Furqan Ali, who was once a master of gemstone-cutting and polishing, now works as a driver in a travel agency. Speaking to NewsCentral24x7, he said, “Kaam nahi hai, kahan se karen? Modi ji ne haalaat hi itne bure kar rakhe hain (There’s no work, what to do? Modi ji has made life difficult for us),” adding, “Koi taxi chalane lag gaya… koi catering ka kaam karne lag gaya, aur bahut to khaali ghar par baith gaye (Some drive taxis, others have joined the catering industry. And many now sit at home, jobless).”
Once a global hub for gemstones, Jaipur has been struggling to hold on to this title for a couple of years now. Many in this unorganised, labour-intensive market have suffered in the past couple of years, But it the artisans who have been hit the worst.
The deescalating demand for gemstones has forced many skilled artisans to leave the industry and work in other fields for considerably lower pay.
“Many who drive electric rickshaws or autos in Jaipur now, were once gem-cutters,” agreed Akshak Agarwal, who owns a gemstones shop in the busy market of Johari Bazar in Jaipur. Akshak said increased unemployment could be one of the many reasons behind the decline in the demand for gemstones.
“My family has been involved in the gemstones business since 1983. Trade is now down to 60 per cent of what it used to be,” he added.
But it’s not just unemployment that is behind this decline. The gemstone industry is one of the many sectors in the country that was adversely affected by Demonetisation.
Anil Kabra, the director of Gemco Exports Pvt Ltd, located in Johari Market, told NewsCentral24x7 that since November 8, 2016, when the Narendra Modi-led Bharatiya Janata Party (BJP) government invalidated 86 per cent of high currency notes overnight, lack of liquidity has been hurting the industry significantly.
The flawed implementation of the GST, too, has had a part to play in the meltdown of this unorganised industry. Imran who owns a small gem-cutting unit in Topkhana said, “Abhi kaam dhandhe ki halat bahut kharab hai. Notebandi se sambhla nahin ke GST ki maar pad gayi (The situation is really tough. We had barely recovered from Demonetisation when GST hit us).”
A 0.25 per cent GST rate for cut and polished precious stones landed hard on small units that had survived for decades on a thin margin. The nature of the business is such that gems are imported and embellished in India, and the finished product is exported.
The entry of GST on imports is one of the primary concerns for those in the industry. Manoj Dhandia, a partner at Dhandia Gems Corporation, told NewsCentral24x7 that when traders send their goods for exhibition in international fairs, GST is imposed on goods that are shipped back. “So, these are our own goods on which we have to pay GST. And that part of GST is always blocked up. So it takes a toll on the financials.”
Colin Shah, vice chairman of The Gem & Jewellery Association Export Promotion Council, told Business Standard, “The industry is also struggling with blockage of working capital due to delays in getting a refund. All these issues have hit overall gems and jewellery exports this financial year.”
The Punjab National Bank scam — when diamantaire Nirav Modi and his uncle Mehul Choksi fled the country after cheating the bank to a tune of almost Rs 14,000 crores — dented the reputation of the jewels and gems industry, noted Dhandia, adding that credit lines had been squeezed.
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“Squeezing the credit line for the jewellery industry as such large, and marking the industry as a riskier sector — I think it is unjustified,” Dhandia said, adding, “If the trade is going down for any reason, it impacts down the line.
“If I am selling less, I will be buying less; I will be manufacturing less. If I am manufacturing less, there will be less work for the artisans. It travels down the line,” Dhandia told said.
Ultimately, the last in the line, in this grotesque version of “trickle-down economics” is the artisan. As Moinuddin sits, transforming raw chunks of hessonite into polished gomed in his small karkhana in Amritpuri — a low-income neighbourhood in Jaipur— he tells NewsCental24x7, “Ab bharpur kaam hi nahin milta hai. Pehle paanch-chhe dukaanon se order aate thhe. Ab ek-do ka hi milte hain (We don’t get enough work now. Earlier, we used to get orders from five or six stores. Now that has dropped down to maybe one or two).” Moinuddin employs about five or six artisans in his shop in a locality that was home to hundreds of such small units. His income is now half of what it used to be.
The artisans have also been victims of institutional apathy. To compete with emerging new markets in other countries, the local artisans of Jaipur are in dire need of technological intervention and capital support to improve their operation.
Dhandia said with some regret, “We haven’t been able to retain our artisan in our trade. What we need is a little bit of support from the government also, so that we can do more on their skill-upgradation.”
He explained that while skill development councils were in place, there is a need for more capital investment. “When the artisan is being trained, it needs a considerable amount of money to learn the skills that are one part of it. And the second part is with technological upgradation; there is a lot of mechanisation. Unfortunately, you can learn to work on those machines, but artisans are unable to afford to buy them.”
Speaking to NewsCentral24x7, Mahesh Chandra Sharma, the general secretary of Rajasthan Congress said, “Since Demonetisation and the implementation of GST, the artisan community, not the traders, have been affected. All of this business runs on cash-rotation. As cash-flow stopped, the big businessmen stopped giving them work… Those who worked in this industry now have to find other means of livelihood. This is a failure for the BJP.”
Sharma said that in its manifesto, the Congress has promised an overhaul of the GST regime and a rehabilitation plan for severely affected units.
On the other hand, BJP’s Rajasthan spokesperson, Jitendra Shrimal, praised GST. He claimed that GST was responsible for, “leading the country towards honest business,” adding that real estate and Jewellery, two industries that were earlier notorious for “do number ka vyapar”, are now heading towards “ek number”.
Since the city was founded in the early 18th century by Maharaja Sawai Jai Singh II, Jaipur has attracted from across the world the most exquisite gems to be cut, polished and mounted. Nearly three centuries later, this industry, which is also part of the city’s heritage, is on the brink of doom.
It’s difficult to gauge the effect of this downturn on the upcoming Lok Sabha polls in the city. But as the residents prepare to exercise their democratic right on May 6, one can only hope that the incumbent regime, or a new one, can prove to be a shot in the arm for both the heritage and the artisans.