Economy

Jaipur’s Vendors, Small Businesses Hit Hard After GST Shrinks Diwali Demand

With low sales, labourers in small-scale manufacturing units are facing an employment crisis, while those who have somehow managed to retain their jobs are earning very little.

Jaipur's markets are experiencing low sales just days ahead of Diwali. Credit: Shruti Jain

Jaipur’s markets are experiencing low sales just days ahead of Diwali. Credit: Shruti Jain

Jaipur: Diwali euphoria is clearly missing from the markets this year. During the peak sales time, when the shopkeepers are generally unable to manage the sudden spike in customers even with additional resources, today, even accosting passersby is not pushing up their sales.

Tara Chand, 45, who owns a handicraft shop adjacent to Hawa Mahal, was considered to be more successful than his siblings after he switched to handicrafts, leaving aside their traditional scissors repairing business. Now, with shrinking income, he is forced to rethink his decision of venturing out alone.

“I don’t even need to explain my condition, it’s visible. Three days ahead of Diwali, I’m still waiting for a customer. It’s 2 pm and I haven’t sold anything yet,” he says. “Customers want to spend money only on the essential items. They are not even looking at our shops.”

Tara Chand at his shop at Hawa Mahal road. Credit: Shruti Jain

Tara Chand at his shop at Hawa Mahal road. Credit: Shruti Jain

To make a windfall during the Diwali season, Gopal Krishna Gupta, 46, who owns a garment shop, has now set up a firecracker shop for 15 days in Johari Bazar. With last few days of the festival remaining, Gupta has called two boys from his village expecting an increase in customers.

“It’s absolutely useless to expect from the market this year. Don’t know for how long we’ll have to stay in loss,” he says.

While people are avoiding making any purchases this Diwali, the few who are going to the market are simply not willing to buy any product at the higher prices.

“People haven’t accepted the GST (Good and Services Tax) yet. They want to purchase the products at a rate that is fixed in their minds, the earlier one,” he added.

Gopal Krishna Gupta with customers at his shop in Johari Bazar. Credit: Shruti Jain

Gopal Krishna Gupta with customers at his shop in Johari Bazar. Credit: Shruti Jain

Calling the GST a complex form of ‘CA raj’, the traders feel the entire regime has only benefitted charted accountants.

“Our CA used to charge us Rs 2,000. After GST, his fee has directly increased to Rs 6,000 per month. Under GST, we are required to file 37 returns for which we need to appoint a full-time worker who should have basic computer knowledge and can run after CAs for verifying each return,” said 52-year-old Subhash Chandra, a shopkeeper in Tripolia Bazar.

“Modiji has retired us even before age. The billing that we used to do in our shops will now be replaced by computer and accountants.”

Impact on street vendors

Ram Kishore, 65, has been selling low-cost steel utensils in the alleys of the regular market in Tripolia Bazar for the past 50 years to sustain his small family of a wife and disabled son. Being a part of the GST chain, Kishore pays GST on the purchase of every utensil. However, the customers are not ready to pay more to street vendors like Kishore whose income has fallen significantly.

“Whatever be the status of the market, no one wants to pay us more,” he says. “Normally, I make Rs 300 per day, even more, ahead of Diwali. But this season, I have hardly managed to earn Rs 100; somedays, even nothing.”

Ram Kishore waiting for costumers. Credit: Shruti Jain

Ram Kishore waiting for customers. Credit: Shruti Jain

Shobha (45) and Kaushala (48) from Shastri Nagar basti had pooled in Rs 10,000 to set up a stall in Johari bazar for 15 days. Keeping in mind the market’s performance, they had tactfully chosen to sell only the essential pooja items that the public wouldn’t give a miss. With just days remaining until the end of the season, they have managed to sell items worth only Rs 2,000.

Shobha and Kaushala at their stall in Johari Bazar. Credit: Shruti Jain

Shobha and Kaushala at their stall in Johari Bazar. Credit: Shruti Jain

“This time we don’t think we’ll get even 50% of our input back. Will have to take up other work to compensate the loss now,” Kaushala said.

Employment degeneration

While the Modi government’s ‘Skill India’ mission promises to skill the youth to help them secure a better livelihood, the reverse is happening on the ground. The current skilled labour of India is struggling with the frequent policy amendments of the government.

With low demand, the labourers in the small-scale manufacturing units are facing an employment crisis and those who have somehow managed to retain their jobs are earning very little.

Ghanshyam working at a manufacturing unit. Credit: Shruti Jain

Ghanshyam working at a manufacturing unit. Credit: Shruti Jain

Ghanshyam, 38, who has been working in bag manufacturing for two decades now, cannot think of doing any other work. Until now, he was quite satisfied with the job where his income was directly proportional to the amount of work. But this time, when the units themselves have no work, the workers are not able to earn enough to even pay their conveyance for the factory.

“We get Rs 30 per bag. Each worker normally produces ten-15 bags in a day and earns accordingly but now the whole unit requires only ten-15 bags,” he says. “We are facing the brunt of GST implementation.”

The Jaipur Bag Association has submitted a memorandum to Union finance minister Arun Jaitley requesting lower tax rate on non-luxury items like school bags.

“The small-scale bag manufacturing industries in Jaipur provide employment to lakhs of workers. The GST rate will only throw the poor labourers out of their jobs and make way for the Chinese products,” Suresh Keswani, who is associated with the Jaipur Bag Association, told The Wire.

Being skilled in carpentering and plywood work, Kailash, 57, collectively works for at least three furniture shops in Kishanpole Bazar. Work was never fixed for him but it was sufficient to earn his bread. In recent months, his income has seen a severe drop. However, he is still hoping to get some menial work to earn something.

“Our sales have dropped from Rs 50,000 to Rs 8,000. The impact on the poor labourers is even worse. They don’t have money to even come to the city daily,” said Mayank Agarwal, who owns a furniture shop in Kishanpole Bazar.

Laxmi Narayan painting his own shop in Kishanpole Bazar. Credit: Shruti Jain

Laxmi Narayan painting his own shop in Kishanpole Bazar. Credit: Shruti Jain

This festive season, people have cut their expenses substantially. Considered to be the most favourable time for paint work, the painters in the city are lying idle. However, those associated with the industry don’t blame the GST.

“This is the only season for us to make some money but there is no work. Even those whose houses need paint are excusing it for this year,” said 58-year-old Laxmi Narayan, a painter. “From making Rs 30,000 during Diwali, it has reduced to mere Rs 8,000.”

Tricks of the trade

During the passage of the GST Bill, Prime Minister Narendra Modi said, “The ‘kacha bill’ and ‘pakka bill’ system in our country has helped mobilise black money. GST will help put an end to this.”

However, on the ground, nothing seems to have changed. Traders are still restoring to ‘kacha bill’ to avoid paying income tax on it.

“Kacha bill was always in existence but after GST, the customers are more willing to accept it,” said Kishore Saini, 52, a customer. “Then how is GST supposed to fight against black money?”

In fact, some customers have alleged that traders are selling their old stock at GST rate. “GST is a burden only on the end users, the consumers. The traders will adjust their profits anyway,” Saini added.

Shruti Jain is a freelance journalist.