, a resident of Colaba, says they are doing their best to address the concerns of their customers. He says that in the past two years, their 25 business correspondents have enrolled around one lakh bank accounts from Bhiwandi and surrounding rural areas, under the Jan-Dhan Yojana. These accounts also include power loom workers.

The challenge of enrolling migrant power loom labourers for bank accounts comes in the form of lack of documentation and resistance, he says. “As they have accounts back home in their villages, they don’t want to open new accounts here,” explains Kumar. He adds that post the November 8 announcement 1,000 new accounts were opened to help people. With a team of 14 people and a security guard, Kumar says that this month has been hectic. “It’s not just the customers but we have also had to deposit cash from government challans, ration card scheme, post offices and co-operative banks in the area,” he says.

The Bhiwandi lines move slowly, he says, because the illiterate power loom labourers need help every step of the way, right from filling forms for withdrawal to KYC forms.

The State Bank of India allows a customer to withdraw Rs 24,000 a week. But, Kumar complains that while cash has been sent to Bhiwandi, it is not enough to meet the demand. “We have currency notes of Rs 100 and Rs 2,000. We have not received Rs 500 notes.”

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