40,000 cloth artisans in Ludhiana stare at job loss as they fall out of GST chain
Rehman, who is in the embroidery business for more than 15 years, is one of thousands of artisans who are unable to get work as the did not register under GST, as is required now, and neither have textile firms that sent them cloth to work on.
Tucked away in the outskirts of the industrial city of Ludhiana, in New Kundan Puri area, embroiderer Abdul Rehman is sitting idle on the ground floor of his house in a ‘vehra’ — as clusters of labourers’ houses are called — while on the first and second floors there are more than 20 labourers either just lying on the floor or playing cards. They blame the Goods and Services (GST) Tax for the lack of work.
Rehman, who is in the embroidery business for more than 15 years, is one of thousands of artisans who are unable to get work as they did not register under GST, as is required now, and neither have textile firms that sent them cloth to work on. The textile manufacturing units have been protesting and defying the GST, which brought them under the tax ambit. And the artisans say they are just not equipped to register.
In Rehman’s case, orders of 250 cloth pieces daily has hit zero in the last week, coercing him to send around 80 of his workers on forced leave for an indefinite period.
There are around 40,000 handicrafts workers in Ludhiana involved in embroidery, designing and dyeing of garments as part of value addition. They operate from locations such as Bhahadur Ke Road, Rahon Road, Hargobind Nagar, and Shivpuri.
Falling in the cottage industry segment, most operate from their homes with a daily income varying between Rs 500 and Rs 700.
Rajneesh Bhateja, vice-president, Punjab Cloth Merchant Association, said, “Around 70% of these workers are involved in manual embroidery while the rest are semi-skilled and use machines. They are individuals, and not firms that would get registered under GST. Digital literacy is their biggest concern.”
What stops the order-giving firms to take them in as employees? “Removing these artisans from the supply chain will shift the burden onto wholesalers and retailers.”
The supply chain involves the manufacturer of the cloth, the embroidery (printing or designing), the wholesaler, the retailer, and the consumer.
“It is not viable for such small-scale traders (artisans) to register under GST. But the wholesaler or even retailers who buy embroidered or treated cloth from them will not get input credit of GST (refund) if these artisans do not give them bills with GST charged,” explained Bhateja.
DYEING INDUSTRY ON PRECARIOUS FOOTING
As for the dyeing industry, there are around 300 units in Ludhiana. Though majority of them have registered under GST, they are not getting fresh orders from cloth merchants as the textile industry faces a slowdown due to application and defiance of GST.
Umesh, owner of a dyeing unit at Hargobind Nagar, said, “Earlier I was getting around 500 scarves for dyeing on a daily basis, but the number has dropped to 30. I am not able to pay the salaries and the rent of the shop.”
Ashok Makkar, president of Ludhiana Dyeing Units’ Association, said, “The units in Ludhiana are on the verge of closure as first it was demonetisation that dealt a deadly blow to the sector, and now GST has triggered a temporary shutdown of dyeing units.”