Hosiery workers in Tamil Nadu have got a pay hike.

In addition to the minimum rates of basic wages fixed, employees will also have to be paid dearness allowance. Dearness allowance is linked to the average Chennai city consumer price index number for the year 2000, which is 475 points, with base year being 1982 and is equal to 100 points. For every rise of one point over and above 475 points, an increase of Rs 3.80 per month shall be paid as dearness allowance.

DA shall be calculated on April 1 of every year on the basis of the average of the indices for the preceding twelve months, namely, from January to December. Tirupur, a city of six lakh people in Tamil Nadu, produces 90 per cent of India’s hosiery and exports hosiery and cotton garments worth Rs 12,000 crores a year. The factories employ thousands of women. The overwhelming majority of all economic activity in Tirupur centers on the garment trade.

Over the last three years or so, Tirupur’s exporters have had to face four main challenges: the recession in the US, volatility in the price of cotton yarn, environmental restrictions on dyeing units, and the euro crisis. Half of Tirupur’s exports go to Europe.