Sluggish global demand, coupled with the bankruptcy of a few firms, have resulted in large-scale unemployment in the diamond industry in Gujarat, especially in and around Surat
Sluggish global demand, coupled with the bankruptcy of a few firms, have resulted in large-scale unemployment in the diamond industry in Gujarat, especially in and around Surat.
According to the President of Gujarat Diamond Workers’ Union (GDWU) Ranmal Jilariya, the double whammy of demonetisation and implementation of Goods and Service Tax (GST) have taken a toll of many diamond units.
The owners of diamond cutting and polishing units were somehow able to run their businesses, but in 2018-19 global demand remained sluggish and as a result of it few firms became bankrupt and left thousands of employees jobless, said Jilariya, adding that many firms retrenched their employees gradually to avoid controversy.
He claims that nearly one lakh workers at present are without jobs in the diamond industry. Supporting Jilariya’s claim, a diamond trader engaged in exports of diamond says that in 2017-18 export from Sachin Special Economic Zone (SEZ) near Surat was nearly `16,000 crore. However, in 2018-19, the export from the SEZ has plummeted to `6,770 crores.
Closure of companies owned by diamantaire Nirav Modi and Mehul Choksi which between them had a lion’s share of 70% in the SEZ following the `11,000 crore PNB loan scam has hit the Surat diamond trade badly.
There are over 20,000 diamond units functioning across Gujarat, employing nearly 18 to 20 lakh workers. The industry is facing major challenges but still, it is sustaining and doing an average performance, said Babubhai Gujarati, president of Surat Diamond Association. Interestingly, he dismisses the claims of large scale unemployment made by the workers’ union though he accepts that people might have lost their jobs, but not in such high numbers as claimed by GDWU.
On the other hand, Jilariya sticks to the figure and blames some owners of diamond units for diverting funds into speculative activities in real estate and stock markets. Currently, both markets are experiencing a slowdown.
As thousands of crores of rupees taken out of diamond industry are stuck, many diamond units are now experiencing liquidity crunch and in the process workers are the ultimate sufferer, he claims.
Requesting anonymity, a diamond cutting and polishing unit owner said that global demand of diamond was not encouraging and it would be difficult for smaller players in the industry to sustain in a cut-throat competition. Meanwhile, GDWU has opposed the decision of some diamond units to go on summer vacation for a fortnight from Thursday.
The union has also submitted a memorandum to Surat Collector and demanded that there shouldn’t be any vacation looking to the financial condition of workers.
Surat Ratna Kalakar Sangh president Jaysukh Gajera said that his organisation condemned the decision of those units who have declared vacation that too cutting salaries of diamond workers.
Sources in the industry said that in the recent time’s incidences of siphoning off funds (non-payment of the purchased diamond, among others) by diamond merchants have come to light. “Diamond industry runs on trust, sometimes miscreant traders suddenly flee with diamonds worth crores. Such incidents only add to the mounting woes of Surat’s diamond industry,” the sources said.
Disclaimer: This information has been collected through secondary research and TJM Media Pvt Ltd. is not responsible for any errors in the same.
