Rough cut

That would have been inconceivable even six months ago. This was an industry clocking an annual turnover of Rs 15 billion in Gujarat and employing over 8 lakh workers,accounting for 72 per cent of the worlds processed diamonds and some 85 per cent of Indias diamond exports. It logged 13.4 per cent of the countrys forex revenues last year.

Diamonds had also drastically changed much of the Saurashtrian ruralscape and economy,pumping in more money than farming ever did. More than 85 per cent of Gujarats diamond workers belong to the Saurashtrian belt,and Amreli alone accounts for over two-and-a-half lakh workers.

Once diamonds used to rain money,even on a place as small as Amreli. It was a largely unorganised and grey sector where not many Income Tax returns were filed and audits were rare,but the turnover was huge. Thummar says assuming that each of the 60,000 workers within Amreli was making only a modest 0.40 carat of polished diamonds a day from 1 carat of rough stone,60,000 carats of rough stones would produce 24,000 carats of diamonds in Amreli alone. The average price of 60,000 carats of rough stones is about Rs 15 crore,and the average price of 24,000 carats of polished diamonds works out to a daily Rs 24 crore.

Now suddenly,it has all but vanished. And Amreli is reeling and everyone,from farm hands to local shopkeepers to big traders,is taking the hit.

Jobless diamond workers continue to kill themselves in desperation in many Gujarat hubs. Statewide,the diamond suicide toll now stands at 41,all in just the last three months. Eight in Amreli,21 in Surat and the remaining in Bhavnagar,Ahmedabad and Palanpur.

Jobs are disappearing by the thousands,families starve,relationships break. Parents can no longer pay the fees to keep their kids in school. Men who were handling diamonds are turning into petty vehicle thieves,swindlers,bootleggers,even currency counterfeiters. No one sees a long term solution,nobody knows the future, says Thummar.

Hundreds of printed applications for aid to pay for the school fees of children of jobless diamond workers lie bundled in a corner of his office. When the dropout rates of children of diamond workers began spiralling,the Gem and Jewellery Export Promotion Council donated Rs 50 lakh to pay their school fees,a few NGOs chipped in too. But Thummar says the money wont last if more children drop out.

At her old brick and shingles hovel in Vandolia,off Amreli,Dhuli Rathod squats weeping quietly behind her pallu,on the dusty courtyard heavy with the stench of green firewood in the chulah. The face of her dead son,Kishore,looks down from a garlanded photo on the dung-smeared wall.

Men of the village get into diamond work quite early,mostly in their teens. Kishore was one of them. All he had was two-and-a-half bighas of mostly uncultivable,arid land that he shared with his elder brother Manglu,a small home and the family cow. His brother left for Surat to work in a diamond unit and months later,Kishore went to work in a polishing unit in Bahra,on Amrelis fringes.

That was three years ago. The brothers used to send home about Rs 5,000 every month. Then came the meltdown and six months ago,Kishore turned up at his unit one morning only to find it shut,like many others. Soon after,his brother too came back,and the family had no income anymore. For weeks,Kishore wandered listlessly in his village. He finally gave up last month. He consumed a bottle of insecticide in a farm shack near his home. He was barely eighteen.

The sarpanch of Vandolia,Javer Patel,says about one-third of the villages 7,000-strong population has worked in the diamond industry since the late eighties. Many used to be farmers or farm workers and got into diamond polishing when recurring droughts made farming tough. They worked in Amreli,Bhavnagar,Surat and Ahmedabad,and sent home more money than they ever made before. Most have now returned with no income and no hope and now Patel says the crisis has strained relationships in many homes in the village.

It was not always this way. Till the late eighties,Vandolia was just another poor villagethatched kuccha homes and no electricity. Then came the big drought in 1987,and the famine. Farms wilted and died and food disappeared. Hopes died,flies lived on.

In the first wave,hundreds of desperate Vandolia men left the farms and migrated to Surat and other Saurashtrian towns to look for a living. That was also when the diamond processing industry was beginning to come up. The early tiny units,mostly little roadside shacks,needed men who could put in mindless hours hunched over crude polishing machines,turning the small rough stones into easy rupees and dollars.

It changed Vandolia. Small pucca homes now lining the dusty lanes began replacing thatched hovels,electric bulbs eased out kerosene lamps. Patel says 400 bighas of arid farms in the village were made cultivable last year with motor pumpsets and electricity,earned from remittances the diamond workers sent.

But now,as the migrants return to Vandolia and dozens of neighbouring villages,it has led to an uncomfortable situation. When these men had left to work in the diamond industry,labourers from Godhra and Dahod in Gujarat,and from UP and MP,had taken their place in the villages,working on the farms. With the jobless diamond workers now returning,the migrants are now being bundled out of the villages.

Meanwhile,villagers who had got used to working inside the relative cool and comfort of diamond units are finding it hard to adjust to the heat and dust of farms. And most have no other skills to land another job.

This was perhaps what killed 21-year-old Kirit Debasara,the youngest of Manjulabens two sons. The boy abhorred the physical toil his father and elder brother Jignesh did at their tiny family tractor workshop. Five years ago,he dropped out of school and went to Surat to become a diamond polisher,earning enough to send home Rs 4,000 every month. The dream ended five months ago when his factory closed down. Kirit,says his mother,was distraught and did nothing at home for months. On January 13,he shut himself up in his room. The family broke down the door later to find him hanging. We knew he was taking it hard but we never knew it would kill him, weeps Manjulaben.

In these forlorn villages,few have managed to adapt to the slump. One who is trying is Kalubhai Dhanani,who,till four months ago,was manager at one of Amrelis largest diamond units that employed over 2,500 men.

Like most others in his village,Kalubhai had given up farming after a drought in the mid-nineties. Starting out as a polisher,he quickly climbed the rungs to become a manager and spent all his savings building a pucca house. The blow came two months ago when his company threw out most workers,but offered to let him continue at less than one-third of his salary.

I knew there was no future. I needed to quit and begin life once again, says Kalubhai. Farming was no option on his arid land and he had long given up tough,physical work. So,he set up a roadside shack,where he began selling vegetables. Its a far cry from the air-conditioned office he was used to but Kalubhai says it is at least a sitting job and,on lucky days,he earns enough to feed the family.

Most of the unemployed enjoy no state support and have no savings. None of the eight lakh workers are put under labour laws,they remain casual employees all their lives. If they at least had ESI cover,state support would have seen them through for some time, says Sanat Mehta,Gujarats former finance minister.

Its not possible. The workers are paid according to productivity. If we put them under labour laws and pay them by the hours,they will earn a lot less. They wouldnt want that,and they usually keep shifting from one unit to another anyway, counters Chandrakant Sanghavi,who runs one of the states largest diamond processing and exports companies in Surat. There are no trade unions worth mentioning in Gujarats diamond sectorthe only sporadic protests of late,in Ahmedabad a couple of months ago,was put down in no time.

What hit the diamond industry most was the severe downturn in the USmore than half the diamonds processed in Gujarat are shipped to the US,and the rest to Europe and elsewhere. The crunch began when the American market began tottering and the dollar-to-rupee rate kept creeping up. The big diamond players,who have a captive demand back-up and have the cash reserves,may brave the crisis,but the smaller ones,mostly those who do the polishing and basic processing,are folding up by the hundreds.

Stung by the increasing job losses and suicides,the Gujarat government initially responded fast,asked the Centre to act,cut VAT and even ordered the shut units to resume work. It tried to give the sacked workers jobs under the National Rural Employment Guarantee Scheme,but this had a limited impact. You cant expect men who had done no physical toil for many years to abruptly take up work like road digging. Besides,a major chunk of the jobless are in the cities,not villages, says a state official.

Rehabilitation is not easy since a majority of workers have no other skills. Much of the political response in the state has been at best,knee jerk. A senior state BJP MP wrote to the Prime Minister demanding a Rs 50,000-crore bailout package and Chief Minister Narendra Modi asked the public sector Hindustan Diamonds to provide rough stones for processing and buy back polished stones.

At a more practical level,the state Rural Technology Institute is now trying to start short-term re-skilling courses for jobless diamond workers in construction and handicrafts,khadi and village industries.

While desolation hangs heavy over much of Surats diamond sector,huge units like Sanghavis continue working with depleted but still significant high-value export orders. At its massive,high security factory,Sanghavi has whole floors segregated according to the value of the diamonds handled,where trained technologistsnot migrant farm handsuse sophisticated software to cut and process diamonds. But even we cannot hope to go on for long unless there is a good bailout package, Sanghavi says. Thummar,however,says more than the bucking dollar and a collapsed US diamond market,it was the credit crunch that toppled the smaller units faster.

A lot is expected from a Task Force the Reserve Bank deputed this week to look into the diamond crisis and think up urgent banking remedies.

Meanwhile,many jobless workers are turning to crime. The Surat police have booked over a dozen diamond workers for stealing vehicles selling hooch and some even for printing fake currencyall in the last couple of months. For now,the sheen is off.