Ahmedabad's Alienated Textile Workers

Author(s): Darryl D'Monte

Source: India International Centre Quarterly, Vol. 29, No. 2 (MONSOON 2002), pp. 129-140
Published by: India International Centre
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 Darryl D'Monte

Ahmedabad's Alienated Textile

Workers

It was in this climate that the Textile Labour Association, which is the
main representative union ofAhmedabad's textile workers... took a bold
and far-sighted view that it would not be possible to restart the older
textile mills in their original form; it was necessary to support the new
liberal economic policy
— Sanat Mehta,
former Ahmedabad textile union leader.

I think of my children and then I understand: thefactories must be kept

open because they are our future
—
Kanpur cotton mill worker.

textile industry can be said to have an 'ABC' of urban

centres — Ahmedabad, Bombay and Coimbatore —which have
India's
coincidentally developed in chronological order as well. It was
the British who first began to manufacture cotton in the country. The
first mills were set up by East India Company employees or colonial
administration officials in the 1820s,
a good 30 years before either
British or Indianentrepreneurs began to invest in them. While the
mill set up in Bombay by Indian businessmen had British partners,
"the first centre of Indian entrepreneurial initiative was Ahmedabad,
where the early mills were financed by local capital and managed
exclusively by Indians," according to S.R.B. Leadbeater, author of a
recent book on the swadeshi legacy in the Indian textile industry.1
The first mill began functioning in Ahmedabad in 1861 — seven

years later than Bombay —and the city earned itself the epithet
'Manchester of India'. Writes Leadbeater: "The cotton mill initiated in

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130 / India International Centre Quarterly

Ahmedabad...was under entirely different circumstances, and

heralded a new dawn of industrial enterprise in a climate quite unlike

Bombay."2
Textile industries grew in the cities of Gujarat in tandem with
the nationalist struggle between 1901 and 1947. Indeed, the swadeshi
movement of 1904-08 and the Civil Disobedience movement of 1921
and 1932-33 boosted the fortunes
of the industry. Ahmedabad saw
the number of mills rise from 27 to 60 in the first half of the twentieth

century; the strength of workers advanced from 16,000 to 130,000.

There was the threat of a strike in 1918 when owners withdrew a bonus

given to workers during a plague epidemic. They were given a 20 per

cent increase in wages, while they demanded 50 per cent. Ambalal
Sarabhai, a leading textile mill owner, appealed to Gandhi to intervene
and prevent a strike. Gandhi agreed and persuaded both sides to agree
to arbitration. However, some workers went on strike, whereupon
the owners declared
a lock-out. Gandhi actively guided the strikers
and coaxed them to ask for a 35 per cent raise instead of 50 per cent.
The millowners withdrew the lock-out and were willing to take back
workers who accepted 20 per cent. The strike continued and Gandhi
went on a fast till a settlement was reached. Notes Ghanshyam Shah,
"Urban middle class public opinion was sympathetic to the strike
because of Gandhi's involvement; Gandhi had by that time emerged
as the nationalist leader."3
After twenty-two fiercely-fought days, the strike was called off
when the millowners, who could not afford to continue with a closure
in a boom period, accepted arbitration once again. The workers' success
boosted their morale considerably and led them to form an

organisation to negotiate effectively with the millowners. Shah

observes:

Millowners who were sympathetic to Gandhi's philosophy of

maintaining harmony between capital and labour also extended
their support to Gandhian workers in forming the Textile Labour
Association (TLA), also known as the Majoor Mahajan, in 1920.
The TLA was based on Gandhi's philosophy of collaboration be
tween capital and labour and the method of panch, i.e. arbitration
for resolving the conflict between the two.

However, strikes continued between 1921-23. That year, the

economic crisis deepened and millowners passed a resolution calling
for a 20 per cent cut in wages. This led to a 90-day strike, which fizzled
out, with the workers accepting a 15 per cent reduction. "The

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 Darryl D'Monte / 131

millowners had succeeded in controlling the TLA and ensuring that it

played the role which the Ahmedabad Mill Owners Association (AMA)
wanted it to play." Another chronicler of industrial relations in this

city, Sujata Patel, points out: "The 1923 strike and defeat had washed

away all the perceptible gains that the movement had made during
the last five years...the millowners took a unilateral decision to stop
the yearly bonus, given since 1918, from 1923 onwards, a decision on
which the TLA did not even register a protest."4 After 1923, the TLA
concentrated on social welfare activities for the workers. While the
workers supported the nationalist movement, the industrialists
wavered.
The paternalistic attitude fostered by Gandhianism persisted after
independence. The TLA appointed representatives in many mills to
resolve disputes through an elaborate machinery which alienated

many trade union leaders. It became closely allied with

the ruling

Congress party in the state and at the Centre, with its leader, Sanat
Mehta, becoming Finance Minister, robbing it of whatever militancy
it possessed. The union became highly bureaucratic and also enjoyed
a privileged status — identical to that of the Rashtriya Mill Mazdoor

Sangh (RMMS) in Mumbai —under the Bombay Industrial Relations

Act (till 1960, Gujarat and
Maharashtra were part of a combined

Bombay state). Despite this, or perhaps partly because of it, the TLA
remained the largest and most powerful trade union in Gujarat. In
1981, it had on its rolls 135,000 out of the 150,000 workers in the
Ahmedabad textile industry.

According to Supriya Roy Chowdhury, the gradual decline in

profitability of the mills began in the 1970s, but accelerated after 1985.
Till then, there were 85 mills in Ahmedabad. That year, 12 mills which
had been running at a severe loss were nationalised and placed under
the Gujarat State Textile Corporation (GSTC). By 1994,18 mills were
under liquidation —
they had been officially closed and their property
placed under a government-appointed liquidator, to be sold and the
dues of creditors met. At the end of that year, some more
and workers
downed their shutters. Roy Chowdhury put the actual number of mill
workers who had lost their jobs at 50,000. "The steady deterioration
of employment opportunities in Ahmedabad made it practically

impossible for most of these displaced persons to find employment."5

A survey conducted by B.B. Patel from the Gandhi Labour
Institute (GLI) of some 5,700 displaced millworkers found only 40 per
cent were employed in some kind of wage-paid work; there was a

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132 / India International Centre Quarterly

great deal of instability and dislocation.6 A subsequent survey of nearly

three times as many jobless workers found that over 70 per cent were
over 35 years old; half were over 40 and only one-tenth were below

thirty. One-third were either illiterate or had between one and four

years of schooling. Only 5 per cent had been to college or had technical
qualifications. All the factors greatly reduced the potential of

redeployment of these mill workers.7 Interestingly enough, Gujarat

has seen the rise of gangsterism with some nexus with the textile

industry. The dreaded 'godmother', Santokben Jadeja, now the subject

of a popular Hindi film of that title, runs a gang of over a hundred
hardened criminalsin the Rajkot-Porbandar area. In the fifties, the
owner of Maharaja Mills in Porbandar had hired a goon to break the
communist-led trade union, on the lines of Arun Gawli in Khatau Mill.
Her husband, Sarmanbhai Munja, then a small-time bully, murdered
this goon and overnight became the don of the city's mafia, cornering
the liquor and gold smuggling trade. In one brutal incident, portrayed
in the film, Munja dragged two people by a rope tied to his jeep; one
died while the other survived astride the former's corpse.8
In a detailed study of industrial sickness in this industry in 1998,
S. S. Mehta and Dinesh Harode of the GLI record how 44 mills in the

city were closed, throwing 85,000 workers out of jobs. In the state as a
whole, there were 66 closed mills, with over 100,000 unemployed,
comprising four out of every ten textile workers in the country.

Thus the Gujarat textile scenario is the worst in the entire country,
with the second highest number of sick units (87), the highest
closed units (66), the highest units under liquidation (34 out of
50) and the highest workers affected due to closure...Between
1991-97, the closures have more than doubled, thus the crisis has
worsened in the post-liberalisation period.9

According to the Ahmedabad Textile Mills Association president,

Anang Lalbhai: "The situation on the textile front is not only grim but
the industry itself has become redundant."10
Unlike in Mumbai, where many mills, both in the private sector
and those run by the National Textile Corporation (NTC), are running
with a limited capacity, Ahmedabad's mills have closed down
— which is at least in or passivity
completely part due to the compliance
of the TLA. Mehta and Harode cite the consequences of industrial
sickness and of mills as including
closure statutory dues amounting
to Rs 228 crore not being paid to 73,000 workers. This works out to Rs
31,000 per worker. As against this, between 1980 and 1994, only some

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 Darryl D'Monte/ 133

61,000 jobs were created in the state, which has a deserved reputation
as being the most business-like in the country, with a penchant for

cutting through red-tape in granting licences to industrialists to invest

there.
The
growth of employment in manufacturing in the state fell

sharply from nearly 7 per cent annually in the 1970s to just 2 per cent
in the 1980s. Factory jobs in the organised sector were virtually

stagnant. "This situation only indicates that mill workers must have
been forced to seek jobs in the uncertain unorganised sector only," the
authors observe. Elsewhere, in an official request for assistance from
the National Renewal Fund (NRF) for the city's mills, Sanat Mehta
has pointed out how Ahmedabad received almost 5 per cent of all new
investments in Gujarat; a decade later, this proportion had halved.11

Ironically, there has been a tremendous increase in industrial

investment in the state — touching Rs 256,160 crore in 1993-94 —but
with no corresponding spurt in employment.12
Gujarat banned investments exceeding Rs 5 crores in metropolitan
areas to promote balanced regional development and reduce

congestion. The combination of restrictionson setting up large projects

and the financial incentives for establishing industries in backward
areas has diminished Ahmedabad's importance as an industrial city.
With the blocking of legal channels of locating industries within urban
areas, where economies of scale due to agglomeration could be
achieved, there was a mushrooming of small-scale industries in badly

planned industrial estates. As Sanat Mehta observes, "Today, these ad

hoc industrial estates are creating severe problems of environmental

pollution, traffic congestion and conflicting land uses." Gujarat has

consequently seen massive investments around the port of Hazira at

Surat, the Bharuch-Ankleshwar area and Chhatral-Kadi-Kalol belt, up
to 40 km from the capital. The state government itself admits that
Mumbai-based Gujaratis and non-Gujaratis who are investing in
medium and large industries in the state have no special links with
Ahmedabad.
Ernesto Noronha, who has studied the displaced textile workers
of Ahmedabad for his dissertation at the Tata Institute of Social
Sciences, has also analysed, with R.N. Sharma, head of Urban Studies
at the institute, the impact in detail of the closure of one mill in the

city.13 New Rajpur Mills was one of four which closed in 1994-95, but
was the only composite mill among them. It had 1,250 workers. It
started showing losses in the mid-seventies and was ailing for years.

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134 / India International Centre Quarterly

In 1994, a creditor filed a petition asking that the mill be wound up to

recover his dues, which
was admitted. The very next day, the official

liquidator took possession of the assets and properties of the company.

A few days later, the court admitted the TLA's petition that the mill
was a viable concern and need not be wound up; the assets were
handed back. However,the case went to the Supreme Court which
ordered the liquidator
to take possession of them again.14

Supriya Roy Chowdhury notes that the mill was closed in an

extra-legal manner (considering that the creditor was only owed Rs

68,000) and with the tacit connivance of the state government. The
'exit practice' was inherently anti-labour. Salaries for the preceding
month, amounting to Rs 35 lakh, were not paid and gratuity totalling
Rs 8 crore was outstanding. Two-thirds of the workers interviewed by
Noronha asserted that the TLA did nothing to save the mill. Observes

Roy Chowdhury: "The TLA's response.. .has been primarily to accept

the closures as a fait accompli and to work around various institutions
in order to provide interim relief and some kind of employment for
15
the affected workers."
The TLA's lack of militancy has always been evident, in contrast
to Mumbai's textile trade unions which in the past, at any rate, were
in the vanguard of labour agitations. When the Rs 121 crore assistance
from the NRF did not materialise, the TLA —under the leadership of
the veteran Gandhian unionist, Arvind Buch —went on a satyagraha
in 1994 which lasted more than two years. A makeshift pandal was
erected on the pavement outside the TLA premises in the congested
old part of the city. This tactic was meant to galvanise a large number
of textile workers, as well as to exert pressure on the central

government to release the funds. Asserted Buch:

My struggle to leave my house and work on the footpath of TLA

is not against any government, but a self-introspection, Gandhian
process... We don't believe either in violence or confrontation, but
my patience has crossed limits, forcing me to adopt Gandhian
methods to draw the attention of the centre to the plight of the
textile workers. And, as I am not in electoral politics, I don't bother
about the political fallout.16

In his proposal for central government assistance, Sanat Mehta

(who, incidentally, played a controversial of the Sardar

role as head
Sarovar Dam Project on the Narmada river) uncritically justified the
TLA line to endorse the New Economic Policy. His request for funds
to the NRF on behalf of the state notes that it was:

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 Darryl D'Monte/ 135

...set up for labour affected by industrial restructuring. It was her

alded as a major component of the new economic policy, which
promises to liberalise the moribund economy of the country. The
Government of India rightly perceived that as an inevitable out
come of the new economic policy, non-viable units may have to
close down, thereby adversely affecting more workers...
As can be expected, almost all labour unions were of the opinion
that such a fund was nothing but a first step towards a capital
friendly and, by implication, anti-labour exit policy and should
therefore be opposed.
On the ground, realities were quite different. Numerous indus
trial units in the country had been closing down through various
means which were most often not legal. This led to non-payment
of statutory dues to workers who contributed their labour and
were now left with no alternative. The adoption of confrontation
ist labour policies proved of no help.
The once-proud textile workers have seen their earnings snatched
from their hands and have been forced to join the ranks of the
ever-growing marginalised labour force. Their wages are not only
left unpaid; even their rightful statutory dues, which include their
lifelong savings on account of earned leave, due bonus, and gra
tuity dues have not been paid to them.
It was in this climate that the TLA, which is the main representa
tive union of Ahmedabad's textile workers, with guidance from
Shri Sanat Mehta and Shri Arvind Buch, took a bold and far
sighted view that it would not be possible to restart the older tex
tile mills in their original form; it was necessary to support the
new liberal economic policy. This stance, and the Association's
other initiatives, led to the commissioning of a study of the closed
textile mills of the city. The subsequent findings and recommen
dations of the study were accepted by the workers.17

In fact, the rank and file was badly hit by the closures. According
to Noronha, 38 per cent of the sample of 135 New Rajpur workers he
interviewed remained jobless ten months after the closure. Only low
paid jobs were available; they were too old to find new sources of

employment and lacked the requisite skills. Other factors cited were
the reluctance of employers to hire displaced mill workers, illness,
poor working conditions, the long distance between workplace and
home, lack of education and job security. One in five said that there
were simply no jobs available. Under these grim circumstances, is it
at all surprising that Ahmedabad has witnessed periodic bouts of
communal violence?
Noronha and Sharma recognise that, "Workers in the organised
sector are privileged in comparison to their counterparts in the

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unorganised sector. It is not surprising, therefore, that respondents

complain about long working hours in their new jobs." At the same
time, it should be remembered that it took just four months for New

Rajpur to be closed. Nearly 80 per cent of these workers were re

employed in the informal sector. The authors conclude that the state's
welfare role is rapidly receding. "In practice, there are no restrictions
on closures. Closures take place in violation of all labour laws and are
often used as an instrument for forcing labour to accept retrenchment.
What are termed labour market rigidities exist only in statute books."
At the same time, S.S. Mehta and Harode note: "The magnitude
of the locked assets of mills is very large and they continue to be
— land.' This can be
locked mainly 26.3 lakh sq. m of prime industrial
split up into 18.4 lakh sq. m, belonging to private mills, valued at over
Rs 500 crore. If land belonging to mills under the Gujarat State Textile

Corporation is added, this totals 26.3 lakh sq. m, which would amount
to a staggering Rs 714 crore:

This land is identified as the land reserved for industrial purposes.

There is a large amount of infrastructure built on this land for the
purpose of industrialisation. This entire land has gone out of pro
ductive use ever since mills started closing down. This land con
sists of two parts: constructed land and open land. This land was
given exemption under the Urban Land Ceiling Act, 1976. If this
exemption is withdrawn, the open area will vest in the govern
ment and can be utilised for starting new economic activities.

oronha records how (once again, like the RMMS) the TLA

leadership since 1984 has been attempting to facilitate the

scrapping of unviable units and compensate the workers

from the sale of land and assets.
As it happens, Sanat Mehta and the TLA collaborated with the

city's well-known School of Planning to draft a proposal titled 'Urban

Rejuvenation through Property Redevelopment: Reusing Lands of

Textile Mills Under
Liquidation in Ahmedabad City'. Barjor Mehta,
an assistant professor in the school who guided the study, comments
on the closure of around a third of the 65 large mills:

A significant consequence.. .is that large portions of urban indus

trial land have become idle and unproductive. This has obviously
led to a loss of potential revenue to the city and a gross under
utilisation of existing supportive infrastructure networks. As the
mills have been sealed, the large landholdings of these industrial

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 Darryl D'Monte/ 137

units with idle buildings and rusting machines are fast becoming
derelict. This serious dereliction of urban property, particularly
in the eastern part of the city, has created multiple critical stresses
on the urban environment. We know from experience that such

dereliction, coupled with the rise in poverty levels due to unem

ployment, leads to rising social tensions and crime.
The older industrial location policy had pushed out large indus
trial units far outside city limits [similar to Mumbai's experience:
author]. Coupled with the restructuring process, the effects on
the city where large numbers of skilled workers lived was disas
trous. Workers who found themselves out of a job when the mills
closed down were not able to find new jobs within the city. Most
found it very difficult to move to out-of-city job locations. With
the changed industrial location policy, it is now possible to de
velop non-polluting industries within city limits [like the Correa
committee's proposed hi-tech industries for the redevelopment
of mill land in Mumbai: author]. The lands now blocked by the
older textile units are, therefore, very valuable city resources which
need to be effectively used.18

The proposal, whichwas supported by the Vadodara-based

Gujarat Foundation for Development Alternatives, headed by Sanat
Mehta, sought to meet four objectives: to enable the workers to recover
their dues and the financial institutions to recover their debts; create
additional employment opportunities at convenient
city inner
locations;and to rejuvenate the city's economy. The baniya mentality

pervading all economic activity in Gujarat led to a disenchantment

with the official machinery, which was meant to dispose of the mills'
assets and pay off their dues. The same study asserted:

Existing official agencies such as the official liquidator, by the very

nature of their organisational structures and mandates, are forced

to see individual units as watertight compartments. They cannot

and will not think of all the units as a common city resource. By
legal mandate, they cannot make macro-level decisions, for in
stance, on which particular property to sell, at what time, and in
what manner, not only to obtain the highest price but also in a
manner that would benefit the entire city. Unfortunately, in India,
we do not have any public agency which has the necessary legal
mandate to take such city-wide macro decisions. We also have no
knowledge of any official agency that has dealt in the disposal of
urban land of this magnitude in any Indian city.. .Such an agency
would have to be legally, morally and emotionally rooted in the
city itself.

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138 / India International Centre Quarterly

When the Correa committee in Mumbai recommended that the

Girangaon mill land be pooled and developed in a holistic manner, it

was making a similar plea — which fell on deaf ears.
The Ahmedabad Municipal Corporation was obviously ruled out,
due to its administrative structure and own precarious financial
situation. A committee headed by Abid Hussain, former head of the

Planning Commission, to study the country's

textile industry in the
1990s and attempt 'restructuring with a human face', had outlined an
institutional structure called a Textile Restructuring Assets Trust

(TRAT).19 This would be a trust or board comprising all the

stakeholders. This agency would be able to tackle the macro as well
as micro problems cited. It could attract financial and technical talent
from both the public and private sector as well. It was to have a firm
schedule and be fully funded by the government. The board had to be

given a clear mandate and 'actively strive to cultivate a genuine public

private partnership'. The proposal recognised that an 'infinite' pool

of private initiative existed in the city. Whether it was to set up
wholesale premises
trading or small- or medium-scale industries
within the city limits, the agency could provide the requisite services.
It strongly came out in favour of planned industrial estates for

manufacturing industries and wanted the local government to support

these by declaring them 'enterprise zones' with 'realistic and
affordable' tax policies. "Private developers, who for long have been
looked at with suspicion, would be able to obtain appropriate legally
unencumbered serviced plots officially at publicly declared prices," it
stated.
With one in every three of the 65 mills closed — six of these by the
GSTC itself—the workers of these mills were paid off but the properties
continued to remain unutilised. Between 1984 and 1990, as many as
28 mills shut down and 15 were under the Official Liquidator. Some
29,000 workers of the 15 mills were
awaiting their dues, estimated at
Rs 84 crore. At the same time, 86 ha of prime industrial land, with all
the infrastructure for productive use, was lying idle. As Barjor Mehta
put it to the author, this was equivalent to 44 cricket grounds. The

surrounding areas of these once-highly productive tracts of real estate

had also suffered: many industrial and trade organisations which
formed the backward and forward linkages of the textile mills were
relocated nearby. With unemployment and underemployment,
worker's housing, which was at the best of times sub-standard, had
further deteriorated. "The problem, therefore, affects not just the

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 Darryl D'Monte /139

textile industry but the entire city of Ahmedabad," the proposal

observed.
However, it was not as if Ahmedabad had ceased to function. It

appeared to 'show increasing trends towards tertiarisation. Instead of

large industrial units within the city limits, what we now have are a

large number of tiny and small-scale industrial units. There has been
a boom in wholesale trading activity'. This had brought its own

problems; there were very badly planned, sometimes completely illegal

and unsafe, industrial estates. The mushrooming of this unplanned

development had led to serious environmental degradation. Workers

in such units, as well as surrounding inhabitants, had been put to
high, unacceptable risk.

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140 / India International Centre Quarterly

Notes
1. S.R.B. Leadbeater (1993), The Politics ofTextiles: The Indian Cotton-Mill Industry&
the Legacy of Swadeshi, 1900-1985, New Delhi, Sage, p. 13
2. Ibid, p. 58
3. Ghanshyam Shah (1990) 'Caste Sentiments, Class Formation & Dominance in

Gujarat' in Francine Frankel & Rao (eds), Dominance & State Power in India: De
cline of a Social Order, OUP, pp. 76-78.
4. Sujata Patel (1987), The Making of Industrial Relations: The Ahmedabad Textile In

dustry 1918-1939, Delhi, OUP, p. 62.

5. Supriya Roy Chowdhury, 'Industrial
Restructuring, Unions & the State: Textile
Mill Workers in Ahmedabad', 24 February
EPW, 1996.
6. B.B. Patel (1988), Workers of Closed Textile Mills: Patterns & Problems of Their Ab
sorption in a Metropolitan Labour Market, New Delhi, Oxford & IBH.
7. B. B. Patel and V.R.S. Cowlaghi, with Displacement — Textile
'Coping Displaced
Mills' Labour, Redeployment Strategies and Regeneration of Local Economy
with Social Justice: The Case of Metropolitan Area of Ahmedabad', Gandhi La
bour Institute, workshop paper, June 1994
8. 'Santokben, Godmother', Outlook, 8 March 1999
9. S.S. Mehta and Dinesh Harode (1998), 'Industrial Sickness & Workers; Case of

Gujarat Textile Industry', EPW, 26 December 1998

10. 'Manchester of India turns into Graveyard of Textile Mills', FE, 3 April 2000
11. Sanat Mehta, 'Request for Assistance from the National Renewal Fund for
Ahmedabad's Textile Mills', summary proposal, 1994
12. Supriya Roy Chowdhury, op. cit.
13. Ernesto Noronha (1996), Displaced Workers of the Textile Mills of Ahmedabad,
M. Phil. Dissertation, Tata Institute of Social Sciences
14. Ernesto Noronha, and R.N. Sharma, 'Displaced Workers & Withering of Wel
fare State', EPW, 5 June, 1999.
15. Supriya Roy Chowdhury, op. cit.
16. Ibid.
17. Sanat Mehta, op. cit.
18. Barjor Mehta, (1992), Urban Rejuvenation Through Property Redevelopment: Reus

ing Lands of Textile Mills Under Liquidation in Ahmedabad City, School of Planning,
Kasturbhai Lalbhai
Campus, Ahmedabad.
19. 'The Textile
Industry in the 1990s: Restructuring with a Human Face', Report of
the Committee to Review Progress of Implementation of Textile Policy of June

1985, headed by Abid Hussain, January 1990.

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