Women-intensive handloom industry may suffer under GST

Traditional weaving on a Pochampally Saree Picture By: Gaatha.com

The introduction of the Goods and Service Tax (GST) is hitting the handloom industry hard. Apart from causing massive changes, it has put this labour intensive sector of the economy at unrest. The question worrying all? Will the industry break under pressure of the GST regime?

The handloom sector comes second to agriculture in terms of number of people employed in it with 43.32 lakh people. Weavers are mostly from the vulnerable sections of the society and there is a higher ratio of women being employed in the handloom sector, as high as 77.9%. The industry is based in the rural areas and nearly 36.9% are below the poverty line,  and most of the workers belong to the informal sector. The output of the sector is nearly 14% of the total textile production, contributing to about 4% in the GDP.

Rising yard prices and shrinking markets for the finished goods of the handloom sector combined together push the workers into misery and debt traps that is often ending with suicides.

As per the GST regulations, silk has been exempted from taxes, however natural fibers will be charged 5%. The original muga silk starts from 25,000 onwards, and customers are now skeptical if they would want to shell out even more than what they are paying already.
Boutiques in the north eastern part of the country have helped the industry in facing the competition from its cheap substitutes, providing more money to an area that supplies 60% of the total handloom produce of the country. Tamil Nadu’s textile cluster, is upset over GST rates imposed on textile manufacturers, including job workers, who were so far exempted from any form of tax.

Md. Rafiq, a weaver from Baruch, whose family has been in this business for the pasr 160 says, that he is not bothered by what the government imposes on them as tax. “On an average, we produce of a kilogram of cloth everyday and we are earning about 6000 rupees. A 5% tax will put me down and I won’t be able to continue. I will sell the machine and probably start driving a car. Mr Modi has himself awarded me a medal for my family’s work while he was the chief minister of Gujarat, I am hoping to not let go of my family legacy,” he told SheThePeople.

An employee of Eka, a boutique selling handlooms said, “I think there is a minimum output clause, so not all weavers will have to pay. But some weavers are very well doeven in the handloom sector and should be liable to pay the GST, since it’s applicable to for all. As of now it sounds like a nuisance but it will get better in time for sure.”

The Erode Handloom Cloth Merchants Association, which is again appealing to finance minister Arun Jaitley to withdraw the 5% GST rate on textiles, is planning an indefinite strike from Wednesday if its demand is not accepted.

Weavers and producers from the handloom industry have been exempted from paying taxes. Families have been involved in this art since generation and imposing a tax on it would put their occupation at stake as they would not be able to earn as much as they already do.