Jewellers begin retrenching artisans

If the proposed 1% excise duty isn't rolled back, the jewellers threaten of retrenchment on mass scale

Jewellers’ protest against the government’s proposed one per cent excise duty levy has taken a turn for the worse with ornaments manufacturers and retailers retrenching daily wage earners, ie, artisans.

Amid hopes of a rollback in excise duty, jewellers intensified protests with around 150,000 people gathered in Pune on Thursday, a day after around 25,000 jewellers and bullion dealers organised a mass rally at Azaad Maidan here. In a couple days, jewellers plan to organise a large rally in New Delhi, the date for which date is yet to be finalised.

Retrenchment of artisans assumes significance in terms of investment made and time spent on their training.

“We have started retrenching workers, including artisans gradually as our shops were closed for the past 10 days. Providing them basic facilities in manufacturing premises with minimum considerable amount of daily wages adds costs to us. So, when the entire business is at standstill, it is advisable to save whatever the amount we can. Going forward, we would prefer to shut shops rather than face the excise department's wrath,” said a senior official of India Bullion and Jewellers Association (IBJA).

IBJA has approached several ministers and bureaucrats to include excise duty in the agenda of the meeting of industry leaders convened on March 18 on the assessment of the gold monetisation scheme (GMS).

Meanwhile, jewellers estimate the industry has incurred a loss of around Rs 60,000 crore over the past 10 days.

“Craftsmen are the backbone of the entire jewellery industry. The excise duty levy would require lots of changes in the functioning of the industry. All players, including raw material suppliers, craftsmen are interconnected. So, complete compliance of the guidelines would be challenging. There will be some gaps in terms of interpretation which would invite actions from the excise department. Especially when implementations of the goods and services tax (GST) is under advanced stage of discussion, the government should not levy any additional duty,” said Vinod Hayagriv, managing director, C Krishna Chetty & Sons.

Industry estimates that there are around 3.5 million workers, including skilled craftsmen and unskilled workers. "Retrenchment has started at a lower scale now. If excise duty is not rolled back we would retrench more workers," said an industry official.

Meanwhile, Ashok Minawala, has urged the government to convene a meeting with jewellers to understand their problems.

“We have already asked the government to increase import duty by one per cent to the existing 10 per cent instead of excise duty,” said Minawala.