Dip in sales causes 2 lakh layoffs in diamond industry

The once dazzling diamond industry can barely hide the gloom that the global meltdown has brought to the city of Surat...

Smita Aggarwal & Madhusudan Sahoonew Delhi/mumbai | Published: February 7, 2009 12:20 am

The once dazzling diamond industry can barely hide the gloom that the global meltdown has brought to the city of Surat,Gujarat,where around two lakh workers have lost their jobs. The only relief for them — their children will not be thrown out of public or private schools on grounds of non-payment of fees.

According to latest information available with the labour and employment ministry,there are about 2,500-3,000 diamond units located in Surat. These employ around 3.5 lakh to 4 lakh workers. Quoting a note prepared by the government on labour situation in diamond industry in Surat: “…it is estimated that about two lakh diamond workers have lost their jobs due to present situation in diamond industry”.

The number of retrenched workers is likely to get worse. Surat Diamond Association president CP Vanani said,“In the next 3-4 months,the diamond cutting and polishing industry in India,mostly in Surat,may see more than 80 per cent job cuts as the country’s leading diamond majors find no buyers due to poor demand growth on exports.” Sales were down by over 30 per cent in the US,the largest diamond jewellery market,in the last two months.

In a survey conducted by the labour commissioner and the Directorate of Industrial Safety and Health in January this year,it was found that only 1,238 units of the total 1,770 surveyed were functioning. These 1,238 units employ 1.24 lakh workers. The diamond industry had earlier assured that units will resume functioning from January 1,2009.

A government official,commenting on the lack of social security for laid-off workers,said that diamond associations have traditionally prided themselves in being able to provide for their workers. Now,even they have shown helplessness. However,the Surat Diamond Association has earmarked Rs 50 lakh towards the workers’ children’s education. It will be contributing Rs 1,200 towards fees for six months per child.

However,the industry has now turned to the government for additional relief. Gem and Jewellery Export Promotion Council chairman Vasant Mehta said,“We are planning to meet RBI and finance ministry officials this month. We need some package to bail them (workers) out. We had already met Montek Singh Ahluwalia and we were assured a possible financial measure by next week.”

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