The success of the GST cannot come at a cultural cost to India. A well-informed tax system must widen the dialogue finance has with handicrafts and hand weaves
On September 15, in a notification about the Central Goods and Services Tax (GST) Act, 2017, the Central Board of Excise and Customs, exempted “casual taxable persons making taxable supplies of handicraft goods” from the requirement to obtain registration under GST. A day earlier, a similar exemption was given to the Integrated Goods and Services Tax, which concerns the inter-State supply of handicraft and handloom goods — a traffic that contributes substantially to the livelihood of many crafts households. There are, however, a few conditions that such notifications employed, like value of sales; the need for crafts people and artisans to obtain a Permanent Account Number and permits called e-way bills.
These corrections made to the GST by the Finance Ministry are the first signals that the entreaties made by the craftspeople and artisans to the Government of India are at last being heeded to. They were made after a representation titled, ‘A plea for reconsidering GST rates for the crafts sector’, was submitted to the Prime Minister’s Office (PMO) in July.
The reason why this representation had been discussed, compiled and delivered, was the ruinous effect on the handicrafts and handloom sector post-GST, which came into force on July 1 under the slogan, “the single biggest tax reform in the history of the nation”. The representation to the PMO pointed out that this single biggest tax reform had been drafted, passed and was being implemented without a single consultation with the craftspeople and artisans.
The representation went on to explain that the GST consultations had not included or even recognised “the widespread existence of crafts people, practices and products based on centuries old histories and skills, which give India a unique place in the world and brings economic benefits to dispersed rural artisans”.
The handicraft and hand weaving sector in India provides employment and livelihood to millions of people, and in terms of numbers, is next only to agriculture (indeed, the two are concomitant, and are based on their nature and application of knowledge). While many crafts and artisanal products are seasonal, estimates are that over 110 lakh persons are engaged in these sectors, with more than 43 lakh in the handloom sector alone.
The GST crisis for handicrafts and hand weaving have shown that this sector is constantly on the defensive. And it can only proceed by getting recognition in the economy. This sector (cultivation and its arts and local manufactures included) does not only produce food but also feed for animals, fuel (both traditional fuels and biofuels), fibres, grasses, woods, minerals and clays, colours for artisanal (and industrial) production. The maintenance of bio-economy — that is the service of balancing our ecological habitats, upon whose gifts we base our lives (a balance brought about by the application of uncountable streams of local knowledge) — is fundamental to the well-being of the country’s people.
“One would assume that natural materials, organic cultivation, reduction of plastics and other synthetic materials, and recycling would figure in the Centre’s approach to policies across the board,” activist and Indian handicrafts curator, Jaya Jaitly observed. As president of the Dastkari Haat Samiti, conceiver of Dilli Haat and initiator of several of India’s most innovative programmes, to return dignity and viability to the craftspeople and artisans, her expectations of policy coherence is well warranted.
Both dignity and viability are important. As long as handicrafts and handweaves were held in high esteem, by the ruling administrations of ancient and medieval, colonial and independent India, both were assured. In the 1951 Census, the first of independent India, among the list of industries and occupations, according to which the working population was described, were herdsmen and shepherds, beekeepers, silkworm rearers, cultivators of lac, charcoal burners, collectors of cow dung, gatherers of seaweeds and water products, gur (jaggery) manufacturers, toddy-drawers, tailors and darners, potters and makers of earthenware, glass bangles and beads, basket makers etc.
liberalisation and ‘market reform’, which swept through the country from the early 1990s, brought with them a view of both macro and local economics that became more distant from ‘arts and local manufactures’. India began to pay more attention to gross domestic product and less to the meanings which handicraft and handweaves represented.
By the middle of the decade of the 2000s, biodiversity, carbon, ecosystem services, and even cultural services had begun to be discussed and considered. Terms and ideas, such as ‘externality’ and ‘social costs’, began to be used to describe the changes to the society and the environment that were under way, visible but was never acknowledged, which weakened and sickened both.
Such discussion rarely recalled quiet efforts that had been made in the same direction only a little earlier, such as in the report of the Steering Committee on Handlooms and Handicrafts for the 12th plan, which observed that “these two sectors constitute the only industry in the country that provide low cost, green livelihood opportunities to millions of families, supplementing incomes in seasons of agrarian distress, checking migration and preserving traditional economic relationships”.
‘Green livelihood’ made a quiet entry into planning vocabulary then. Now, ‘livelihood’ has been replaced with ‘economy’, which is quite a different idea, and the recent loud calls in favour of a ‘green economy’ for India have helped shelter a variety of ungreen enterprises and practices. Perhaps in the notifications of September 14 and 15, we saw the first admission from the Union Government’s financial and planning authorities, that there is no need for a new ‘green economy’ (especially, one based on expensive finance and fickle technologies), when we had one for all the ages that we can enumerate.
The notifications are a worthy start, and this writer wrote to the Finance Ministry that these can and should lead it to consider how incentives and encouragements, in the form of taxation instruments, can do much to renew, revive and strengthen a ‘green economy’ that is the only genuinely grassroots activity India can have.
Some aspects that still require consultation and an extra-financial view are that crafts and weaves are not commodities and should not, therefore, be fitted by force into the Acts’ labyrinthine system of the harmonised system nomenclature codes. The imposition of taxes higher than five per cent on handicrafts and handweaves discourages both sustainable production and consumption (at a time when such practices are gaining international currency). A well-informed system of taxation must include an understanding of the continuum of natural material, habitat, and the knowledge streams that use and transform nature’s materials into craft and fabric.
The writer is a UNESCO Asia expert facilitator on intangible cultural heritage, and adviser, Centre for Environment Education Himalaya