The distress of those employed in the diamond industry of Gujarat could perhaps have been anticipated the moment the US began hurtling towards recession last autumn. The state accounts for more than 70 per cent of the worlds processed diamonds,and more than 80 per cent of Indias diamond exports. Till just recently the industry employed more than 8 lakh people. The distress in Surat,the hub of Indias gems and jewellery industry,and elsewhere can be gauged from the fact that more than half the diamonds processed in Gujarat used to be shipped to the US. As reported in this newspaper,the Union labour ministry has estimated that since Diwali employment has halved in Surats large diamond units. In the countless unregistered small units in the city,the gravity of the situation is told anecdotally through the longer Diwali breaks forced upon workers. But the human face of distress is profiled as much by reports of suicides as by this statistic: 1,848 children are reported to have already dropped out of school in Surat,and fresh admissions into schools have halved.
Some of those figures will be accounted for by the fact that a substantial number of workers in Surats gems and jewellery businesses are migrants,and many unemployed are leaving the city. But school dropouts are also a measure of the wider social consequences of economic adversity. They are a reminder of how a slowdown in economic activity can set back the next generation. (The district administration is reported to have advised schools not to insist on tuition fees of children of diamond workers.) The migration begun out of Surat,and the socio-economic fallout as migrants re-enter the workforce in their native places too has implications that need to be urgently addressed.
Yoginder Alagh,who has studied Surats diamond polishing industry,has written in these pages of the immense spontaneity and versatility by which local entrepreneurs grew to become globally dominant. The industry worked on trust,it built upon historical skills and an inherent competitiveness,it organically created linkages between big and small unregistered units. But what grew organically,without institutional direction,must now be protected through responsive social and economic policy.