Synonymous with the freedom struggle and a symbol of swadeshi, the khadi industry is currently in doldrums as the country gears up to celebrate 75 years of freedom from colonial rule. A steep hike in cotton price and shutdown of the sliver unit in Chitradurga for nearly a year now has brought most spinning activities to a standstill as khadi institutions struggle to stay afloat.
The nearly century-old Badanavalu Khadi Kendra, near Nanjangud in Mysuru district that was inaugurated by Mahatma Gandhi in 1927 has stopped spinning for nearly five months, while the more than 65-years-old Dharwad Taluk Seva Kendra has not seen spinning activities for more than four months. The situation is as dire in other units, leading to job losses.
Pandemic impact
The problem for the khadi units, that are already saddled with huge stock due to COVID-19 pandemic, increased in the last one year as cotton price is the highest in the last decade as the country is facing a cotton production shortfall. The cost of sliver supplied by Khadi and Village Industries Commission (KVIC) has increased by about 60%. Sliver that would cost around ₹225 a kg now cost ₹385 a kg.
“After shutting down spinning for a couple of months, we are operating just about 15 days in a month,” Karnataka Sarvodaya Sangha president Arun Kumar said. “Most khadi producers are facing problems with capital as they are stuck with huge stocks. Unless they are able to sell, they cannot buy sliver.”
For Badanavalu Khadi Kendra, which sells products through four retail outlets, the problem is different. “At the old price, our hand spun-hand woven towels worth ₹280 would cost ₹199 after rebate. If we buy sliver at the current cost, the same towel has to be priced around ₹500. How can society be run when prices are so high?” asked manager of Kendra D.S. Somashekar. With spinning stopped at this kendra, which provided employment even during peak pandemic, about 45 women are now unemployed.
Fire fiasco
A big part of the problem for the khadi industry in Karnataka has been the shutting down of the KVIC’s Sliver Production Centre at Chitradruga due to a fire accident last September. The refurbished plant will take time to become operational. KVIC now sources sliver from Thrissur, Coimbatore and Tiruppur which results higher costs, though supply is not disrupted.
Sources also say that the demand had come down due to high cost and financial conditions of the institutions. In fact, of the 65 registered khadi institutions, 25 have received sliver this year so far while orders of five are being processed. According to Santosh Koulagi of Janapada Seva Trust, Melukote, those with sliver stock continue to spin while others have not placed fresh orders or reduced their orders because it is expensive.
Before the KVIC’s sliver plant at Chitradurga, individual khadi producing units were self-sufficient and undertook the roving process to make sliver on a small scale. “With the technology becoming obsolete, the old machines were scrapped. If we have to get sliver on our own, then machineries worth lakhs have to be installed. When societies are facing serious financial issues, where will we get the money from?” Narahari Kaginele, the secretary of Dharwad Taluk Seva Kendra, asked.
Sliver costs
While the society has stocks worth ₹1.5 crore, it has stopped spinning for around three months. “The sliver coming from outside the State is expensive. As it is, Khadi is an expensive product and rebates are announced for customers based on the 35% subsidy given by the State and Union governments. We cannot further increase the cost. Our society is now focused on clearing stocks than producing new ones,” said Mr. Narahari.
As the situation is turning grim, some of the societies with poor financials may fold up soon, unless the government intervenes with sliver pricing.
5% GST on sliver
The khadi could not escape GST. While khadi products are exempted from GST, the cotton sliver from which the yarn for khadi fabric is derived is charged at 5% GST. The industry that is reeling under tremendous stress is also affected by this.
“It is a contradiction. While to make the khadi product we pay GST at 5%, on the full product the State and Union governments give a total of 35% subsidy,” Narahari Kaginele, president of Dharwad Taluk Seva Sangha, said. “It is unfortunate that a product that was so attached to the independence movement has a GST component.” Arun Kumar, president of Karnataka Sarvodaya Sangha, said despite petitioning the government, nothing has happened so far. “There is no collective leadership to speak to the government.”
Khadi and national flag
Changes brought to the Flag Code that removed the exclusivity of making flag with khadi have riled many. “There are more than 10,000 cooperative societies in the country that could have been entrusted with making the khadi flag. By this way, these societies could have been saved and Atmanirbhar Bharat could also have a meaning,” said Narahari Kaginele, president of Dharwad Taluk Seva Sangha. According to Santosh Koulagi of Janapda Seva Trust, thousands of crores worth of khadi material remains unsold in the cooperative sector that could have been used for making the flag.
Meanwhile, theatre artist Prasanna is launching a ‘flag satyagraha’ on July 31 in Mysuru with a padayatra from Gandhi Square to Freedom Park (Subbarayanakere) to create awareness about the significance of khadi in the flag. “Har Ghar Tiranga is a laudable effort to enable people to hoist the tricolour. However, with the changes in the Flag Code, the government intends to fly a foreign made Indian Flag on every household this Independence Day,” he said.
Loss of jobs
An estimated 10,000 women, mostly in rural areas, who spun the yarn with charakas have been rendered jobless. Many have turned to agriculture as labourers or working as maids to eke out a living. A pay of ₹7.5 is fixed for spinning every thousand metres of yarn derived from the sliver. An additional ₹4 is given as incentive. On an average, a worker earns between ₹100 and ₹150 daily.
