International

Garment makers default on loans to pay workers

    19 May 2020

In his garment business spanning over 30 years, Ludhiana-based Prithvi Raj Jairath has never seen such a slump as he is witnessing now during the lockdown. Hit by disruption, he defaulted on loan repayment to pay his employees during the lockdown period. Like him, there are many who have borrowed from banks or opted for moratorium to retain the skilled workforce Being in small scale industry, I don't have deep pockets. As my inventory was blocked, it was impossible for me to pay my workers and meet other fixed costs during the lockdown. Left with no option, I defaulted on my EMIs to pay their salary," said Jairath, proprietor, Jairath International.

His son, running a different enterprise in garments sector, also opted for moratorium to pay his workers.

Prior to the lockdown, he had around 40 workers and was mostly dependent on work outsourced from medium companies. However, amid the lockdown, cancellation of orders from domestic and overseas markets came as a huge setback for the garment makers of Ludhiana. Almost 90% of the garment units in Ludhiana manufacture apparels for big brands.

With the exodus of migrants from the state, only 20 workers are coming to his unit currently.

"I don't know when the situation will improve. As I have raw material left with me, I have asked my workers to continue operations. I am not getting my receivables but my vendors are asking for payments," he said.

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