Why is GST levied only on Indian handloom weavers, not farmers?

ANI | Updated: Nov 10, 2017 13:11 IST

Hyderabad (Telangana) [India], Nov 10 (ANI-BusinessWire India): In India, both the handloom weaver and the farmer come from the same background, both have many parallels or identical conditions that they face for their livelihood. The farmer gets empathy and benefits; the handloom weaver gets only sympathy with hardly anything to encourage his existence.

Unnati Silks, working extensively since 1980 in the field of Handloom and Handcrafted Textiles at the grass root level, is trying to draw attention of this Country towards the fact that when both farmers and weavers are from the same walk of life, then why burden just the weavers with the Goods and Services Tax (GST).

Agriculture and allied sectors like forestry and fisheries accounted for 13.7 percent of the GDP (gross domestic product) in 2013, about 50percent of the workforce. Very laudable and acknowledged since long as the prime contributor in a nation that traditionally for centuries has had agriculture as its main source of livelihood for the 85percent population residing in its villages.

The economic contribution of agriculture to India's GDP is however steadily declining with the country's broad-based economic growth, but still remains significant to India's socio-economic order.

Textile plays a major role in the Indian economy, as it contributes 14 percent to industrial production and 4 percent to GDP. There are about 45 million people plus engaged in this industry in some activity or the other, making it one of the largest sources of employment generation in the country, second only to the agriculture industry.

Having a tremendous potential for employment, Handloom contributes to one-fourth of the total textile production and quite significantly to the country's export earnings. But it is this sector of textiles that has always been talked about but nothing much has been done for it that could be considered as substantial or even satisfying.

Handlooms have always been acknowledged in India and universally as having extraordinary potential to fuel a continuous stream of new and interesting fare, year after year. Rich in possibilities from permutations and combinations applied to a whole host of factors like design, color, pattern, manner of incorporating, adornments and so many others, it unfailingly sustains the needed variety and diversity that answer's the expectant market's constant need for change and creativity.

Read this note on handlooms. This is the opening paragraph, in the official note on the Handloom sector, where the Office of the Development Commissioner (Handlooms), mentions:

The Handloom Sector is one of the largest unorganized economic activities after agriculture and constitutes an integral part of the rural and semi-rural livelihood. Handloom weaving constitutes one of the richest and most vibrant aspects of the Indian cultural heritage.

The sector has an advantage of being less capital intensive, minimal use of power, eco-friendly, flexibility of small production, openness to innovations and adaptability to market requirements. It is a natural productive asset and tradition at cottage level, which has sustained and grown by transfer of skill from one generation to other.

Handloom weaving is largely decentralized and the weavers are mainly from the vulnerable and weaker sections of the society, who weave for their household needs and also contribute to the production in the textile sector. The weavers of this industry are keeping alive the traditional craft of different States.

The level of artistry and intricacy achieved in the handloom fabrics is unparalleled and certain weaves/designs are still beyond the scope of modern machines. Handloom sector can meet every need ranging from the exquisite fabrics, which takes months to weave, to popular items of mass production for daily use'.

Both hit the nail on the head. Handloom is indeed a heritage art, a practiced craft that not only provides for the basic need for clothing but in addition makes it durable and interesting, besides making room for a whole lot of other included advantages. It is also one sector that has never received its due.

The farmer and the handloom weaver are majorly from rural backgrounds. One tills the soil, plants his seeds, irrigates when needed, harvests and sells his produce. The latter procures his raw materials, arranges his loom, weaves, adorns the fabric, completes his work and sells his products. Both have to toil, both have vagaries involved that disturb their lives and means of livelihood

Understanding the Eco System of Indian Farmers and Indian Weavers:

-Raw materials aren't cheap to the weaver

Anything that has to grow in soil needs water. The farmer gets his water needs fulfilled by the benevolence of the rain gods or irrigation done through artificially created channels built by the government. What he has to plant, additives, and so on that go in as inputs are subsidised or available at reasonable prices to aid him in his task.

The handloom weaver does not have the luxury of such heavy subsidies for his raw materials. He also does not have the kindly eye of the govt. or any agency to make things easy for him.

-MSP - Minimum Support Price only for the Farmers

The farmer has a certain minimum price to bank upon which have been set up for him since ages by government depts. or agencies.

The handloom weaver enjoys no such privilege, has to bank upon the goodwill of the trader to whom he sells his product or gives to get it sold and be satisfied with what he gets, which many a time is a pittance for his effort. There are times when the weaver has no customer and he is loaded with dead stock which fetches him next to nothing.

-Waiver of loans only for farmers

When things go bad for the farmer, there is always some agitation or govt. intervention to tackle his problem of loan repayment. This could lead to easy or relaxed terms, extension of time, and further waiver or write off as bad debt, if there is political climate and govt. approval.

The poor weaver never comes out of his misery simply because he has no godfather to work out any feasible solution for him nor intervene on his behalf to mitigate the conditions. The worth of his craft is acknowledged by one and all, his problems are his alone.

-It is tax-free for the farmer

The greatest advantage to the farmer is the 0percent tax levied on anything that is even remotely linked to agriculture. So he is able to command a price if it is good, at a lower price during slack seasons, and even helped out when there are natural calamities or crop damage due to any reason. But he is at least assured of some returns. With no levy of tax on the produce, you have very rich farmers too who have been able to amass wealth on this account.

Not so the handloom weaver who is taxed like any other. Since long the weaver has had to buy everything that goes into the fabric at a price. The input costs being high the finished product commands a selling price that he has to put up that ultimately may not fetch him even the basic price for his fabric.

-Electricity rates - nil to negligible for the farmer

The farming sector has for long been enjoying the advantage of free electricity or in some cases very low rates for the electric power supplied. This has led to misuse and theft of various kinds that have ultimately been compensated for by subsidies from the govt. or taxing other consumers of power supply higher, in the state. The electricity for them has never been grudged for irrigation purposes, but the misuse appalls even the most liberal in views.

Compare that to the case of the handloom weaver, who is also mostly rural-based finds his time of work restricted to the daylight hours because of electricity, has no free electricity, subsidy or any other 'perks' enjoyed by the farmer.

-Policies exist - lack of implementation for the weaver

The agricultural sector enjoys the benefit of all that has been instituted in its favour, by national sentiment, political will or govt. empathy. Policies, schemes, plans, benefits or any other items that favour the farming class get implemented without question.

The handloom sector, has long suffered on account of well-thought-out plans and policies, that could benefit the handloom weaver, that do not get implemented and remain merely as agenda on paper. The apathy of the govt., the lack of political support, the missing public fervour in its cause, all work against the handloom weaver and his like, making them pawns in the hands of destiny.

The farming sector was paying 0 percent tax and the recently introduced GST does not apply to their produce even today. Naturally, life for them continues as usual.

"For a sector that has a major chunk of its workforce as women, who are also not very literate, and till now which was exempted from tax is now subjected to 5percent GST on its raw materials. Already in the throes of a vice-like grip of conditions not allowing them to breathe properly, this latest loading of GST on the handloom sector threatens to snuff the life out of the humble weaver," said Devender Ladha, owner, founder and current CEO of Unnati Silks.

GST compliance is an additional burden, to a community that lacks the basic knowledge of procedures, because of the low literacy level and the traditional custom of simple sell and receive that would now, in addition, involve experts in urban areas to comply at regular intervals at a price, increasing their misery.

The number of handloom weavers is declining sharply because of the remuneration or returns not being commensurate to the effort but far lower.

The power loom and mill sector are more paying in terms of returns currently and therefore given more favours and relaxations compared to the handloom sector by the govt.

The younger generation finds it hard to adapt to the traditional skills passed down through generations and prefer shifting to other industries whose skills are easier & more paying.

Technical up gradation of handlooms has been slow and hence meeting the market demand through traditional practices seems unrealistic in the current scenario.

Increased constraints of credit availability have contributed largely to the dis-illusionment.

The bottom line of today's situation that shows different lines of treatment to two sons of the soil, the farmer and the handloom weaver, favouring the one and merely applauding the other, shows a pitiful state of affairs that would have shocked Gandhiji, the Father of the Nation, who in 1919 had put the agricultural farmer and the handloom weaver on the same footing.

He saw it as the former taking care of the food requirements, the latter the clothing needs. The handloom industry suffered on account of the ruling British not allowing the industry to come up because their own selfish ends would not have been met.

Weavers are in equally pitiable condition as farmers of this country. And both desperately require support of the government and the entire country now, more so than ever before.

"If only the handloom weaver got his due with some of the promises in policies met, and market encouragement and govt. empathy re-inforced with their support, Indian handloom - the heritage of a nation, the Pride of India, would see a far different story and redeem the country's glory in fashion to new heights," added Ladha. (ANI-BusinessWire India)

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