Budget fails to cheer diamond industry

Diamond industry today found nothing to cheer about in the union budget for 2009-10 presented by finance minister Pranab Mukherjee. The industry players in Surat- the diamond city of India- termed the budget as disappointing as the beleaguered diamond industry was expecting a special package to counter recession blues.

"As far as diamond trade is concerned I have never seen such a disappointing union budget in my life. Diamond industry contributes around Rs 75,000 crore to country's exports and provides employment to millions of people. Before general elections, it seemed that the industry would get some special package. However, finance minister has offered nothing to diamond industry as well as to its workers", said CP Vanani, president, Surat Diamond Association (SDA).

"There is nothing in the budget for diamond exports", said Mehul Choksi, chairman, Gitanjali Group. However, he welcomed the move to fully exempt branded jewellery from excise duty and extention of 2 per cent interest subvention to March 31, 2010.

According to Vanani, extension of interest subvention and excise exemption for branded jewellery will not help struggling diamond industry as the branded jewellery forms a very little part of gems and jewellery industry in the country.

"The government should have offered housing or education schemes for diamond workers. Special package was our main demand, government should, at lease,  have exempted excise duty on high-end technological equipments that diamond industry players buy to upgrade their business", he added.

"Reduction in interest rates could have been a better incentive for diamond business, which is facing liquidity crisis", he suggested.

It may be mentioned here that dimond industry one the worst hit by recession. Approximately 4 lakh diamond workers had to lose their jobs due to recession. Majority of these labour force had shifted to other industries such as textile and agriculture.

However, diamond industry have started regaining its sparkle, as around 2,000 diamond units have resumed operations and 1,000 still are non-operational in Surat.

Now, diamond industry is facing a problem of manpower crunch as many diamond workers, who switched over to other occupations, are reluctant to again opt this business.