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PERFORMANCE OF POWERLOOM SECTOR IN TAMILNADU-A CASE OF ERODE

DISTRICT
Article · July 2011
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APJRBM Volume 2, Issue 7 (July, 2011) ISSN 2229-4104
The Journal of Sri Krishna Research & Educational Consortium
ASIA PACIFIC JOURNAL OF RESEARCH

IN BUSINESS MANAGEMENT
Internationally Indexed & Listed Referred e -Journal
PERFORMANCE OF POWERLOOM SECTOR IN TAMILNADU -

A CASE OF ERODE DISTRICT
DR. M. VASAN*
*K. S. Rangasamy College of Arts & Science ,

Tiruchengode - 636215.
ABSTRACT
This article made an attempt to analyse the performance of powerloom sector in

Erode District of Tamilnadu. This study mainly depends on primary data gathered
through a well-structured questionnaire from the owners of powerloom sector. Based
on this research, performance of powerloom industry relating to investment pattern,
procurement of raw materials, labour, and marketing are thoroughly analyzed and
this industry greatly affected by erratic power supply, labour problems and hike in
prices of raw materials. This study suggested that the Government should provide
exemption from taxes and duties, loans and subsidies, training to workforce,
facilitate easy access to good quality of raw materials and establish a platform to
market the products. Further, the owners of powerloom sector should form a cluster
to share infrastructure and technology and tap export opportunities to products of
powerloom sector.
KEYWORDS:
____________________________________________________________________________
INTRODUCTION
The oldest industrial sector in India is textile industry which plays a unique role in the economic
progress of our country. This industry contributes 14% of the total industry production, 4% to the
GDP and 17% to the country's export earnings. It provides direct employment to over 35 million
people. The textiles sector is the second largest employment provider in India next to
agriculture. It contributes 7000 crores as duties to central exchequers. India is a world leader in
both yarn production and cotton cultivation with a global share of 28%. The area under cotton
cultivation is 1.0 million hectares, which is the largest in the world while the annual cotton
production is 3000 million kilo grams. Thus, the growth and all round development of this
industry has a direct bearing on the improvement of the economy of the nation.
Sri Krishna International Research & Educational Consortium

http://www.skirec.com
- 319 -
Textile industry in India consist of organized mill sector and decentralized handloom,
powerloom and Khadi sectors. Indian textile industry with a 58% global share of looms
consisting 3.5 million handlooms and 1.8 million powerloom, 1300 spinning units and over 275
composite mills is a force to reckon with the global textile area. Most of these looms are
concentrated in Tamil Nadu, Andhra Pradesh, Assam, Rajasthan, Uttrapradesh, and West
Bengal. India manufacture 5% of cloth through organized sector, 20% through handloom sector,
15% through knitting sector and 61% of Indian cloth is produced through decentralized
powerloom sector.
POWERLOOM SECTOR IN INDIA
The powerloom sector has grown up from handloom sector traditionally with inherent
technical knowhow passed on from forefather and is being continuing in many of the clusters.
This sector plays a pivotal role in meeting the clothing needs of the country. The powerloom
sector produces a wide variety of cloth, both grey as well as processed. Production of clo th as
well as generation of employment has been rapidly increasing in the powerloom sector. There
are 22.69 lakh powerlooms in the country as on 31 st October 2010 distributed over
approximately 5.11 lakh units. The powerloom sector contributes about 61% of the total cloth
production of the country, and provides employment to about 56.64 lakh persons. More than
60% of the cloth meant for export comes from the powerloom sector.
POWERLOOM SECTOR IN TAMILNADU
In the history of Indian Textile Industry, among the majority of the sub-sectors,
Tamilnadu occupies a prominent position. Tamilnadu contributes about one-third of the total
textile production in the country. The State textile industry is predominantly cotton based. Some
of the textile products from Tamilnadu which are universally recognized for the excellent
craftsmanship and their uniqueness are Kancheepuram Silk Sarees, Bhavani Carpet
(Jamukalam), Madurai Sungadi Sarees, Coimbatore Kora Sarees, Paramakudi Sarees, Salem Silk
Dhoties, Erode and Karur Home Textiles, Tirupur Knitwear Garments, etc. The State Textile
Sector provides direct employment to around 40 lakh people.
Powerloom sector is one of the most significant segments of the textile industry in Tamil
Nadu. Tamilnadu holds the second position in the country in terms of number of powerlooms
installed. There are 22.69 lakh registered powerlooms in India, of which, Tamilnadu has 4.46
lakh registered powerlooms with 11.16 lakh workforce. The cloth production in the powerloom
sector in India is about 54000 million sq. metre, of which, the State contributes about 10800
million sq. metre.
STATEMENT OF THE PROBLEM
The textile industry contributes a major share to the GDP of India. Though there are
various sectors operating in textile industry in India, the powerloom sector remarkably
contributes i.e., 62% to the total share. The powerloom sector acts as a help to the society by
creating lot of employment opportunities, both directly and indirectly. In this present scenario,
the powerloom sector facing various problems relating to procurement and efficient utilization of

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raw material, labour, credit accessibility, management of finance and marketing. Hence, based
on the above issues, the following questions are probed.
i. What is the attitude of owners towards the performance of powerloom industry?
ii. What is the level of satisfaction of powerloom owners towards the performance of
powerloom industry?
iii. What are the problems faced by the owners of powerloom industry?
REVIEW OF LITERATURE
Many studies have been conducted on various sectors of textile industry at international
and national levels. Some of the important studies reviewed here:
Rao (2001) has outlined that the textile industry has been experiencing a high cost of
production over the years. Ramakrishna (2001) has identified that the handloom sector has been
experiencing a lot of the difficulties in marketing its products. Joshi K.N (2002) has compared
the textile industry in India and China. He outlined that China was much ahead of India in textile
industry due to availability of cheap labour, sourcing of good quality of raw materials needed for
the textile industry at cheap cost and adoption of modern technology and innovation. Mohamed
(2002) has outlined the various problems the textile industry is facing in Pakistan. He described
all the problems which were overwhelming the performance of textile sector in Pakistan and
among them, the textile sector in Pakistan has been suffering from the problems related to
infrastructure. He also suggested that Pakistan is self-reliant in textile sector only if it
concentrates on providing sound infrastructure. Kanaka (2003) has indentified poor working
capital management, lack of product diversification, stiff competition from powerloom units and
mill sector, lack of access to bank credit at favourable terms and frequent fluctuations in the
prices of raw materials which have been daunting the handloom sector for many years. Sarkar
(2003) has listed the measures taken by the Government of India to modernize the powerloom
sector in order to make it competitive both domestically and internationally. Various task
committees were set up by Government of India to streamline the complicated procedures the
powerloom sector has been facing and to chalk out hassle-free procedures. He suggested that
infrastructure of powerloom sector should be strengthened and the Government of India has a
major role to play in this core area. Sathyamurthy and Soundariya (2003) have strongly
supported the establishment of more number of apparel parks in the country in order to provide
the long-term support for the knit wear sector. They also stressed the need for collective working
on various long-term projects which would definitely help this sector to have a foot print in the
international arena. Sakthivel (2004) has dwelt at length the excise and other duties levied on
textile industry by all the countries across the globe. He lamented that the duties levied by
Government of India on textile industry was much more than the other countries. He
vociferously argued that excise and other duties on textiles should be slashed to the level of the
duties in other countries. Alexander (2005) has outlined the various functional problems that has
been experiencing by Erode Handloom Cooperative Societies and he pointed critically the
problems, such as poor quality of looms and lack of product diversification among all the
problems. Agarwal (2006) has examined that the higher rates of these duties act as a deterrent to
the performance of the Indian textile industry, as the industry finds these monetary measures
- 321 -
difficult to import the advanced machinery at affordable costs. Hence, he suggested that these
duties must be reduced considering the ground realities prevalent in this industry. Mukarjee
(2006) has addressed the problems of labour shortage which mar the performance of Indian
textile industry. Rakshit and Arup (2007) have explained the need for establishing more training
institutes in India to provide training to the workforce to be employed by the t extile industry.
They felt the existing institutions in India were offering only very few training programmes
which considered inadequate to train the labour to the textile industry. As a result, the industry
was absorbing labour force into it without formal vocational training which hit the performance
of textile industry so badly. Kaplinsky et al (2008) have explained the threat posed by Chinese
textile product to all others in the global scenario, South Africa in particular. They fear that the
invasion of China in textile sector might lead to reduce the growth and development of African
textile industry, both at the national level and international level. They suggested that in order to
regain the old glory, the South African textile industry must initiat e measures, such as drastic cut
down of production cost, innovative and creative product designs, installation and adoption of
technological apparatus and efficient marketing strategies. Satya Sundaram (2009) has dwelt
upon the various measures and initiatives taken by the government to infuse fresh blood to the
handloom sector in order to face stiff competition in export markets. Among the measures,
capital subsidy, the Technology Upgradation Scheme, opening more yarn depots, the handlooms
(Reservation of Articles for production) Act were noteworthy to mention. He felt that, with the
government support, the handloom sector will flourish both in domestic markets and export
markets in future.
The above studies concentrated on various sectors of textile industry. Few studies have
dealt with the performance of handloom, knit wears, powerloom and export and import of textile
industry. There was no comprehensive study to realize the performance of powerloom industry.
These studies failed to measure: i)
powerloom industry? and ii) What were the problems encountered by the owners of powerloom
industry? These issues have not yet been addressed by the earlier studies in powerloom industry.
In the pursuit of maintaining consistency and continuity, there is dire need for regular surveys so
that it would become possible to outline the existing gaps with a view to stimu lating future
studies in the proper direction. Bearing this in mind, the researcher has made an attempt to
address the above said issues in the study area, hence the present study.
OBJECTIVES OF THE STUDY
The study has been carried out with the following objectives:
i) To analyze the attitude of owners towards the performance of powerloom industry;
ii) To identify the problems faced by the owners of powerloom industry; and
iii) To offer suggestions for the betterment of powerloom industry.

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HYPOTHESIS
There is no significant difference between profile of powerlooms such as amount of

investment, type of product manufactured, number of workers, type of organization, number of
loom units.
RESEARCH METHODOLOGY
Survey Method has been followed for the study. Both primary and secondary sources of
data are used. Well structured questionnaire is designed to elicit necessary information from the
owners of powerloom units. The secondary data are collected from the books, journals,
magazines and web portals.
The study depends mainly on the primary data collected through a well structured
questionnaire to elicit the well-considered opinions from the owners of powerloom units. The
questionnaire consisted socio-economic profile of the powerloom owners, profile of powerloom
units, performance of powerloom units, problems faced by the owners of powerloom sector and
A convenient sampling method was employed to elicit the required information from the
owners of powerloom units. The sample size of 120 powerloom owners, representing all areas in
Erode district, has been duly selected for the study.
The primary data collected from the respondents has been analyzed with the help of
Statistical Package for Social Sciences (SPSS). The statistical tools such as Descriptive Statistics,
-parametric Chi-square test are applied for the study.
PROFILE OF STUDY AREA
Erode district is one among the industrially developing districts. The district is well
known for marketing of turmeric and textile products of Handloom, Powerloom and Readymade
Garments. The Handloom and Powerloom products such as Cotton Sarees, Bed Spreads, Carpets,
Lungies, Printed Fabrics, Towels and Dhotis are marketed here in bulk. The district now has over
40,000 powerlooms, which manufactures about 47% of state's total textile needs. To boost the
powerloom sector, the State Government had given approval for the establishment of the Erode
Mega Powerloom Cluster, comprising a marketing complex (Texvalley) and a manufacturing
cluster, at Gangapuram near Chithode in Erode district.
AN ANALYSIS OF PERFORMANCE OF POWERLOOM SECTOR IN ERODE

DISTRICT
The performance of powerloom sector in Erode District has been analysed systematic and
logical manner. The first phase consists of socio-economic background powerloom owners and
profile of powerloom units. The second phase deals with the performance of powerloom sector
have been thoroughly studied in the selected areas such as infrastructure, raw material, labour

- 323 -
and marketing. The third Phase analysed problems encountered by the owners of powerloom
industry.
SOCIO-ECONOMIC BACKGROUND OF THE OWNERS OF THE POWERLOOM

SECTOR IN ERODE DISTRICT
The powerloom owners consisted of 89.2% male and 7.1% female. The age of owners of
powerloom units indicated that 40.8%, who are belonging to 31-40 years age group, followed by
29.2% to 41-50 years age group. The marital status wise classification of the respondents
depicted that, 85.8% of the owners of the owners of powerloom are married and 14.2% of them
are unmarried. The education qualification of owners of powerloom units consisted of 20.8%
who are studied up to SSLC, 44.2% who are HSC/Diploma holders and 35% who are graduates.
The nature of family of the owners of powerloom units consisted of 75.3% nuclear and 24.7%
extended.
PROFILE OF THE POWERLOOM SECTOR IN ERODE DISTRICT
The profile of the powerloom units indicates the various factors that directly or indirectly
affect the performance of powerloom units. The nature of loom in powerloom units consisted of
33.2% used looms, 23.4% new looms and 43.3% have both new looms and used looms. The
amount invested in powerloom units consisted of 36% of powerloom units have invested 1-3
lakhs, followed by 25.8 units have invested less than 1 lakh and 12.5% of the units have
invested above 5 lakhs. The powerloom units have manufactured 40.8% of dhoties, 31.7% grey
cotton fabric and 27.5% mulls. The number of workers employed by 57 powerloom units are
ranges from 1-5, 40 units from 6 to 10, 16 units 11 to 15 and 7 units employed more than 15. The
nature powerloom units explored that 67.5% of the powerloom units are set up in the nature of
sole proprietorship and 32.5% of the looms are set up in the nature of partnership. Of the 120
units, 58.3% had less than 10 powerlooms, 14.2% have 10-20 powerlooms, 20.8% have 21-30
powerlooms and 6.7% have more than 30 powerlooms. The age of 63.3% of powerloom units is
6-10 years, followed by 16.7% have the age of 6-10 years and 13.3% have the age of less than
more than 15 years. The location of powerloom units are indicated that 56.7% of powerloom
units are situated along with the residences of the owners and 43.3% of powerloom units is
situated away from the residences of the owners. Type of loom installed indicated that 48.3% of
the powerloom units have installed plain/ordinary loom type and 29.2% of the units have
adopted shuttle less type.
PERFORMANCE OF POWERLOOM SECTOR IN ERODE DISTRICT
In this section, an in-depth analysis is made to know the performance of powerloom

sector in areas of investment, procurement of materials, labour and marketing.
INVESTMENT
Finance is the life-blood of any business. The performance of finance function and all
other functions of powerloom units are very much inter-related. In order to carry out the
activities or functions of powerloom units, it is essential and imperative that sufficient funds

- 324 -
have been procured. In this part, a serious attempt has been made to observe various finance
related issues that come in the way of management of powerloom units on a continual basis.
TABLE 1: SOURCES OF CAPITAL
Sources No. of Respondents Percentage

Owned 37 30.8
Borrowed 24 20.0
Both 59 49.2
Total 120 100.0
The sources of capital of powerloom depicted that that most of the units in powerloom sector
access on both owned capital as well as borrowed capital (49.2%). 20% of the units are depends
on borrowed capital (Table-1).
TABLE 2: SOURCE OF FINANCE
Source of Finance No. of Respondents Percentage

Banks 37 30.8
Friends and relatives 22 18.3
Money lenders 49 40.8
Government 12 10.0
Total 120 100.0
The sources of finance emphasized that the major sources of access to finance came from money
lenders (40.8%), followed by banks (30.8%), friends and relatives (18.3%) and incentives and
subsidies from the governments (10%). This showed that money le nders are major source of
providing loans to this industry and as a result this industry is handicapped with access to
unorganized system of financing (Table-2).
TABLE 3: AVERAGE PROFIT MARGIN PERCENTAGE
Profit Margin No. of Respondents Percentage

Less than 10 59 49.2
10 to 20 38 31.7
20 and above 23 19.2
Total 120 100.0
The average profit margin of majority of powerloom units indicated that sum of the units in
powerloom sector has a higher profit margin of above 20%. But, 49.2% of powerlo om units have
a low profit margin of less than 10%. It is due to high cost of raw materials, increase in labor
cost, etc (Table-3).

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PROCUREMENT OF MATERIALS
The final output of powerloom sector depends on the quality of raw materials. The
quality of raw materials, in turn, depends on number of factors, such as price, source of supply,
regularity of supply and lead time for getting raw materials.
TABLE 4: MODE OF PROCUREMENT OF RAW MATERIALS
Mode of Procurement No. of Respondents Percentage

Direct purchases 53 44.2
Through agents 67 55.8
Total 120 100.0
The mode of procurement of raw materials showed that 55.8% owners of powerloom sector are
purchasing the required raw materials through agents. Further, 44.2 owners of powerloom sector
have purchased the needed raw materials directly from the suppliers (Table-4).
TABLE 5: LOCATION OF SUPPLIERS OF RAW MATERIALS
Location No. of Respondents Percentage

Within the District 63 52.5
Outside the District 41 34.2
Outside the State 16 13.3
Total 120 100.0
The powerloom units have procured their raw materials from within the boundary of district
(52.5%), the sources of supply outside the district (34.2%) and the places of supply outside the
state (13.3%). So, majority of the powerloom units have chosen their suppliers of raw materials
within the district (Table-5).
LABOUR
The labour constitutes the backbone of powerloom industry. But, now-a-days, the
industry has been facing a lot of perennial problems of labour such as high salary, labour
turnover, non-availability of skilled labour etc.
TABLE 6: SPAN OF SERVICE OF WORKERS
Opinion No. of Respondents Percentage

Below 5 years 37 30.8
6 to 10 years 29 24.2
11 to 15 years 31 25.8
Above 15 years 23 19.2
Total 120 100.0

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This span of service of workers of powerloom sector indicated that majority (30.8%) of
the workers of powerloom units have below five years of work experience in their chosen area.
24.2 labours have work experience of 6-10 years, 19.2% workers of powerloom units have a
commendable work experience of above 15 years. This indicated that majority of the workers of
the units are not having adequate work experience (Table-6).
TABLE 7: STATUS OF WORKING SHIFT PER DAY

1 shift 65 54.2
1 ½ shifts 35 29.2
2 shifts 20 16.7
Total 120 100.0
Majority of the powerloom units (54.2%) are functioned only one shift per day. Some of them
functions one and a half to two shifts per day which indicated that the indust ry has not been
operated up to its maximum potential. It is due to shortage of skilled man power, non-adherence
to latest technological developments, erratic power supply, non-availability of raw materials in
time, lack of required infrastructure and slump in demand for products manufactured by this
industry (Table-7).
TABLE 8: BENEFITS PROVIDED TO WORKERS
Nature of Benefits No. of Respondents Percentage

Loan 89 74.2
Bonus 112 93.3
Festivals advance 39 32.5
Refreshment and transport 19 15.8
Note: Multiple responses
The various monetary and non-monetary benefits provided to the workers of powerloom units.
Out of total benefits bonus 93.3% followed by loan 74.2%, 32.5% festival advances and 15.8%
refreshment and transport. This indicated that the workers are provided these benefits, in addition
to their basic wages for retaining its workers (Table-8).
MARKETING
Marketing of products plays a predominant role for the success of any business. True is the case
of powerloom sector also. The success of powerloom sector highly depends on how the produced
goods have been effectively marketed. This study has analysed the various marketing related
issues that the industry is facing now and then.

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TABLE 9: TARGET MARKET

Local market 77 64.2
Local and state market 24 20.0
Local, state and national market 19 15.8
Total 120 100.0
Majority of the units (64.2%) are supply their products in the local areas. A reasonable number
of units (20%) are supply their final products to both local and state markets. This showed that
powerloom units in Erode district are mainly supply to the local market (Table-9).
TABLE 10: FREQUENCY OF ORDERS
Frequency of Orders No. of Respondents Percentage

Regular 58 48.3
Seasonal 41 34.2
Occasional 21 17.5
Total 120 100.0
The majority of the owners of powerloom units (48.3%) have expressed that they are getting
orders were regularly, whereas 34.2% of the owners of powerloom units which are seasonal
based (Table-10).
TABLE 11: CHANNEL OF DISTRIBUTION OF THE PRODUCT
Channel of Distribution No. of Respondents Percentage

Direct 37 30.8
Intermediaries 58 48.3
Through government 25 20.8
Total 120 100.0
The majority of the powerloom units have sold their products through middlemen (48.3%). A
significant number of units (30.8%) have sold their products directly to consumers (Table-11).
ERODE DISTRICT
Non-parametric F
the performance of powerloom sector in various parameters (Table - 12).

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TABLE
POWERLOOM INDUSTRY
Standard Mean Chi-

Variables Mean df Sig
Deviation Rank Square
Availability of raw materials 3.65 1.424 4.71
Return on investment 3.53 1.359 4.38
Marketing of products 3.61 1.463 4.70
Selling price 3.48 1.384 4.35 48.97 7 .000
Assistance from Banks 3.92 1.009 5.04
Government support 3.88 1.164 5.03
Power supply 3.15 1.394 3.50
Availability of labour 3.38 1.284 4.28
-Square test showed that there is significant difference in the level

formance of powerloom sector (P<0.05). The mean ranks
revealed the fact that the owners of powerloom sector are more dissatisfied with the power
supply (Mean=3.50). The owners are more satisfied with the assistance provided by the banks
(Mean=5.04).
CLASSIFICATION OF OWNERS BASED ON SATISFACTION WITH THE

PERFORMANCE OF POWERLOOM SECTOR
with the performance of powerloom industry. K-means cluster analysis is used to identify
heterogeneous groups of owners of powerloom units. This analysis is helpful in identifying
different groups of owners with homogeneous qualities.
TABLE 13: NUMBER OF CASES IN EACH CLUSTER
Clusters Number of Respondents Percent

1 41 34.2
2 51 42.5
3 28 23.3
Total 120 100.0
The final cluster centre table revealed that there exist three heterogeneous groups of
owners based on the factors of performance of powerloom units. The first cluster of powerloom
owners of 34.2% are in the high level of satisfaction with performance of their powerloom units,
42.5% of the owners are in the moderate level and 23.3% of them in the low level of satisfaction
with the performance of powerloom units (Table-13).
It is concluded that the first cluster is called a high cluster with high level of satisfaction
with the performance of powerloom sector. The second cluster is called moderate cluster with

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the moderate level of satisfaction with the performance. The third cluster is called a poor cluster
in which the owners have low level of satisfaction with the performance of powerloom sector.
ASSOCIATION BETWEEN CLUSTERS OF POWERLOOM OWNERS AND PROFILE

OF POWERLOOM UNITS
The Cross-Tab analysis is performed between the clusters of performance of powerloom

units and profile of the powerloom units to find out their varied opinion on performance of
powerloom units. Further, chi-square test is applied to test the proximity of the same.
Table - 14: Age of Units and Satisfaction with PERFORMANCE of Powerloom Units
Clusters of Performance
Age of Units Total
High Medium Low
Below 5 years 8 6 6 20
6 to 10 years 25 34 17 76
11 to 15 years 3 4 1 8
Above 15 years 5 7 4 16
Total 41 51 28 120
Chi-Square value = 2.070; d.f. = 6; Sig .000
The owners of powerloom units with the maximum of 34 (28.3%) who run their units for
6 to 10 years have medium level of satisfaction with the performance of their units. The Pearson
chi-square test value is 2.07 and it is significant at 5% level. Hence, the null hypothesis is
rejected. Therefore, it is concluded that there is an association found between the age of units and
satisfaction with the performance of powerloom units (Table-14).
TABLE-15: NUMBER OF POWERLOOMS AND SATISFACTION WITH

PERFORMANCE OF POWERLOOM UNITS
No. of powerlooms Total
High Medium Low
Below 10 25 29 16 70
10-20 6 9 2 17
21-30 8 8 9 25
Above 30 2 5 1 8
Total 41 51 28 120
The owners of powerloom units with the maximum of 29 (24.16%) who run their units
with less than 10 looms have medium level of satisfaction with the performance of their units.
The Pearson chi-square test value is 5.246 and it is not significant at 5% level. Hence, the null
hypothesis is accepted. Therefore, it is concluded that there is no association found between the
Number of powerlooms and satisfaction with the performance of powerloom units (Table-15).

- 330 -
TABLE-16: TYPE OF ORGANIZATION AND SATISFACTION WITH

Nature of organization Total
High Medium Low
Sole proprietorship 29 36 16 81
Partnership 12 15 12 39
Total 41 51 28 120
The owners of powerloom units with the maximum of 36 (30%) who run their units under the
nature of sole proprietorship have expressed medium level of satisfaction with the performance
of their units. The Pearson chi-square test value is 1.786 and it is significant at 5% level. Hence,
the null hypothesis is rejected. Therefore, it is concluded that there is an association found
between type of organization and satisfaction with the performance of powerloom units (Table-
16).
TABLE -17: NUMBER OF WORKERS AND SATISFACTION WITH PERFORMANCE

OF POWERLOOM UNITS
No. of workers Total
High Medium Low
Up to 5 20 24 13 57
6 to 10 12 16 12 40
11 to 15 6 8 2 16
Above 15 3 3 1 7
Total 41 51 28 120
Chi-Square value = 2.516; d.f. = 6; Sig. 033
The owners of powerloom units with the maximum of 24 (20%) who run their units with less
than 5 workers have medium level of satisfaction with the performance their units. The Pearson
chi-square test value is 2.516 and it is significant at 5% level. Hence, the null hypothesis is
rejected. Therefore, it is concluded that there is an association found between number of workers
and satisfaction with the performance of powerloom units (Table-17).
TABLE-18: TYPE OF PRODUCT MANUFACTURED AND SATISFACTION WITH

Type of product manufactured Total
High Medium Low
Grey cotton fabric 13 18 7 38
Dhoties 13 25 11 49
Mulls 15 8 10 33
Total 41 51 28 120
Chi-Square value = 6.801; d.f. = 4; Sig. 012

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The owners of powerloom units with the maximum of 25 (20.83%) who run their units
with the production of Dhoties have medium level of satisfaction with the performance of their
units. So, it is inferred that the performance of the units which produces Grey cotton fabric and
mulls are seems to be satisfactory. The Pearson chi-square test value is 6.801 and it is significant
at 5% level. Hence, the null hypothesis is rejected (Table-18).
TABLE-19: AMOUNT OF INVESTMENT AND SATISFACTION WITH

Investment Clusters of Performance

Total
(in ) High Medium Low
Below 1 lakh 12 15 4 31
1 to 3 lakhs 11 15 18 44
3 to 5 lakhs 11 13 6 30
Above 5 lakhs 7 8 - 15
Total 41 51 28 120
The owners of powerloom units with the maximum of 18 (15%) who run their units with
the investment of 1-3 lakhs have low level of satisfaction with the performance of their units.
The Pearson chi-square test value is 14.328 and it is significant at 5% level. Hence, the null
hypothesis is rejected. Therefore, it is concluded that there is an association found between
amount of investment and satisfaction with the performance of powerloom units (Table-19).
TABLE 4.20: NATURE OF LOOMS AND SATISFACTION WITH

Nature of looms Total
High Medium Low
New looms 10 17 13 40
Used looms 11 10 7 28
Both 20 24 8 52
Total 41 51 28 120
Chi-Square value = 4.828; d.f. = 4; Sig. .000
The owners of powerloom units with the maximum of 24 (20%) who run their units with
both new looms and used looms have medium level of satisfaction with the performance of their
units. The Pearson chi-square test value is 4.828 it is significant at 5% level. Hence, the null
hypothesis is rejected. Therefore, it is concluded that there is an association found between the
nature of looms and satisfaction with the performance of powerloom units (Table-20).
PROBLEMS FACED BY THE OWNERS OF POWERLOOM SECTOR IN ERODE

DISTRICT

- 332 -
There are various key factors which have a direct bearing on the problems related to
performance of powerloom sector
identify the predominant factors which influence the problems of powerloom sector.
TABLE-21: PROBLEMS FACED BY THE OWNERS OF POWERLOOM SECTOR
Std. Mean Chi-

Factors Mean df Sig
Non-availability of Raw materials 2.78 1.106 6.32
Lack of expansion and modernization 2.77 1.091 6.23
High rate of interest on loan 2.43 1.071 5.34
Inadequate transport facilities 2.72 1.155 6.16
Power holidays 2.78 0.999 6.45 260.77 8 .000
Labour Problems 2.75 1.056 6.34
Lack of government support 2.77 1.185 6.27
Price fluctuations in raw material 3.52 0.862 6.13
Shortage of skilled labour 2.33 1.058 4.95
-Square test showed that there is significant difference in

the various problems faced by the owners of powerloom sector 2= 260.77; P<0.05). The mean
ranks revealed the fact that the owners of powerloom sector are greatly affected by erratic power
supply and power holidays followed by labour problems (Table-21).
POWERLOOM SECTOR IN ERODE DISTRICT
elicited. This exercise will bring to light the need for improvements to be made by various
agencies and these expectations will form the basis for the government to frame effective
Test (non-parametric) has been employed.
TABLE- IMPROVEMENT OF
POWERLOOM SECTOR
Std. Mean Chi-

Problems Mean df Sig
3.92 1.086 8.25
Assistance to technological upgradation 3.81 1.110 9.88
Reduction of bank rates 3.79 0.990 7.37
Free from power interruptions 3.76 0.927 8.94
Farming of powerloom cartel to reap the 3.76 0.903 9.09 142.01 8 .000
common benefits
Simplification rules and regulations to loan 3.72 1.009 8.60
accessibility

- 333 -
Training the work force 3.69 1.100 8.12

Access to bank loans at cheaper rates 3.67 1.001 9.05
Providing raw materials at subsidized rates by 3.61 1.022 8.40
the government
-Square test explored that there is a significant difference found

among the various expectations of owners of powerloom units ( 2=142.01; P<0.05). The
expectations given by the owners of powerloom units ranked according to the order of priority as
felt by the owners. At present, the assistance to technological up gradation, simplification of
getting loans from banks and free from power holidays are the prime expectations of the owners
of the powerloom sector (Table-22).
FINDINGS OF THE STUDY
The nature of loom in powerloom units consisted of 33.2% used looms and 43.3% had
both new looms and used looms.
The amount invested in powerloom units consisted of 36% of powerloom units have
invested 1-3 lakhs.
Dhoties constitutes as one of the prime product manufactured by powerloom sector in

Erode District.
Majority of powerloom units have employed the workers between 1 and 5.
The nature powerloom units explored that 67.5% of the powerloom units are set up in the
nature of sole proprietorship.
Majority of units have the number of powerlooms which is less than 10.
63.3% of the powerloom units have had the age of 6 to 10 years old in this industry.
56.7% of powerloom units are situated along with the residences of the owners.
Type of loom installed indicated that 48.3% of the powerloom units have installed
plain/ordinary looms.
Most of the units in powerloom sector access on both owned capital as well as borrowed
capital (49.2%).
The sources of finance emphasized that the major sources of access to finance came from
money lenders (40.8%), followed by banks (30.8%).
49.2% of powerloom units are earning a low profit margin i.e., less than 10%.
55.8% owners of powerloom sector are purchasing the required raw materials through
agents.

- 334 -
Majority of the powerloom units have chosen their suppliers of raw materials within the
district.
Majority (30.8%) of the workers of powerloom units have below five years of work
experience in their chosen area.
Majority of the powerloom units (54.2%) are functioned only one shift per day.
The various monetary and non-monetary benefits provided to the workers of powerloom
units in addition to basic wages.
Majority of the units (64.2%) are supplying their products in the local areas.
Majority of the owners of powerloom units (48.3%) are getting orders regularly.
The most of the powerloom units have sold their products through middlemen.
42.5% of the owners are in the medium level of satisfaction with the performance of
powerloom units.
The majority of owners (28.3%) who run their units for 6 to 10 years have medium level
of satisfaction with the performance of their unit.
The owners of powerloom units with the maximum of (24.16%) who run their units with
less than 10 looms have medium level of satisfaction with the performance of their units.
30% who run their units under the nature of sole proprietorship have medium level of
satisfaction with the performance of their units.
The majority of (20%) who run their units with less than 5 workers have medium level of
satisfaction with the performance their unit.
The performance of the units which produces Grey cotton fabric and mulls are seems to
be satisfactory.
The majority of (15%) who run their units with the investment of 1-3 lakhs have
expressed that the performance of their units are low.
The performance of the units that using new looms are found to be better.
The owners of powerloom sector are greatly affected by erratic power supply and power
holidays followed by labour problems.
The assistance to technological up gradation, simplification of getting loans from banks

and free from power holidays are the prime expectations of the owners of the powerloom
sector.

- 335 -
SUGGESTIONS
Banks and financial institutions should provide loans and advances on liberal credit terms
to the powerloom industry. Because most of the powerloom units are under the clutches
of money lenders.
Government should offer regular training programmes to powerloom workers.
The powerloom sector should provide reasonable remuneration to its workers fairly, so
that it can avoid the problems of labour shortage and frequent labour turnover.
The State Government should facilitate uninterrupted supply of power at reasonable cost
to this sector. This is the need of the hour because the powerloom sector has been
continuously suffering from frequent power disruptions and high power t ariffs.
The government should be set up integrated and regulated markets for supply of fine
quality of materials at affordable rates to the powerloom sector.
The Government of India should help the powerloom sector to adopt latest and modern
technology by offering the sector with various incentives and subsidies.
The powerloom sector should adopt a cluster model among its units to share the
infrastructure. This should be implemented in a true spirit, as units under this sector are
not affordable to spend on infrastructure front.
The powerloom sector should establish the information centre for getting timely
information about demand and supply for its products.
Sufficient steps should be taken to promote export of powerloom products.
The Government of India and the respective state governments should minimize duties
and taxes levied on powerloom sector as far as practicable.
The Government of India should establish regional retail markets through which the
products of powerloom sector can be sold to the customers.
CONCLUSION
overall economic development. The Government of India should take holistic approach towards
this sector in terms of curtail in taxes and duties, provide loans and subsidies, train the workforce
skillfully, facilitate easy access to good quality of raw materials and establish a platform to
market the products. The owners of powerloom sector should form a cluster to share
infrastructure and technology. Research and development should be carried on continually in the
powerloom sector for better invention and creativity. Export markets should be taped to the
advantages of powerloom sector with the help of government and other stakeholders. The
powerloom sector, being the lifeline of most of the people in the country should be developed to
a great heights and this is possible only if all stakeholders co-operate tirelessly in this endeavour.

- 336 -
REFERENCES
oost Textiles Industry, Man-Made Textiles in

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Handloom Co-
(6), p.15.
-11), New Delhi,

p.15-22.
Goel G.B. (1997), Cooperative Research: Identification of Priority Gaps, India n

Cooperative Review, Vol. 34 (5), July, p. 89.
Government of India (2010-11), Annual Report, Ministry of Textiles, New Delhi.
Government of Tamilnadu (2010-11), Department of Handlooms and Textile, Policy

Note No.17.
Joshni K.N
Textile Management Review, Vol.4 (1), pp.4-7.
Indian Journal of Marketing, Vol.32(12), pp.21.
Kaplinsky, Raphael, Morris, Mi -

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273.
Mohamed Mazz
Journal, Vol.7(2), pp.21-25.
M -Made Textiles
in India, Vol. 49(7), pp.281-282.
Management Inquiry, Vol. 16(2), pp.180-192.
Rakshit, Arup K. (2007 , Textile Review, Vol.

50(2), pp.43-45.
Rakshit, Arup K. Recent Government Initiatives for Textile Industry, Man-Made

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May, p.32.
October, 15, p.15.
, Man-Made Textiles in
India, Vol. 46 (5), pp.273-274.
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Vol. 45(8), p.287.
Survey of Indian Industry, The Hindu, p.36.
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Shubha Madhukar (2004), http://www. Domain-b.com/industry/textiles.
www.texmin.nic.in
www.txcindia.com

- 338 -
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PERFORMANCE OF POWERLOOM SECTOR IN TAMILNADU-A CASE OF ERODE

Article · July 2011

OWNERS’ ATTITUDE TOWARDS THE PERFORMANCE OF POWERLOOM SECTOR View project

The user has requested enhancement of the downloaded file.

The Journal of Sri Krishna Research & Educational Consortium

ASIA PACIFIC JOURNAL OF RESEARCH

PERFORMANCE OF POWERLOOM SECTOR IN TAMILNADU -

*K. S. Rangasamy College of Arts & Science ,

This article made an attempt to analyse the performance of powerloom sector in

Sri Krishna International Research & Educational Consortium

POWERLOOM SECTOR IN INDIA

POWERLOOM SECTOR IN TAMILNADU

STATEMENT OF THE PROBLEM

Sri Krishna International Research & Educational Consortium

i. What is the attitude of owners towards the performance of powerloom industry?

OBJECTIVES OF THE STUDY

i) To analyze the attitude of owners towards the performance of powerloom industry;

iii) To offer suggestions for the betterment of powerloom industry.

Sri Krishna International Research & Educational Consortium

There is no significant difference between profile of powerlooms such as amount of

PROFILE OF STUDY AREA

AN ANALYSIS OF PERFORMANCE OF POWERLOOM SECTOR IN ERODE

Sri Krishna International Research & Educational Consortium

SOCIO-ECONOMIC BACKGROUND OF THE OWNERS OF THE POWERLOOM

PROFILE OF THE POWERLOOM SECTOR IN ERODE DISTRICT

PERFORMANCE OF POWERLOOM SECTOR IN ERODE DISTRICT

In this section, an in-depth analysis is made to know the performance of powerloom

Sri Krishna International Research & Educational Consortium

TABLE 1: SOURCES OF CAPITAL

Sources No. of Respondents Percentage

TABLE 2: SOURCE OF FINANCE

Source of Finance No. of Respondents Percentage

TABLE 3: AVERAGE PROFIT MARGIN PERCENTAGE

Profit Margin No. of Respondents Percentage

Sri Krishna International Research & Educational Consortium

TABLE 4: MODE OF PROCUREMENT OF RAW MATERIALS

Mode of Procurement No. of Respondents Percentage

TABLE 5: LOCATION OF SUPPLIERS OF RAW MATERIALS

Location No. of Respondents Percentage

TABLE 6: SPAN OF SERVICE OF WORKERS

Opinion No. of Respondents Percentage

Sri Krishna International Research & Educational Consortium

TABLE 7: STATUS OF WORKING SHIFT PER DAY

Opinion No. of Respondents Percentage

TABLE 8: BENEFITS PROVIDED TO WORKERS

Nature of Benefits No. of Respondents Percentage

Sri Krishna International Research & Educational Consortium

TABLE 9: TARGET MARKET

Opinion No. of Respondents Percentage

TABLE 10: FREQUENCY OF ORDERS

Frequency of Orders No. of Respondents Percentage

TABLE 11: CHANNEL OF DISTRIBUTION OF THE PRODUCT

Channel of Distribution No. of Respondents Percentage

Sri Krishna International Research & Educational Consortium

Standard Mean Chi-

-Square test showed that there is significant difference in the level

CLASSIFICATION OF OWNERS BASED ON SATISFACTION WITH THE

TABLE 13: NUMBER OF CASES IN EACH CLUSTER

Clusters Number of Respondents Percent

Sri Krishna International Research & Educational Consortium

ASSOCIATION BETWEEN CLUSTERS OF POWERLOOM OWNERS AND PROFILE

The Cross-Tab analysis is performed between the clusters of performance of powerloom