Economic Slowdown: UP Tourism & Handicrafts Industries in Deep Crisis, Workers Sent Home

The acute crisis in India’s automobile sector has already hit the headlines with reports of widespread job losses and sales plummeting to 20-year lows. Now, the textile mills, shoe and leather industry in Uttar Pradesh sending its labourers on leave show how the economic crisis facing the country has hit these sectors.

Many factories have been closed in Varanasi, while workers in Uttarakhand and Noida have been asked to go home. The handicrafts and shoe business in Agra which is part of the tourism sector are also facing the worst crisis in recent times. The situation is similar in Meerut, Kanpur and Lucknow.

HANDICRAFTS AND TOURISM INDUSTRY face Wrath of economic slowdown

There are five major sectors in Agra - tourism, footwear, handicrafts, silver and retail. In the past three years, not a single new unit has been registered and the situation looks worrisome. According to report published in the Hindi daily Hindustan, the bookings of five star hotels in Agra have declined by 35% and budget hotels have declined by 50%. More than a thousand people have been forced to sit at home due to loss in tourism business in Agra itself.

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Speaking with NewsClick, Agra Tourism Welfare Chamber (ATWC) President Prahalad Agrawal said, “Night stay at Agra has come down due to the slowdown. Earlier, tourists used to come to see Taj Mahal and stay here in hotels at night but nowadays they return on the same day. Booking of three to five star hotels have declined by 30 to 35% and budget hotels have declined by 45 to 50%.”

He added, “According to the latest data complied by the Agra tourism chamber, the number of visitors dipping include foreign tourists, while there is a sharp drop in domestic tourists as well. For the people of Agra is tourism industry is a lifeline but due to the slowdown, it seems that joblessness will increase more here. The shoe industry is already in slumber."

Agra's handicraft industry, especially marble handicrafts, which is the backbone of the city’s economy is also facing a crisis. This industry, too, comes under the Agra Tourism Welfare Chamber. "According to government data, the industry has registered a decline of 40%. Before demonetisation, around 70,000 handicrafts workers were employed or doing their ancestral business but as of now only 25,000 are left. The reason behind the falling number of workers is the 12 % Goods and Services Tax (GST) . Earlier, there was a 0% slab. Ever since the handicrafts industry has been imposed with the 12% slab, workers are leaving their centuries-old business. Even foreign tourists are not buying handicraft stuffs because of the 12% tax," Agarwal added.

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The ATWC has demanded reduction of the tax from 12% to 5 %, or 0 %, saying that if continued in this way, the handicrafts industry will lose its charm and this heritage will be finished.

Similar Situation in Leather and Weaving Industry

The leather industry in Kanpur and weaving industry in Varanasi has also lost its old glory for which it used to be known worldwide. With the economy facing arguably the biggest recession in in recent history, thousands of workers who came from Bihar, Jharkhand and West Bengal have lost their jobs.

Commenting on the leather industry crisis, Naiyar Jamal, former general secretary of Kanpur Tanneries Association told NewsClick, "Leather industry is already in deep crisis because of government’s policy. The credibility of our industry has been damaged as we could not deliver goods on time as all tanneries were shut by the Adityanath government ahead of the Kumbh Mela in Prayagraj. Since then, we are not getting loans from bank neither credit from the market. As a result, workers who came from other states for livelihood are leaving this industry. Over a hundred tanneries have opened out of four hundred in the past month but customer are not buying products. They are taking hardly five items out of ten and it's all because of the slowdown. Around 90% of the workers have left for their home."

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He added, "Prime Minister Narendra Modi has been urging businesses across the world to invest in India but unfortunately the government is genuinely not bothered about those industries which exist in the country since long."

Similarly, the once bustling weaving and handloom industry in Varanasi and Azamgarh’s Mubarakpur, which used to provide employment for thousands of people, is on its last legs due to the multi-pronged challenges and lack of government support.

Ashok, a businessman of silk sarees in Varanasi, told NewsClick, "In the weaving and silk industry, hundreds of workers from Bihar and West Bengal have left for their homes as we do not have enough production. The condition of businessmen is becoming worst day by day. Several workers from neighbouring Azamgarh, Mubarakpur, Mau and Ghosi are leaving for Gulf counties as this business is dying a slow death.”