The Confederation of All India Traders (CAIT) said yesterday that businesses across India have taken a 40 per cent hit since the implementation of the goods and services tax. The festival of Dhanteras today has failed to cause an uptick in sales in Mumbai and Delhi.
Leather traders in Dharavi, India's biggest slum that's a manufacturing hub for textiles and leather goods, say that the GST has doubled taxes on finished leather goods, from 12.5 per cent to 28 per cent. Prices have been pushed up as a consequence, and the lack of orders on Diwali has caused lay-offs. (Watch)
"We can keep labourers for a few days, but if there are no orders how can we keep them on payrolls?" said Abul lais Sheikh, a Dharavi-based manufacturer of leather accessories.
Textile sales have also taken a hit.
"Since last year we have seen a dip of 50 per cent," said Babbu Khan, a textile wholeseller. It's Dhanteras but can you see anyone buying anything?"
Even Delhi's Sadar Bazar failed to draw the crowds it usually does at this time of the year. The roads lay empty for most of the morning, and traders complained that the crowds that did come out in the evening did not spend much.
"It is so quiet, it doesn't feel like Diwali has come," said Ramneesh Garg, whose home appliance store is usually bustling with activity in the festive season. "Even till 4pm I haven't made my first sale."
Dev Raj Baweja, the general secretary of the Delhi chapter of CAIT, said that traders in Sadar Bazar have seen a 50 per cent dip in business, as the note ban last year and the GST this year has impacted the purchasing power of shoppers.
"The situation we're seeing on Dhanteras, we have never seen in all the years I have done this," said Mr Baweja. "Looking at this situation today has caused a lot of fear and worry in my mind about the future, if we'll be able to survive."
Though metal is traditionally bought on Dhanteras, gold traders also complained of sales taking a 30 to 40 per cent hit compared to last year, as shoppers only made small purchases for the sake of tradition.
"I usually don't have time to have lunch on this day, and today I'm calling out to customers asking them to take a look," said a gold trader in Sadar Bazar.
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