The death knell sounded by the government on the AFT Mills sets a wrong precedent and could have far-reaching implications on the industrial climate in Puducherry, observers said.
As an immediate fallout of the closure order, workers fear that a similar fate awaits other sick units such as the Bharathi and Swadeshi Mills or the cooperative sugar mill. The closure of the iconic institution also undermines a core part of Puducherry’s cultural and historical identity.
“It is unfortunate that the government, which should be a model employer, sounds the death knell on its own enterprise. It also sets a bad precedent for any other employer who can now feel emboldened to shut shop at the first sign of a crisis,” said K. Lakshminarayanan, Parliamentary Secretary to the Chief Minister and for long leader of the INTUC-led workers union at AFT.
The unit, started as Rodier Mill in 1898, was rechristened as Anglo French Textiles in 1955. It was a private mill and in its heydays, was the single largest factory of the UT and was considered the backbone of the economy apart from gaining brand recognition in European markets.
In 1983, when the owner of the mill decided to lock it down, the Government of India was magnanimous to take possession of the Mill under Acquisition and Transfer of Textile Undertaking Act 1985 and handed it over to the Government of Puducherry. The AFT became a public sector unit governed by a Board of Directors appointed by the Government.
The closure of the 122-year-old prominent public sector textile mill is a “retrograde step” and reflects the administration’s lack of will to revive a troubled unit, said M. Ramadass, former MP.
“The mechanical and bureaucratic action overlooks the human faces behind the government files,” he said.
Mr. Ramadass has sought the intervention of Prime Minister Narendra Modi in averting closure of the AFT and mooting a plan to revive the mill. In a memorandum, with copies to Union Home Minister Amit Shah and Textiles Minister Smriti Irani, Mr. Ramadass said the closure of the mill will considerably affect industrial production, State Domestic Product (SDP), productivity, employment and generate a cycle of stagnation and poverty.
The AFT was functioning efficiently, until the collapse of a section in 2004 compelled the stoppage of production in A unit. In 2011, the Thane cyclone virtually decimated several structures. Since then, a lethal combination of administrative inefficiency, financial mismanagement, corruption and undue political intervention sealed the AFT’s fate.
And, with the management tiding over financial woes by borrowing from banks, PIPDIC and other financial institutions, it only led to mounting losses and debts. In 2017, the one-man Commission appointed by the government recommended its closure and compensating workers with proceeds from sale of assets.
“It is akin to burning down a house to get rid of a rat. The outgo for compensation is to the tune of ₹150 crore while the assets are anywhere in the range of ₹1,500 crore,” said Mr. Lakshminarayanan.
Misgivings are also rife about the report of the committee which failed to consolidate an expert view but confined to analysing the budget over a decade. “The committee has failed to make SWOT analysis of the mill to arrive at its recommendation and conclusion,” said Mr. Ramadass.
The memorandum suggested integrating the four textile related mills in the government and cooperative sector of Puducherry (Jayaprakash Narayana mill in Karaikal, Spinco, Swadeshi and Bharathi) with AFT under one Corporation with an associated cotton farm at Karaikal under the supervision of the Agricultural College of Karaikal.
The constitution of a team of textile experts to suggest a revival plan, a grant of ₹1000 crore as a one-time good will grant/long-term loan and entrusting the mill with professional business managers are also suggested.