Diamond Workers' Plight

Speaking at the Vibrant Gujarat Global Investors’ Summit in 2003, chief minister Narendra Modi pointed to what in his view was an important factor contributing to his state being the “natural destination for wealth creation”, its “reasonable and peaceful labour culture”. Labour activists do not consider “peacefulness” to be a sign that all is well with Gujarat’s workers, especially in the unorganised sector. It is true though that the state has hardly witnessed any major labour-related protests for many years. The ongoing agitation by the diamond polishing workers of Ahmedabad, Rajkot, Bhavnagar and Amreli (one worker was shot dead and another injured seriously by a private guard when the protests turned violent in Bhavnagar) is thus being seen as a sudden occurrence.

Workers of Gujarat’s diamond polishing industry have been campaigning since 2000 against stagnant wage levels (and, in many cases, wage cuts) due to the downturn in the global diamond business. The Rs 50,000 crore industry in the state accounts for 80 per cent of the diamonds processed in the country (and 72 per cent of the world’s processed diamonds) and employs nearly eight lakh workers. The last five years have however seen rapid changes and the diamond workers of Gujarat are bearing the brunt of these developments. First, the slowdown in the American economy has adversely affected the demand for diamonds. Second, the rise in prices of raw diamonds and allied materials has increased costs. Third, there are fears that China may chip away India’s advantage as not only diamond processors from Israel and Belgium but some from India too are setting up shop there. Fourth, there have been demands by the diamond producing countries of Africa that cutting and polishing units be set up there, this being the condition for permitting mining or imposing lower duties. Fifth, the Indian diamond processing industry has been spreading to Kerala, Tamil Nadu, Rajasthan and Goa. Not only have these factors led to a slashing of nearly 30 per cent of t he workforce in t he state, t hey have also kept t he wage rates stagnant. Polishers are on an average paid between Rs 30 and 45 per diamond, according to its quality and size, but find that rising inflation is diminishing the purchasing power of their money wages. Since these jobs are based on paper-less contracts, the workers receive no other benefits or perks.