Assam: Sualkuchi faces severe economic threat due to lockdown

The coronavirus pandemic has led to a breakdown of businesses, thereby changing the economic scenario of the world.  The gravity of the situation can be gauged from the fact that even big companies are seeking help from the government. Small industries, MSMEs, handloom and other local industries stand to be the most affected in this unprecedented crisis. The textile industry in Assam too is under severe distress and has called upon the state government to bail it out, after the huge losses they have incurred.

Lockdown blues

Sualkuchi, a weaving village in Assam and textile behemoth suffers the wrath of the economic crisis like no other.

Sualkuchi is situated on the north bank of the river Brahmaputra, about 35 km from Guwahati. It has a large number of cottage industries engaged in handloom, for which it is also known as the "Manchester of Assam".

The business model associated in the village is the supply of raw materials from Karnataka, following which production of garments in the form of Mekhela-Sador, Gamusa, and others. The finished products are then retailed in the village as well as supplied to parts of Assam and especially in the Guwahati market. The production process is facilitated by migrant workers who come from the neighbouring villages districts including Nalbari, Goalapra and BTR regions. A lot of them are women, who are indigenous tribals and work in various parts of the production, especially spinning.

The pandemic has affected the core of the industry by targetting the production, retail, labour aspects of the industry. The entire chain has been affected at an individual level.

The production 

Owing to the lack of transportation with the lockdown, the lack of raw goods import have lowered the output of these looms. Even the garments made from existing materials find no buyers among wholesalers and retailers. Speaking to Inside Northeast, a factory owner in Sualkuchi, Dilip Kalita says, "our sales have completely stopped and we have halted manufacturing. This has impacted the entire business of Sualkuchi". Kalita has 27 looms and is one of the bigger players, yet faces extreme situations.

Another big challenge in production has been the cyclical slowdown due to various occasions. "I have been suffering since the CAA agitation when sales dipped and had hopes that Bihu in April will take care of it", says Jayanta Das, who is a small factory owner with 5 looms. The sales period is hugely dependant on weddings and festivities.

During the lockdown after the anti-CAA movement, the textile industry has incurred over Rs 130-crore loss in the state and around Rs 100 crore in Sualkuchi alone. Now, with the coronavirus coming before the festive season has been the nail in the coffin.

It is important to note that a lot of houses operated with a single loom and that production here is fragmented. As such, the impact cannot be accounted for directly because of the unorganised nature of the work.

The labour issue

Many of the migrant labourers of Sualkuchi stay in rented accommodation in the area. With the lack of income, they have suffered from paying the dues and find themselves stranded. Few have managed to go back home. Such is the case of two Rabha girls, who refused to be named. They have paid Rs 3,000 and made their own travel arrangement to return back to their native place in Goalpara. The lack of work has facilitated such outmigrations at high costs for these labourers. It is estimated that there are at least 7000 to 8000 migrant labourers.

When asked about how they are catering to the labour issues, small factory owner Dilip Kalita says, "I have been able to take care of them by providing them the ration but I don't know what happens next".

"I am banking on the retailer to open his shop, the labourers are leaning on me and we all are only hoping", says Das.

The retailers

A big part of the retail trade associated with Sualkuchi happens in Fancy Bazar, Guwahati. This primary market consists of both small and big players. Speaking to InsideNortheast, Bhaskar Kalita, who has a shop in New Market says, "well I couldn't open my shop in the lockdown. But even after the relaxations, there's no point because the overall sales have lessened and there are no takers of these items". When asked regarding the monetary flow, Kalita says, "that we only pay post-sales". As such, it is seen that the entire trade faces a cash crunch owing to a lack of transactions.

The retail sector in the city has suffered as a whole; the adverse effects are not limited to one particular aspect. Speaking to InsideNe, the owners of Kalpatura, a famous shop in Panbazar, said, "Sales are zero. We tried opening up but it's also difficult to get a turn. We have paid full salaries to our employees but it will be difficult for us to continue".

The government side

As per sources, there have been talks about financial help to the people involved in the sector through monetary offerings. According to a senior official from the Assam Sericulture Department, "the govt is looking at the matter and might soon intervene and provide monetary help". But he is of the view that it would be a temporary fix as the entire sector has been ailing for a long time. "There is no diversification of goods. We are only producing garments and few other items like gamusa as we are only focused on Muga silk". Instead, he suggested that the focus should be on Eri silk and to diversify that into making items like curtains, carpets, and towels and as per the current trends.

Also read: Janmoni Gogoi: The story of a vegetable selling woman in Assam

He suggested, that to pick up demand, govt must buy these products for its offices and take newer initiatives. "Unless we don't peak up demand, these problems will only worsen with corona". The eri silk diversification should touch other commodities like mask making, an essential commodity at this time, which will give the women spinners employment at this juncture.

The economics at work

90% of the village is dependent on the textile industry. The small retail shops sell items that are bought by migrant workers who stay there. So, the effects of the crisis have trickled down to almost everyone. The overall transactions have halted in such a situation. Dr. Nihar Ranjan Kalita, Head of the Department of Economics of SMBS College prescribes certain measures to better the situation.

The Secretary of Sualkuchi Tat Sipini Unnayan Samiti spoke of setting up a 'Bastra Bank' where producers can store the garments as collateral and borrow money. For the spinners, he suggests that the government issue a minimum support price so that they are not exploited by bigger players. They should be covered under social security measures like  'Kisan Samman Nidhi', the professor proposes.

The govt already has a procurement policy, and a floor price, yet the lack of financial inclusion has become a hindrance to such measures. As of now, many of the small producers do not have the subsidy card. Dr. Kalita acknowledges the problem and says, " this lack of inclusion is problematic as many of them have not applied for these benefits. We need to move from being an informal sector to a formal one".

He is also of the view that mere govt benefits won't sustain, and along with that demand has to pick up. He highlights that it is difficult to pick up growth at this juncture, of a luxury commodity, but the govt can buy the silk items for its own offices.

Future course 

Sualkuchi is believed to have been established in the 11th Century by King Dharma Pala of the Pala dynasty that ruled western Assam from 900 AD to about 1100 AD. Silk was given royal patronage in those times.

As the country heads toward the end of lockdown 3.0, it will be important to contemplate on the entire issue to take it towards a solution. Otherwise, we risk going for easy, quick-fix solutions, which won't help in the long run if the virus does become the new normal.

With hosts of unemployed youths returning, turning this into an opportunity for the long term should be the intention by catering to all the stakeholders of the trade.

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