No Hope In Sight: Varanasi Traditional Weavers Turn To Rickshaw Driving As GST Slashes Business

News World India | 0
| October 3 , 2017 , 16:44 IST

Banarsi saris are a cultural icon, an important part of Indian fashion for centuries, but recent economic measures have imperilled the weavers who work hard to create the legendary Banarsi silk saris.

Traditional weaving in Prime Minister Narendra Modi's own constituency of Varanasi in Uttar Pradesh has taken a massive hit due to the dual effects of demonetisation and implementation of the Goods and Services Tax (GST).

The famous Banarsi silk industry that dates back to the 16th century was inching back to recovery after the demonetisation of Rs 500 and Rs 1,000 currency notes, but as a result of GST, the business has fallen by nearly 50 percent, forcing many talented traditional weavers to drive rickshaws to eke out a living.  

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A weaver continuing with his trade Altafur Rehman revealed, “I am facing a bit of trouble buying food.”

Earlier Rehman, the only earning member of a family of four, used to earn Rs 800 - Rs 1,000 from weaving Banarsi silk saris, but now his earning has fallen to less than half as he earns Rs 400 in a good week.

“It will drop to Rs 300 or less,” he predicted.

Some weavers have continued with their traditional occupation despite the economic toll it's taken on their livelihoods while others have been forced to take up other work. Several of Rehman's neighbours in the Jaitpura-Chhora colony of Varanasi have abandoned their looms and started driving cycle and auto rickshaws.

HAR Fabrics, in September 2016 employed more than 40 weavers, a number that his withered down to 20-25.

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The loss of work for weavers affects the industry business as a whole. General Secretary of the Banarasi Vastra Udyog Sangh trade association Rajan Behal corroborated, “Business is down to 50% of what it was.”

GST Effect On Traditional Weaving

Saris produced in Varanasi sell for prices ranging from Rs 300 for the cheapest saris made on power-looms with synthetic fibres, to over Rs 2 lakh for silk saris incorporated with silver and gold thread made by handloom weavers over a period of 3-4 days. The overall industry is worth roughly Rs 5,000 crore per annum and provides employment to more than 5 lakh people in Varanasi alone.  

GST has created several hurdles in the production of Banarsi saris. With around 90 percent of the industry employing large numbers of uneducated weavers, understanding the GST implementation itself is difficult.

“Ninety percent of the business is in the unorganised sector employing large numbers of weavers who are uneducated and unable to handle the technicalities of GST,” said Behal of the Banarasi Vastra Udyog Sangh.

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Even educated businessmen are facing difficulty in understanding the complexities of filing GST returns.

HAR Fabrics while being registered for GST since August has not yet filed a single return.

“We could not get the paperwork together,” explained Hasan from HAR Fabrics.

“We cannot figure out when to generate bills, how much GST will be applicable and whom to charge. We waste a lot of time running to banks and have spent entire mornings photocopying papers,” he said.

Another difficulty arising due to GST regulations is the fact that the Banarsi silk industry has traditionally run on a basis of credit. Weavers take credit for cost of raw materials and provide the saris to wholesalers on credit. When the retailers sell the items, they pay the wholesalers, who pay the weavers who then pay those providing the raw materials. All accounts are cleared and payments are made but at later dates. Filing GST returns thrice a month interrupts with the credit system set up by the Banarsi silk industry.

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The retailers, while earlier selling saris without taxing the customers have also been forced to pass on the applicable taxes due to GST filings, resulting in an increase in the price of saris by as much as 20 percent.

Another complication is on the varying GST slabs on different raw materials. For example, cotton and silk are taxed 5 percent, zari and gold thread has 12 percent tax and polyester has 18 percent tax. Due to the different prices of the raw materials, pricing the finished sari becomes more difficult.

When the government decided to levy GST on textiles in June, Varanasi weavers and traders had gone on 8-day strike in protest, and even attempted to meet Prime Minister Narendra Modi who represents the Varanasi constituency in Parliament, but were not able to meet the PM.