Ut­tar Pradesh has bet­ter fa­cil­i­ties and in­fra­struc­ture to man­u­fac­ture and ex­port gar­ments than Bangladesh...

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In the last few years, it has be­come a prac­tice for State Gov­ern­ments to or­ga­nize business con­claves to fa­cil­i­tate in­vest­ment for var­i­ous in­dus­tries. These much-hyped business con­claves may be bring­ing in some promised in­vest­ment, but have failed to gen­er­ate de­sired number of em­ploy­ment op­por­tu­ni­ties to the masses who are un­e­d­u­cated and un­em­ployed. The state of UP is again stand­ing at the thresh­old of the next UP In­vestor’s Sum­mit (UPIS) 2018, to be held on 21st and 22nd Fe­bru­ary. But is the State Govern­ment it­self aware that it can im­prove the plun­der­ing econ­omy of the state by giv­ing a lit­tle more con­sid­er­a­tion to the gar­ment man­u­fac­tur­ing and ex­port in­dus­try? We all agree that big ticket projects are equally re­quired, but cer­tainly not at the ex­pense of a large em­ploy­ment gen­er­at­ing in­dus­try like gar­ment­ing... An an­a­lyt­i­cal take by our Ed­i­tor-in-Chief.

Ad­van­tages of Ap­parel In­dus­try

To its ad­van­tage, the gar­ment man­u­fac­tur­ing in­dus­try is not cap­i­tal-in­ten­sive, a mere US $ 200 (Rs. 10,000) in­vest­ment on a sewing ma­chine can give em­ploy­ment to around 2 peo­ple (in ac­cor­dance to in­dus­try stan­dards, man-ma­chine ra­tio is 1:1.75 and at some places, it is even higher at 1:2.5) by train­ing them for just 8 days (even if some might put the days as 30); these freshly trained peo­ple can be put on to lines. So, an in­vest­ment of US $ 100 mil­lion has the po­ten­tial to give em­ploy­ment to around 1 mil­lion (10 lakh) peo­ple. Con­sider the im­pact that bil­lion dol­lars can have on the em­ploy­ment of this in­dus­try while the in­vest­ment of bil­lion dol­lars in car man­u­fac­tur­ing in­dus­try may not cre­ate even 5,000 jobs (I have not con­sid­ered the an­cil­lary in­dus­try since I know that tex­tile and ap­parel in­dus­try would re­quire mul­ti­ple en­trepreneurs to ad­dress the needs of the in­dus­try as com­pared to the car an­cil­lary in­dus­try).

How­ever much one may ar­gue that man­u­fac­tur­ing is mov­ing back to the west, as cost of pro­duc­tion in­creases in Asia, but I would still give this in­dus­try about an­other 15-20 years’ time be­fore it re­ally moves back to the de­vel­oped na­tions, and there is wide spread adop­tion of au­to­ma­tion and ro­bot­ics even in a coun­try like ours, which takes away the mass jobs. It would be in­ter­est­ing to note that the number of un­em­ployed youth in Ut­tar Pradesh in the age group of 15-35 years as per the

66th round of the Na­tional Sam­ple Sur­vey Or­ga­ni­za­tion (NSSO) re­port is es­ti­mated to be a whop­ping 10 mil­lion, and this number can be dras­ti­cally re­duced or re­moved with an in­formed in­vest­ment ini­tia­tive in the gar­ment­ing in­dus­try.

UP is a prom­i­nent agri­cul­ture state and to­day with agri­cul­ture be­com­ing more tech­nol­ogy-de­pen­dent, it would be re­quir­ing much less man­power to work on the fields. The NSSO re­port also shows that there was a net de­cline of 4.9 mil­lion (49 lakh) agri­cul­tural work­ers in the last five years in Ut­tar Pradesh and this is only go­ing to in­crease with more and more peo­ple in agri­cul­ture find­ing less and less jobs in their fields and mov­ing on to other man­u­fac­tur­ing sec­tors, which though con­sid­ered as the cor­ner­stone of the econ­omy, have grown at snail’s pace of only 1.64%, show­ing very lit­tle chances of cov­er­ing up the grow­ing em­ploy­ment shortfall.

Apart from erad­i­cat­ing un­em­ploy­ment, the in­vest­ment and sup­port to the gar­ment man­u­fac­tur­ing and ex­ports in­dus­try would also add sub­stan­tially to the state’s eco­nomic po­si­tion­ing. The per­spec­tive to be kept in mind is that the in­vest­ment of a mere US

$ 100 mil­lion on ma­chines also helps to gen­er­ate an ex­port turnover of around US $ 4 bil­lion (Rs. 24,000 crore) a year, a dou­ble gain for the Cen­tre and the State.

Why Ut­tar Pradesh as a case study?

Firstly, and most im­por­tantly, the gar­ment in­dus­try is wide­spread in Ut­tar Pradesh – Noida in knit­ted and wo­ven dresses; Meerut in sports goods; Kan­pur in kidswear; and Luc­know in In­dian eth­nicwear – are few among the im­por­tant nat­u­ral and man-made gar­ment and tex­tile clus­ters/hubs for gar­ment man­u­fac­tur­ing. (Here it is essen­tial for us to un­der­stand that it is easy to pig­gy­back the al­ready ex­ist­ing clus­ter rather than cre­ate new clus­ters). Al­ready around 1.5 mil­lion (15 lakh) work­ers in some form or the other are as­so­ci­ated with the in­dus­try and it would not re­quire much ef­forts to bring up the in­dus­try.

Sim­i­lar­ity of Bangladesh to Ut­tar Pradesh

I think the ideal sit­u­a­tion would be to fol­low the Bangladesh model which was ear­lier the US and Euro­pean model of growth as well, rather than the Gu­jarat and other state business mod­els which in­vite for­eign in­vest­ments through the big spend­ing con­claves for cap­i­tal in­ten­sive in­dus­tries… Let’s draw some com­par­isons, putting our sub­mis­sion in per­spec­tive. The to­tal pop­u­la­tion of Ut­tar Pradesh is 199.5 mil­lion, ac­cord­ing to the cen­sus of 2011, whereas Bangladesh is ap­proach­ing the 159.5 mil­lion mark with un­skilled work­ers form­ing the ma­jor force in both the places.

Even the sur­face area of 1,47,570 sq. km. of Bangladesh com­pares well to 2,43,290 sq. km. in Ut­tar Pradesh.

Ad­van­tage: Ut­tar Pradesh

I can go on to put forth many sim­i­lar­i­ties and ad­van­tages in per­spec­tive, but the ma­jor one is its ex­ist­ing in­fra­struc­ture of 500 tex­tile train­ing cen­tres such as NITRA, NIFT, Pearl, AMITY, NIFD, IIFT, ATDC and 300 ITIs spread all across the state pro­vid­ing mid­dle-level as well as shopfloor level ed­u­ca­tion and train­ing for the gar­ment in­dus­try. It is by all means much more than Bangladesh. Add to this the Govern­ment of In­dia’s bud­getary pro­vi­sion of 2,000 crore to­wards skill de­vel­op­ment. We all know that Bangladesh lacks in its fabric pro­duc­ing ca­pa­bil­ity, but strate­gi­cally they have con­verted this weak­ness into their strength by im­ple­ment­ing poli­cies to im­port the best of fab­rics at the best of price from all parts of the world and add fur­ther value to this by con­vert­ing the fab­rics to gar­ments for ex­port. Thus, suc­cess­fully cre­at­ing em­ploy­ment op­por­tu­ni­ties and the re­quired for­eign ex­change!

Whereas, UP as an in­te­gral part of In­dia has the ad­van­tage of a strong tex­tile in­dus­try, as the coun­try is the sec­ond largest pro­ducer of cot­ton, with the sec­ond largest spin­ning ca­pac­ity and the third largest fabric pro­duc­ing cen­tre. How­ever, the coun­try has still not been able to sup­port its front end suf­fi­ciently be­cause of its treat­ing the tex­tile sup­ply chain as four sep­a­rate iden­ti­ties which are: Cot­ton pro­duc­tion, Spin­ning, Weav­ing and Gar­ment­ing.

To re­it­er­ate, if a lit­tle fo­cused at­ten­tion is given by the Govern­ment of UP to­wards the state’s la­tent po­ten­tial as a gar­ment man­u­fac­tur­ing hub, it can be the rich­est and most pow­er­ful state in the coun­try…

But the sim­i­lar­ity ends here

While Ut­tar Pradesh em­ploys only

1.5 mil­lion in gar­ment and tex­tile for an an­nual ex­port of not more than US $ 2 bil­lion, Bangladesh em­ploys 5 mil­lion to fetch ex­ports to the tune of US $ 20 bil­lion. Ev­ery­one knows how Bangladesh has risen over the last 10 years rid­ing the band­wagon of a boom­ing global gar­ment trade, driven by a ded­i­cated work­force backed by un­clench­ing Govern­ment sup­port to gain a per capita in­come of US $ 1,190. On the other hand, a tech­ni­cally more re­source rich Ut­tar Pradesh has per capita of only US $ 605; even In­dia with all its frills has a per capita of just US $ 1,720.

One would ask why the in­dus­try has not flour­ished on its own in Ut­tar Pradesh

Here I would like to lay out few prob­lems the in­dus­try faces to­day in UP. The points dis­cussed are with­out any prej­u­dice to any­one or the sys­tem.

It is no se­cret that ex­port­ing gar­ments to­day is a tough business,

as be­sides be­ing com­pet­i­tive, one also has to work un­der all kinds of com­pli­ance norms (not only social and en­vi­ron­men­tal but also tech­ni­cal) stip­u­lated by the buy­ers, which in­ci­den­tally are ba­sic com­pli­ance re­lat­ing to ‘the law of the land’. Sadly, the in­dus­try is strug­gling to be com­pli­ant and is daily fac­ing the wrath of in­spec­tors from all kinds of Govern­ment depart­ments, po­lice and lately the goons of the po­lit­i­cal class. Though it is claimed that the state is elec­tric­ity sur­plus, there is no reg­u­lar elec­tric­ity. Wa­ter is al­ways a prob­lem and it’s go­ing to be big­ger prob­lem in time to come. I can go on with many other bot­tle­necks in­clud­ing filth and dirt all around the in­dus­trial ar­eas or clus­ters which is a com­plete eye­sore for the vis­it­ing for­eign buy­ers. They all re­quire cer­tain min­i­mum hy­giene, but these is­sues can be ad­dressed at the lo­cal level…

UP has fi­nally got its own tex­tile pol­icy, but the most sur­pris­ing fact is that even af­ter the an­nounce­ment of the tex­tile pol­icy, the State Govern­ment has taken no ac­tive mea­sure to pro­mote and cre­ate aware­ness of the in­cen­tives of­fered. Other states like Gu­jarat, MP, Ma­ha­rash­tra, Ra­jasthan, Odisha, Jhark­hand and even their western and eastern neigh­bours

A head-on com­par­i­son be­tween UP and Bangladesh on crit­i­cal pa­ram­e­ters

Varanasi silk has be­come the hall­mark of UP tex­tiles

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