A broad perspective on the existing situation of garment industry in Karnataka and how it can be developed

1. The Need to Relocate
A Perspective of Garment Industry in Karnataka
By
P. Ravi Kishore
Regional Manager, ATDC
Among the many industries that are labour intensive, apparel manufacturing stands
out as a unique industry. It may be termed as the oldest industry known to
mankind. Over these thousands of centuries, from a seamstress working at home
to a work force of millions of seamstresses transformed the work into a
burgeoning apparel industry.
Introduction
As an industry in India garment manufacturing started in the early 1900s in the
major cities – Mumbai, and Chennai. Later from exporting Madras checks and art
silk, organised garment production started in the 1960s. It was catering to the
export market hence it was important that it remained sea port centric as shipping
was the only transportation mode of cargo.
The industry flourished during the period due to high unemployment, low literacy
and poor irrigation facilities for agriculture. Employment in that period was
synonymous with jobs in government, PSUs, nationalised banks. These cities
beckoned migrants from the hinterlands in search of employment. With no skill or
least skill, all job seekers, who could not be otherwise employed, found wage
employment.
The government of India encouraged exports to generate foreign exchange to meet
import obligations. The industrial policy of the times reserved garment
manufacturing to small scale sector with a capital investment of Rs. 20 lakhs. The
infrastructure consisted of pedal operated sewing machines with cutting being
done by large scissors. Requirement of electricity was minimal as also space
requirement. Most of garment units were located closer to urban slums from
where tailors were recruited.
As the export market developed and the skills of the Indian garment makers were
publicised overseas, buyers started realising Indian exporters. Many importers and
buyers recognised India as a low cost production centre. To encourage exports and
gainfully utilise the unemployed youth, government offered incentives to exporters.
Among the many incentives of the times duty drawback was attractive in addition
to currency exchange rate. The amount of drawback was given as a percentage of

2. the FOB value per unit. These incentives encouraged many businessmen and
entrepreneurs to start export business particularly garment production.
Garment Manufacturing in Karnataka
In Bangalore, the early garment units in the 1970s were located in the Lalbagh
neighbourhood and Mission Road. Most of tailors were employed from the
surrounding slums. Initial operators were men. The units were housed in small
sheds and houses. A few days of training sufficed for sewing operations. Most of
the production was on piece rate basis where a tailor stitched a complete garment.
Initial exports were to expatriates who had established business connections with
retail houses in the UK, Germany, France, Canada, and the USA.
As the business increased exporters expanded their production capacities to
adjoining buildings large enough to house 30-50 machines with adequate lighting.
Often these units were spread over 2 to 3 levels with no or inadequate wash rooms
and ventilation. As most of the workers were men, these were not felt necessary.
With expansion of business, assembly style production was adopted. This
approach required expansion of work force and infrastructure. Women were being
employed as tailors to stitch parts which were being assembled into garments by
experienced men tailors. Men were also employed as sample tailors.
As Bangalore became popular centre for garment production, exporters from
Mumbai and Delhi opened their operations in the city. The availability of space,
workers, and climate together made the city attractive destination. In addition it
was also found to be cheaper than other cities. Being a small town distances to
cover were short unlike Mumbai and Delhi. The airport was conveniently located
and the sea port of Chennai was overnight journey.
During the 90s the many export houses of Mumbai rushed to open new units in
Bangalore. From the traditional Lalbaugh area, the garment units moved out to
other areas where slums existed such as near Yeshwanthapur, KR Puram,
Rajajinagar. Noticing the growth
of the industry, the government
declared these as industrial areas.
Land was allotted in the industrial
areas and the garment units were
recognised as small scale industrial
units. They were required to
follow the various laws and
regulations. The small units

3. transformed into large industrial manufacturing factories.
From employing a few dozens of workers, the garment units came to recruit large
work force of a few hundred to thousands. To accommodate such large
operations, each unit occupied a few acres of land and to meet the regulations of
the law they had to construct various facilities including wash rooms, crèche,
canteen etc. Simultaneously, to increase production the traditional pedal machines
were replaced with high speed industrial sewing machines. This required setting up
training facility in the factory. Large number of women were trained and employed
in the industry.
The factories worked from 9:00 am to 5:00 pm. Overtime was common to meet
the delivery deadlines. As most of the workers were from the nearby areas, no
transport was arranged and they walk back home. As there were no other
industries to employ such large numbers, the garment units flourished during the
period 1980 to 2000. These labour intensive industrial units were spread out and
located in Bangalore in the 90s on Peenya Dasarahalli, Yeshwanthapur,
Mahadevapura, Pottery Town, Rajajinagar Industrial area, Kamakshipalya, Wilson
Garden, Tavarkere, Begur Road, Mysore Road, RT Nagar, Nagarbhavi, Srirampura,
Chamarajpet etc. All these areas were densely populated with migrant workers
from neighbouring states.
It was common practice for the wives to work in the garment units while their
husbands were employed elsewhere. Whenever the husband moved to another part
of the city, the wife too moved and found placement in a garment factory nearby.
Health of individuals and treatment at work place by male supervisors were mainly
responsible for absenteeism and attrition. Mandatory overtime, salaries that are just
above minimum wages also deterred new recruits. In addition those who entered
the garment units in the 80s at the age of 18 grew old by 2000 and faced problems
such as poor eyesight, back ache and other occupational problems. Many of these
women discouraged the younger generations to work in the industry.
Competition for Workforce
The advent of organised retail industry in 2000 posed severe competition in terms
of work force. Post liberalisation, large format retail chains opened up. In
Bangalore the first such mall opened near Koramangala was perceived as a threat
by many garment units in the vicinity. This was expressed by one of the leading
exporters with factories and offices in the area.
These modern retailers offer employment opportunities at different levels –
helpers, sales associates, sales supervisors, tellers, category executives, floor
managers, department managers, inventory assistants etc. The entry level
qualification in these stores is minimal education 5th
standard. With basic training,

4. these girls and boys found employment which did not make too many demands
and offered decent work environment, and remuneration that matches the garment
industry. Many employees, both young men and women, began to move the retail.
This caused severe shortage of shop floor work force. So the urban workforce
started shifting to alternate employments.
Consequently, the garment units are forced to ferry workers from distant places,
sometimes as faraway places as 60 kms. The transportation of workers added to
the cost of production of the garment units.
The period 2000 also saw a revolution in job market with IT & ET companies and
call centres, making a big bang entry. These companies offered employment at
entry level to school pass outs and as well as dropouts. Most of the jobs included
customer handling through call centres which required good communication.
Young girls and boys, particularly those who did not want to pursue further
academics, opted to enter into this market. The recruiters trained the work force
and offered lucrative salaries with other social benefits. This industry started hiring
those people who could have been middle level staff of garment units. This shift
in employment in the labour and resource intensive manufacturing industry is
represented graphically below.
Thus the employment scene saw a major change. Employment opportunities in the
private sector gathered momentum. Hitherto only garment sector was providing
such opportunities, but with high degree of physical work stress. The new
employers offered less physical stress and higher remuneration which attracted the
youth. This shift in employment types created great stress on the HR of the
garment companies in the large urban conglomerates like Bangalore.
39.51
35.49
49.96
51.17
44.44
48.08
55.86
50.63
49.4
45.01
38.69
37.98
31.21
31.8
LABOUR & RESOURCE
INTENSIVE
MANUFACTURES IN
TOTAL EXPORTS

5. Competition for Real estate
The garment companies to meet the various regulatory and statutory requirements
have to find sufficient space to accommodate all the necessities. Every unit that
employs 100 and above workers and staff is mandated by law to have in-house first
aid centre, crèche for the children of the employees, adequate number of rest
rooms for women and men and other facilities including a plant for waste water
recycling. This meant the companies had to find adequate land to construct
modern factories. The real estate cost in most of the cities including Bangalore sky-
rocketed, forcing the garment units to move away from the centre of the cities to
their peripheries. The traditional factory lands in the cities soon became huge
residential and office complexes to house sleek and modern IT & ET companies
and their support services including call centres.
The cost of leased factory premises which was about Rs.2.00 – Rs.3.50 in the 90s
rose to Rs.12.00 – Rs.16.00 at present in Bangalore. Alternately to construct a
factory, the cost of industrial land in the city in 2014 is about Rs. 4500 to Rs. 7500
per sq. ft. or Rs. 100 to Rs. 120 millions. In addition the cost of construction works
out to Rs. 2250 to Rs. 3500 per sq. ft. As a result many garment manufacturers
have preferred to move out of the city to the hinterlands.
Garment factories in cities like Bangalore moved to the outskirts or nearby rural
areas such as Sarjapura, Whitefield, Hosekote, Nelamangala, Bidadi, Chandrapura,
Yelahanka, Doddaballapur etc. However, as connectivity improved with the city
through local trains and buses people movement became easier. Today all the
suburbs, and rural areas merged with the city, thus increasing the wage rates. The
new trend to build satellite towns increases their real estate prices as well. In
addition leading e-retail companies have stepped up their activities by investing in
warehouses of 1-2 million sq. ft.
The garment factories in Karnataka are thus faced with two serious issues –
manpower and real estate. Competition from service sector and other industries is
a major threat to the industry unless serious and concerted steps are taken by the
industry and government. These two vital requirements of the industry can be
addressed and included in the PM’s Vision 2020. Some of the steps to be initiated
are stated below:
1. The work force that is engaged by the industry is predominantly rural. A
majority of the women work as daily wage labour either in agriculture fields
or in construction. In the drought prone areas of the state such as Bellary,
Bagalkot, Raichur, Bidar, Gulbarga, Gadag, Tumkur comprising of Pavagad
and Madhugiri, etc., unemployment is very high. These places also have
good literacy rate with many girls and boys passing out of schools. To

6. encourage education mid-day meal programmes and hostels are set up by
the state governments. Villagers around these urban centres find difficulty in
employment even as daily wage workers. They tend to migrate to the cities
like Bangalore, Hyderabad or Mumbai. These areas also thrive in flesh trade.
(Some of them were trained and re-habilitated by ATDC Bangalore).
As these areas have sufficient number of educated and semi-literate
population, they offer great opportunity for the garment industry. The
district wise population of these places is as below:
District Total Population Male Female
Rural Urban Rural Urban
Bellary 2,532,383 817,014 463,388 796,024 455,957
Bagalkot 1,890,826 651,581 301,321 640,455 297,469
Raichur 1,924,773 720,068 246,425 717,291 240,989
Belgaum 4,778,439 1,813,926 613,178 1,753,813 597,522
Bidar 1,700,018 129,387 110,279 123,634 103,314
Gadag 1,065,235 348,298 190,179 337,152 189,606
Tumkur 2,681,449 1,050,056 304,714 1,028,609 298,070
Koppal 1,391,292 584,260 117,219 573,399 116,414
Bijapur 2,175,102 859,254 253,699 815,057 247,092
Yadgir 1,172,985 479,834 111,270 472,648 109,233
2. Selection of locations
The shop floor employees, particularly ISMOs are women. Most of the
women are untrained and migrate from other employments particularly
agriculture. It is the initial stage of employment shift from agriculture it may
be worthwhile to discuss the type of agricultural practices. In the river
basins, farming activities follow the seasons and usually crops are grown
three to four times in a year. However, in irrigated lands the farming activity
is based on rainfall or ground water. Farming in rain fed lands is erratic.
Some of these areas continuously face rainfall deficit and are termed
drought prone or chronic drought areas.
The Karnataka districts of Bijapur, Gulbarga, Bidar, and Raichur are
drought prone with rainfall deficiency of almost 70%. The Bagalkote,
Belgaum, Tumkur and Bellary districts are less prone to drought like

7. conditions. As a result women employed in agriculture look for alternate
sources for livelihood, particularly those living in the rural areas.
The workers dependent on agriculture in these districts are considerable.
When the rainfall is scanty they tend to search for alternate employment.
There are not many industries in these districts that can deploy the large
workforce. The organised garment manufacturing industry can possibly give
them alternate employment. Considering attrition also the industry can
sustain its production capacity. The taluk wise agriculture workers in the
urban and rural areas of the districts are as below:
DISTRICTWISE AGRICULTURE WORKERS - 2001 CENSUS
District Taluk Male Female Total
Tumkur Chikkanayakanahalli 8480 13665 22145
Gubbi 11587 22145 33732
Koratagere 8954 15357 24311
Kunigal 5078 7187 12265
Madhugiri 20641 33145 53786
Pavagada 20504 31740 52244
Sira 16689 24799 41488
Tiptur 7020 14804 21824
Tumkur 13463 23482 36945
Turuvekere 5683 8663 14346
Gulbarga Afzalpur 15501 21064 36565
Aland 29070 47847 76917
Chincholi 18431 34803 53234
Chittapur 19778 27954 47732
Gulbarga 20695 30201 50896
Jewargi 20443 36678 57121
Sedam 11401 25505 36906
Raichur Devdurga 32993 13366 46359
Lingasugur 39537 10167 49704
Manvi 34643 12557 47200
Raichur 25859 10870 36729
Sindhanur 39316 13949 53265
Bagalkote Badami 25687 38119 63806
Bagalkote 16384 23605 39989
Bilagi 14964 22713 37677
Hunagund 18719 27826 46545
Jamakhandi 28234 31821 60055
Mudhol 24345 30826 55171
Bidar Aurad 17137 21186 38323
B. Kalyan 17743 24750 42493
Bhalki 19699 23052 42751
Bidar 19884 20404 40288

8. Humnabad 21043 24149 45192
Bijapur B. Bagewadi 24270 36785 61055
Bijapur 28622 34979 63601
Indi 28646 34374 63020
Muddebihal 15463 23808 39271
Sindagi 25891 33901 59792
Belgaum Athani 27191 60706 87897
Bailhongal 23047 50068 73115
Belgavi 14149 25416 39565
Chikkodi 28346 57869 86215
Gokak 39575 72958 112533
Hukkeri 20050 40065 60115
Khanapur 14601 27414 42015
Raibag 17760 45344 63104
Ramdurg 18899 33758 52657
Savadatti 25642 52397 78039
Bellary Bellary 35197 45519 80716
Hadagali 17225 26559 43784
HB Halli 13701 21799 35500
Hospet 26288 31160 57448
Kudligi 15535 32538 48073
Sandur 7911 20272 28183
Siruguppa 28781 38948 67729
3. District wise Human Development Index
Distribution of Poor in
Karnataka 1999-2000
District
%age in Total
Population
Gulbarga 7.5
Raichur 5.5
Belgaum 7.2
Bijapur 6.7
Dharwad 7.4
Mysore 7.2

9. Among the various indices that indicate
economic development of an area is the
h
ousehold income of the number
of households in the area.
Although Karnataka has 1-10
percent of its population below
poverty, the incidence is greater in
North Karnataka districts. As
explained earlier, although
Bangalore Urban district shows
highest percentage of poor, the
current trend of various
opportunities present to them has
brought down the percentage as
per the recent studies. It can also
be stated that the process of
urbanisation is less evident in these districts. In addition, the agricultural
wages are the lowest in the districts of Raichur, Bellary, Bijapur, Gulbarga,
Dharwad, and Kolar as compared to other parts of the state. While the
average wages of the state for agricultural labourers is Rs. 218 and Rs.155
for men and women respectively, in these districts they are Rs. 180 to
Rs.200 for men and Rs. 100 to Rs.140 for women. Consequently most of
the population look for alternate livelihood which can get them steady
income.
In absolute terms, there are more BPL families in the districts of Belgaum
and Gulbarga. Mysore has moderately high BPL families while Hassan and
Haveri are on the border of being moderately high.
Dakshina Kannada 5.5
Kolar 5.7
Bangalore Urban 11.5

10. However, as percentage of the total district rural population Gulbarga has
the unique distinction of having the highest percentage of BPL families,
followed by Chikamagalore and Uttara Kannada. Chamarajanagara, Haveri
and Mysore have more BPL families the remaining districts in the state.
The Unemployment by district