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Chapter 9 The Mills Close, the TLA Falters, and the Municipal Corporation Goes Broke
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chapter 9 The Mills Close, the TLA Falters, and the Municipal Corporation Goes Broke Ahmedabad’s Mills Shut Down In the 1980s, Ahmedabad’s mill industry began to shut down. The effects devastated the owners, the workers, and the city. Once again, Ahmedabad was a shock city, bearing the brunt of what became a national, and global, trend in the collapse of large-scale older industries. The closure of Ahmedabad’s mills was, however, surprisingly different from the collapse taking place in wealthier, more industrialized countries. The more industrialized countries lost out to regions with lower wage rates and sometimes with newer machinery, especially to China. But Ahmedabad lost its industries not to more competitive overseas plants, but rather to indigenous Indian small-scale power loom production. Ironically, Gandhian Ahmedabad lost its mills as a result of government policies favoring small-scale industry, a legacy of Gandhian economics. The figures tell the story: 1981 was the year of maximum employment in Ahmedabad’s composite textile mills. Sixty-three mills employed an average of 155,244 workers each day. Of these, 131,560 were members of the Textile Labour Association (TLA). By 1989, the thirty-three mills that were still in business employed 62,126 workers. The union actually had more members—71,438— than there were workers in the mills because it represented them in claiming unemployment and severance benefits from the mills and the government. By 1997, only nineteen mills remained, employing 35,494 workers. Only about half, 18,172, were still in the TLA.1 Across India, the production of cotton cloth shifted from mill manufacture to decentralized production on power looms and hand looms. In the decade 1955–65, large-scale mills manufactured two-thirds of India’s total cloth production ; power looms and hand looms, about one-third. By 1990, the mills manufactured only one-sixth of the nation’s cloth; power looms and hand looms, five-sixths, or 83.3 percent. Total production in the mills was cut by about 60 percent, while it rose almost five times in the power loom and hand loom sector .2 If the mills were a catastrophe, the power looms and hand looms were a great success. Despite the decline of the composite mills, total production of cloth in India rose by two-thirds, from 6,900 million square meters annually in 1955 to 11,760 million in 1990. 196 Creativity and Chaos This transformation was largely a result of conscious policies of the government of India to restrict the size of the mills to favor hand looms and thus put Gandhian philosophy into practice. In effect, however, power looms were usually classified with hand looms and shared in the benefits of the legislation. Power looms usually refers to workshops or small factories ranging from “units with 6–8 second-hand looms operated mainly with hired labor but not covered by the Factory Act, to units with 40 or more high-speed, partly or fully automatic , even shuttleless looms and many technical and organisational features of a modern textile factory.”3 Legislation favoring these relatively small units included: severe limits on any expansion of weaving capacity in composite mills between 1956 and 1985; higher tax levies on composite mills than on hand loom and power loom production; and controls on the variety of goods that composite mills were permitted to produce. By the 1970s, Indian consumers began to buy synthetic man-made fabrics, such as terylene and rayon, rather than pure cotton. The man-made fabrics lasted at least twice as long, and this durability had the effect of reducing cloth consumption per capita. Further, until 1985, national policy forbade the composite mills from producing 100 percent synthetics. Thus the new area of greatest growth was reserved for the decentralized sector. In addition , small, decentralized power looms could frequently evade taxes that organized units could not. They were not unionized and did not have to pay the higher pay scales and provide the benefits of the organized sector. Power looms also had many technological advantages over composite mills.4 Perhaps the most important technological change was the availability of electricity on a commercial basis in smaller cities and towns of India after about 1940. This new supply of power enabled many footloose small-scale industries , including power looms, to locate in smaller centers where they had easier and cheaper access to labor, raw materials, processing units, and markets. In the 1950s, the power looms developed the interfirm coordination required...