Well before the sun rises on the ghats of Banaras, Abdul Hasrat wakes up and cleans the cycle rickshaw he recently acquired. Closer to dawn, he pulls it from his neighbourhood in Jaitpura-Chora colony in the city to start his day’s work, earning 20-30 rupees for each ride. Daily pickings vary, but stay within a stable range: say, an average of Rs 200. He’s happy, but therein lies one of the harshest indictments possible of the scenario in India’s craft traditions—and the state of artisans within it.
For a year ago, Hasrat was part of the Banarasi silk weavers, and earned around Rs 1,000-1,200 a week, till even that started getting wobbly. “After notebandi, the Banarasi silk production has been on a decline. I have a family to feed,” he says.
This story resonates with local artisans of all hues—even small traders linked to these informal sectors. The handicrafts and handlooms sector, already in a delicate state of health in a market dominated by mass-produced goods, has had to face blow after blow in the post-DeMo climate: many have been forced to find alternate careers. The hardest hit is the unorganised sector that has 93 per cent of India’s working population. That is 4,460 lakh people, half of them self-employed. Additionally, the crafts and handlooms sector employs 110 lakh, out of whom 43 lakh artisans work in handlooms alone. Crucially, 77 per cent of them are women—so the implications on self-reliance indices are as vital as they are on the robustness of India’s handloom traditions.
Craftsmen run their trade on the age-old practice of credit. They take raw materials from suppliers and pay them only after sales yield income. “Since demonetisation, the weavers are facing a cash crunch,” says Madhura Dutta of artisans’ body AIACWA. And suppliers want cash up front. This fundamental shift in the terms of business has resulted in a near-50 per cent fall in production. That means DeMo accentuated the gloom in the sector, where handicrafts were anyway slowly becoming a profession families opt out of because of the lack of favourable laws.
The statistics are dire. The total number of weavers had dipped precipitously from 63 lakh to 43.32 lakh between 1995-96 and 2009-10—when the second and third handloom censuses were conducted. Experts fear a further exponential fall after last year’s economic reforms.
Weavers are an endangered breed anyway in India: the total number dipped from 63 lakh to 43 lakh by 2009-10. Experts now fear an exponential fall after last year.
Laila Tyabji of handlooms body Dastakar recalls several calls she got from distressed villagers telling her of the deprivation caused by cash drought. Rural banks, often based in small towns and a long day’s journey away for many, were also closed due to lack of funds, forcing artisans to live without cash for days together. A local artisan says it simply, “I thought demonetisation was supposed to uplift us. Clearly it is only meant for helping the rich.”
The unorganised sector was slowly limping back to normalcy when GST came as another massive blow. In a presentation to the government, Jaya Jaitly and Ritu Sethi of the National Association of Craftspeople in India say conditions have further deteriorated under the GST regime.
Artisans who sell across state lines and have a turnover under Rs 20 lakh are exempt from filing GST only if they have a valid PAN card and send packages through an e-way bill. This, explains Meeta Mastani, who has worked with artisans for over 25 years, is simply not a feasible model.
Yograj of Kaziwala village, Bijnor district, makes handmade wooden items like juda pins (hairpins) for a living. He neither has a PAN card, nor does he have a courier service in his village. With a monthly income of just around Rs 10,000 and a family of seven to feed, he has no means to hire an accountant to file quarterly GST.
Nishank Goyal of Masters India highlights the seemingly arbitrary taxes such artisans are now forced to comply with. “Under GST, threads, which used to be exempt from tax, now come under the five per cent bracket. This proves even more problematic for artisans—while they are exempt from GST, they still have to show returns and hire accountants,” he says.
Together, DeMo and GST, the second coming even as the crunch caused by the first was easing, have had an effect on the demand side of the artisan market too. Festive sales this year were down by almost 40-50 per cent, even a year after DeMo, lament local artisans. Jaspal Singh, who sells diyas and pottery products in the Malviya Nagar market in Delhi during the Diwali season, says not even half his stock was sold. “It’s scary. I usually make around Rs 10,000 during this season. This time, my sales barely reached Rs 5000,” he says.
Evidently, demonetisation has managed to change the spending behaviour of consumers, especially the business class. The blow caused by DeMo in the initial days has made consumers wary of spending too much money on festivities or extravaganzas, particularly in the form of cash.
Take Delhi’s Dastkar mela: the footfall in the mela events over the past year has been negligible compared to previous years. “This is despite the fact that we have told everyone that payment through cards is available in the mela. People simply no longer want to spend money,” says Tyabji.
Artisans in the older networks face another looming threat: e-commerce websites. “Consumers are slowly moving to the internet to buy their products because of the advantage of card transactions, this cuts into our sales even more,” says Hasrat. Websites also feature regular sales, something local artisans are unable to match. This at a time when interest in locally produced goods/ handicrafts is increasing both in the domestic and international markets. “Small family units that make niche products with no financial or social security have no buffers to withstand such unexpected changes,” says Tyabji, adding that the unforeseen price increase due to GST has caused uncertainty in both consumer and craftsperson.
Many artisans have tied up with e-commerce sites in order to boost sales. Fabriclore, an e-store in this line, sources its materials from artisan collectives. Started a month before DeMo by Anupam Arya, the site helped several artisans maintain a constant stream of income. “In the beginning, it was extremely tough. Our consumers had disappeared and the artisans were struggling,” says Arya. He estimates that artisans employed by Fabriclore alone lost over Rs 20 lakh in revenue in those two post-DeMo months. “Slowly, though, business picked up.” And luckily, he says, the website also saw an increase in prepaid orders because of demonetisation, a move that helped pay the artisans on time.
A worker in the crafts sector says such economic policy changes “cut through the local artisan sector like a hot knife through butter”. To expect rural artisans, already without access to retail spaces and advertising budgets, to pay the same taxes and charge the same prices as branded and industrially manufactured products is tantamount to wiping them out. Already marginalised and struggling, they view such reforms as a signal that their craft has no future in the country.