Coimbatore: The steep appreciation of rupee would lead to a loss of around 5.79 lakh new jobs in textile sector in 2007-08, according to the Confederation of Indian Textile Industry (CITI).
This includes a loss of 2.72 lakh direct jobs, besides those in the allied sectors, CITI, which brought out a report ‘Impact of Textile Export Deceleration on Employment´ after studying the consequences of rupee appreciation, said.
A decline in exports, which is a distinct possibility as of now, will impact employment in the sector negatively and can even lead to loss of existing jobs, the industry’s apex body said.
The trend of employment loss is already discernible. Numbers showed that while direct employment gained from textile export has been reduced by 57,618 in 2006-07 consequent to a slowdown in exports, the allied industries suffered a loss of 65,820 jobs during the year.
The increment of total employment generation from exports had slowed down from 23.48 lakh in 2002-03 to 2.96 lakh in 2003-04 and then picked up by 25.80 lakh in 2004-05.
Estimates showed that deceleration in textile export growth from 16.6% in 2005-06 to 9.2% in 2006-07 (based on estimated 9.2% growth registered during April-January 2006-07) has already pushed down the total incremental employment from the textile export trade by around 1.22 lakh jobs.
The unprecedented appreciation of the rupee would lead not only to stagnation but also decline in exports of textiles and clothings, CITI said.
Unless drastic steps were taken, the loss of over six lakh jobs in 2007-08 will be one of the serious consequences of the export deceleration, it said.
The serious impact on employment growth was an important aspect of export deceleration in this highly labour intensive industry, the study said.
The total direct employment in the textile industry in March 2006 was estimated to be 33.17 million, while indirect employment generated was even higher 54.85 million which took total employment to a massive 88.02 million.
Even in the organised sector, textile accounted for 19% of the employment in the factories sector. According to the most recent estimates, the employment in the industry was expected to go up by 17.37 million over the eleventh plan period to touch 105.39 million.
While the direct employment in the industry would go up by 12.02 million to 45.19 million, the indirect employment would go up by 5.35 million to 60.20 million during the period.
The employment growth was based on the assumption of 12 per cent growth in production and 22% growth in exports, as estimated by the working group of the Planning Commission, the study observed.
According to the Research and Information System for the Non-Aligned and Other Developing Counrties (RIS) study, the total empoyment generated by textile exports declined from 21.2 lakh in 2001-02 to 16.6 lakh in 2004-05.
While direct employment went down from 9.4 lakh to 7.7 lakh, the indirect employment came down from 11.8 lakh to 8.9 lakh during the period.
Using the labour coefficients used in RIS study, CITI has estimated the employment generation from textile exports using the revised export data for the period 2001-02 to 2006-07.
Citing the study, CITI appealed to the Government to take appropriate measures immediately and arrest the rally of rupee.
If this was not possible, the Government, at least could compensate the textile and clothing exporters by returning all the State and Local bodies-level duties, CITI suggested.