With the shortage of labour, spinning mills in Tamil Nadu are unable to run their units on a daily basis. The number of shifts has come down to two or one per day. With inadequate workforce, they are unable to carry out production to the capacity, resulting in piling up of yarn stocks and plunge in yarn sales.

Since the start of demonetization drive, as most of the mills rely on migrant labourers , who have returned to their home towns and will come back only when there is sufficient cash flow in the market.

Also as per yarn merchants, the migrant labourers are unable to open bank account as they do not have identity proofs.

According to secretary of Coimbatore Yarn Merchants and Brokers Association C T Nehru Ramanathan, due to the fall in production, the loss incurred is anything between 15% and 25% as compared to the business two years ago. Also yarn exports have come down.

He urged the officials from the central government to visit the region to take stock of the industry's problems. Centre's support is needed to revive the industry.

With fall in yarn supply, weaving units have also shrunk their output. The president of Federation of Tamil Nadu Yarn Merchants Association, T Ramasubramaniam said that most weaving units have temporarily closed. They only function two or three times a week or for important orders.

On any given time, most big spinning mills have stock of 15 days to 30 days. Now, it has piled up to three or four months.