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ACKNOWLEDGMENT
The success of any task relies on the efforts made by person but it cannot be achieved without cooperation of other persons which are being helpful. So we would like to thank SMT. S. R. Luthra Institute of Management for giving me the opportunity of doing this project as special subjects and provides such as wonderful platform to represent ourselves as M.B.A. students. Our acknowledgement remains incomplete without great thanking to those people who provided us with invaluable help directly or indirectly in all form during our endeavours. As an institute side, it is our great pleasure to have this opportunity to express my regrets and sense of gratitude to my Faculties. It is due to their encouragement, valuable guidance and direction for this project work which would not be finished without their help. We could not miss my honourable Director Mr. A. S. Charan for his help and support. Ours deep sense of gratitude to all teaching and non teaching staff of SMT. S. R. Luthra Institute of Management for their co-ordination. We delivered our special thanks to family members and friends for their constant support during the project.
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EXECUTIVE SUMMARY
This report gives information about the Surat textile industry facing the problem of labour shoratge . The study focus on the use of primary source of data to obtain data through questionnaires to managers and workers. The research design of study is descriptive type as to deal with some specific problems and come out with some possible solutions.
The method of analysis is done by filling up questionnaires by managers and employees which helps to find out the Reason of surat textile industry facing the problem of labour shortage.
After careful analysis it can be find out that the strategy can be adopted to reduce the labour shortage in suart textile industry. It can also find out different government scheme affect the labour shortage.
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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. The city has several textile markets that exist since times immemorial. 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. 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.
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REVIEW OF LITERATURE
The Indian textile and clothing industry is confronted with huge shortage of labour, which has made the textile manufacturers in the country face some serious production issues.
Tolani Indra K, Chairman, Kamal Export house, also added, "The industry is facing lot of challenges with the skilled labour. And these days due to the NREGA scheme it is hard to find workers. In fact, there is also shortage of skilled labour in the county, which needs an immediate attention." "As India has tough labour conditions, it is affecting India's textile and clothing industry in creating value-added products. Every worker is demanding increments as well. The things are getting expensive for us." Tolani said. In fact, V.K.Ladia, Chairman ,
The Synthetic and Rayon Textile Export Promotion Council (SRTEPC) also mentioned, "We are going into automation. As far as my industry is concerned I can tell you that earlier the employment has been to an order of 3.8 per thousand spindles which is now at 2.7-1.8 per thousand spindles."
In fact, D.K Nair, Secretary General, Confederation of Indian Textile Industry (CITI) said, the industry is growing but the workers are not growing potentially. The industry will need more workers in the coming years. "We are also working on a skill development initiative to ensure that sufficient skilled workers are available for the concerned industry," Nair added. According to the Annual Report 2009-10 of the Ministry of Textiles, the Indian textile industry contributes about 14 per cent to industrial production, 4 per cent to the country's gross domestic product (GDP) and 17 per cent to the countrys export earnings. (Source: Namrata Kath Hazarika, SME Times | 10 Feb, 2011)
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REASEARCH METHDOLOGY
(A) PROBLEM STATEMENT :
SURAT TEXTILE INDUSTRY FACING THE PROBLEM OF LABOUR SHORTAGE
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.
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Population Size: The population size is the Labours of Surat textile industry.
iv. Benefits of study:dimension in which they are lagging. etter services to workers.
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.
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Data Analysis
Q.1 Nature of Manufacturing
of
Frequency 43 32 5 80
Interpretation: As per our research we were getting response from 54 % embroidery unit, 40% from Looms and rest 6% from printing mills.
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Surat Textile industry facing the problem of labour shortage Q. 2 Do you believe that Surat Textile industry facing the problem of labour
Shortage?
Frequency 44 34 1 1 80
1%
1%
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.
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Surat Textile industry facing the problem of labour shortage Q.3 Is your organization facing shortage of labour?
Frequency 75 5 80
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 .
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Surat Textile industry facing the problem of labour shortage Cross tabulation between Q. 1and Q. 3 Nature of Manufacturing * Is your organization facing shortage of labour? Cross tabulation Count Nature Manufacturing of Is your organization facing shortage of labour? Yes Embroidery Looms 42 29 No 1 3 1 5 43 32 5 80 Total
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.
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Surat Textile industry facing the problem of labour shortage 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.
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Surat Textile industry facing the problem of labour shortage 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%.
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Surat Textile industry facing the problem of labour shortage 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? Less than 5 % Embroidery Nature Manufacturing Total of Looms 0 7 Between 5 % More than 10 Total to 10 % 20 7 4 31 % 23 18 1 42 43 32 5 80
Printing mills 0 7
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%.
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Surat Textile industry facing the problem of labour shortage Q.6 Are you seeing an increase in wage rates due to shortage of labour?
Frequenc y Yes 80
Percent 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.
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Surat Textile industry facing the problem of labour shortage 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%.
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Surat Textile industry facing the problem of labour shortage 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 Between % Please, mention the extent losses? Total of revenue Less than 5 % Between 5 % to 10 % More than 10 % 2 4 0 6 % to 10 % 5 19 3 27 5 More 10 % 0 8 39 47 7 31 42 80 than 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%.
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Surat Textile industry facing the problem of labour shortage Q. 8 what was your annual turnover for the year? Frequency 0-50 lakh 51-70 lakh 0.71-1 crore More than 1 crore Total 7 27 28 18 80 Percent 8.8 33.8 35.0 22.5 100.0 Valid Percent 8.8 33.8 35.0 22.5 100.0
Percent
More than 1 crore 22.5
0.71-1 crore
35 Percent
51-70 lakh
33.8
0-50 lakh 0
8.8 10 20 30 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.
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Surat Textile industry facing the problem of labour shortage 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 Please, mention the Less than 5 % extent losses? of 2 51-70 lakh 1 17 0.71-1 crore 2 8 More than 1 crore 2 2 7 31 Total
9 27
18 28
14 18
42 80
Total
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.
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Surat Textile industry facing the problem of labour shortage 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.
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Surat Textile industry facing the problem of labour shortage Q. 10 Please, Place a tick mark against any of the following reason that may have caused your labour shortage?
Caused of labour shortage Frequencies Responses N Insufficient payment Amount of work Working Hours Working condition Relocation of other area Problem with management Location of Organisation Government employment Total scheme of 27 35 27 7 12 8 19 55 190 Percent 14.2% 18.4% 14.2% 3.7% 6.3% 4.2% 10.0% 28.9% 100.0% Percent of Cases 35.5% 46.1% 35.5% 9.2% 15.8% 10.5% 25.0% 72.4% 250.0%
Insuficient payment 14% 29% Working Hours 19% Working condition 10% 4% 14% 6% 4% Problem with management Relocation of other area Amount of work
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. Department of Business and Industrial Management Page 21
Surat Textile industry facing the problem of labour shortage Q.11 Please use the key below to rate the working condition
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.
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Surat Textile industry facing the problem of labour shortage Q. 12 How many shifts are there for the employees?
Frequency 1 2 Total 2 78 80
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.
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Surat Textile industry facing the problem of labour shortage Q.13 How are you trying to minimize the impact of shortage of labour?
Responses N Offering special training to unemployed youth and hiring them for company 12 operation Offering better benefits and working $Q14 environment to new recruiters Introducing incentive scheme like Attendance bonus scheme Increasing Shift timing Going for greater mechanization Total 54 30.5% 6.8% Percent
40 19 52 177
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
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. Department of Business and Industrial Management Page 24
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.
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Surat Textile industry facing the problem of labour shortage 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. 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.
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Surat Textile industry facing the problem of labour shortage 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 more 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.
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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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The Hindu Chandigarh, June 27, 2011 Namrata Kath Hazarika, SME Times | 10 Feb, 2011 Melvyn Thomas, TNN Apr 4, 2011, 10.54pm IST, Times of India Marianne Curtis, Mon Jun 27 2011) http://www.ficci.com/Sedocument/20165/FICCI_Labour_Survey.pdf News paper Article/Magazine
Website
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Annexure
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Surat Textile industry facing the problem of labour shortage QUESTIONNAIRE We are students of M.B.A., From Department of business and Industrial management . We are doing this research titled, SURAT TEXTILE INDUSTRY FACING THE PROBLEM OF LABOUR SHORTAGE. This study is only for academic purpose and we promise you that information provided by you, will never disclose to anyone under any circumstances.
1. Nature of Manufacturing
___________________
2. Do you believe that Surat Textile industry facing the problem of labour Shortage?
Strongly Agree Agree Neutral Disagree Strongly disagree
4. Are you finding it difficult to meet potential demand due to labour shortage?
Yes No
9.
How many employees does your company have? < 10 10-49 > 100
50- 100
10. Please, Place a tick mark against any of the following reason that may have caused
your labour shortage? Insufficient payment Amount of work Working hours Working condition Terms of services Relocation of other area Problem with management Location of organization Government scheme of employment Any other, please mention ____________
11. Please use the key below to rate the working condition _____
5 - Excellent 1 4 - Good 2 3 - Average 3 _____, _____, _____ 2 - Poor 1 - Very poor
13. How are you trying to minimize the impact of shortage of labour?
Organizing and attending recruitment campus 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 Other, please mention ___________________
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