What is the issue?
GST along with earlier government polices has profound and unbearable impact on the handloom.
How government policies had crushed the interest of artisans?
- Right after independence, there was no protection for the handloom sector in an India industrialising itself in the manner of the West.
- Handloom was glorified in every government policy and report on the textile sector, any concession towards it remained only on paper.
- In 1985 there was a promulgation of the New Textile Policy, the policy emphasised productivity in sharp contrast to employment.
- Specific needs of the handloom sector were ignored, existing restrictions on mills and power looms were removed.
- The measures in this policy supposedly intended to protect handlooms worked to the advantage of the illegal proliferation of power looms.
- The Handlooms (Reservation of Articles for Production) Act of 1985 reserved 22 varieties of cloth products exclusively for weaving on handlooms.
- But due to lobbying in 1996, the number of articles reserved for weaving on handlooms was reduced to 11.
- The export-oriented textile policy promulgated in the year 2000 liberalised controls and regulations while paying less attention to the handloom sector.
- In 2012, the government attempted to change the definition of a handloom itself to enable the power loom industry to poach on the benefits intended for the handloom weaver.
What are the issues with GST on handmade goods?
- Handmade products are now being taxed for the first time since independence, and the inputs cost more.
- The cost of raw materials sold by large retailers has gone up due to GST, indirectly hiking the price of the handmade goods.
- GST is being levied on handmade goods marketed by rural cooperatives.
- By this individual artisans who come together as a co-operative to better organise themselves as sellers, would subject to tax.
- Government has exempted those manufacturing handmade products with a turnover of less than 2 million from GST.
- Such a taxation system discriminates against rural cooperatives marketing these products and eventually burdens the artisan.
What are the impacts of government’s moves?
- The phenomenal growth of power looms fully supported by the government edged the handloom sector out.
- Handloom weavers are unable to compete with power loom workers churning out cheap imitations of handloom products.
- Handmade goods have become even more expensive and the struggling industries have been severely impacted.
- The government had only provided marginal support for handloom weavers by way of a few protectionist measures.
- The imposition of GST on handmade goods is bound to have a severe impact on the livelihood and survival of rural artisans.
- GST as also weakened the bargaining power of the handmade sector.
Source: Business Standard
