Modi’s moves fail to revive diamond polishing units

January 1st, 2009 - 5:46 pm ICT by IANS  

Narendra ModiSurat, Jan 1 (IANS) Gujarat Chief Minister Narendra Modi’s Dec 26 assurance that diamond workers’ livelihood would be secured has not instilled confidence among them. Not all closed diamond polishing units have resumed operations, and eight workers have committed suicide in less than a week since then.”The situation is not good in the diamond polishing industry in Surat even now. We have cut down production by more than 50 percent. Over 30 percent of units still remain closed, and eight workers have committed suicide,” Rajesh Thakur, a senior manager with diamond polisher Roshni Jewels, told IANS.

Roshni, which resumed operations Dec 25, is among the nearly 2,000 small units engaged in processing uncut diamonds that shut shop following a slump in demand in the domestic and international markets, and American and British importers cancelled orders.

The Gems and Jewellery Export Promotion Council (GJEPC) also asked members to stop import of rough diamonds till Dec 25 because of the slump.

So much so, the downturn forced diamond polishing units to extend the Diwali vacation by a week last month to avoid paying daily wage earners during non-production days.

This, despite the government virtually abolishing the 5 percent levy on imported polished diamonds by bringing it to zero to help the trade in 2007.

At an international conference on gems and jewellery here last week, Modi lashed out at industry leaders in his inaugural address, and asked them to work in the interest of the workers even while refusing any bailout package for the ailing sector.

However, despite Modi’s warnings to the diamond polishing units, workers have been laid off, with Bhavani Gems, a large-scale diamond polishing unit, retrenching over 700 employees last week.

Pink slips, coupled with the extended vacation, have forced several daily-wage diamond workers to commit suicide, say those familiar with the situation, like Roshni’s Thakur.

The state government intervened last month and set a Jan 1 deadline for reopening the units, but around 30 percent of these are yet to resume operations.

Vaijayanti Pandit, who oversees the gems and jewellery committee of Federation of Indian Chambers of Commerce and Industry’s (Ficci’s) western region, said the domestic diamond industry has been particularly hit as it is heavily dependent on the recession-battered US and Europe.

“Over 12,000 gems and jewellery units in Surat have contributed less than Rs.100,000 for the Mumbai terror attack victims,” Pandit told IANS to portray the cash-crunch the industry was facing.

The Surat diamond industry employs more than 700,000 workers, while over 2.5 million people are indirectly associated with the trade.

The industry generates over $4 billion from exports every year, which represents almost 25 percent value addition to imported rough diamonds. However, India’s share in global exports is only 4 percent.

In 2006-2007, the industry imported $8.8 billion of rough diamonds and exported $10.9 billion of polished gems.

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