Surat’s Cloth Traders Divided Between BJP & Cong This LS Election

The diamond city of Surat in Gujarat is in two minds this election season. Although poll surveys indicate that the Bharatiya Janata Party’s momentum is waning in India’s ‘Manchester,’ on the streets it seems the people wish to see the saffron party repeat its term.

During the 2017 Assembly elections, Surtis (citizens of Surat), especially those employed in the textile and diamond industry, openly protested the BJP’s ‘disastrous’ economic policies such as demonetisation and hasty implementation of GST.

But just when political pundits declared an end to BJP’s era in Surat, the party bounced back winning six out of seven Assembly seats in the city. The after-effects of GST can be felt in the wholesale textile markets of Surat even today, as many traders claim that business is down by nearly 40 percent.

The Quint spoke to a group of textile traders in Surat to further understand what the market sentiments are in the backdrop of the all-important general elections.

GST Drags Business Down by 40%

For cloth trader Gaurav Shrimali, GST is the root cause of the downfall of Surat’s textile business. According to him, GST has increased overhead costs significantly, which is hurting small traders.

“Let’s say, if someone has a 10X10 shop, they would sell clothes, pay their bills, dues and income tax. With the implementation of GST, they would need to pay their accountant and CA. In a monthly income of Rs 30,000-40,000, if they must pay their accountants and CA, then it becomes difficult for them to run their households. As a result, their business suffers.”

Gaurav Shrimali, Cloth Trader, Surat

According to cloth trader Ashok Jain, retailers across the country have ceased to buy product in bulk.

“Since GST was implemented, traders are ordering based on requirement. Earlier they would buy 100 sarees, now they buy 30-40 sarees. They place orders based on demand and what’s not sold is returned to us. Goods Returned (GR) has spiked since GST came into effect,” Jain said.

The reason for the spike in GR is attributed to slow sales at retail shops, which is affecting payments and circulation of money in the market.

“Circulation of money is not the same as it was earlier as payments are not coming through. Even the labourers’ income has stagnated; the increments they earned each year has now stopped. Right now the market is 40 percent down and cold. Surat is no longer the textile hub it used to be.”

Kirti Shrimali, Cloth Trader, Surat

Traders in Support of BJP Claim Market is on the Rise

However, some traders affiliated with the BJP claimed that business has seen positive impact thanks to the implementation of GST. According to yarn trader Pradeep Parikh, who is a member of the local BJP in Surat, GST has ensured full payment on bills generated.

“With the implementation of GST, things are looking good, particularly in my yarn business. Before GST we used to face many issues. On every bill we lost Rs 25-Rs 50, not to forget delayed payments. Earlier when we made a bill on XYZ payment would come to us under a different name. But now you draw a bill on X you get payment from X, if you bill someone Rs100 you get Rs 100.”

Pradeep Parikh, Yarn Trader, Member of BJP

For some the scale of the textile market in Surat was enough to declare that the markets are on the rise.

“The traders say textile business is going down. But Surat’s wholesale market is growing gradually. Earlier the market was confined in a 1.5 km stretch now its spread over 10-15 km. So, the business is improving and there can be losses at times but it’s definitely not because of GST. In fact, GST has benefited us,” said yarn trader Deepak Jhawar

While others like cloth trader and property consultant Jay Sharma said that the Congress is more interested in protesting good economic policies.

“Congress will protest as they are in the Opposition, that’s their habit. Good and bad work happens all the time. The Congress does no work, whereas the BJP works and some of it will be right and wrong. The Congress did nothing besides ruling for 70 years and scamming.”

Jay Sharma, cloth trader and property consultant 

There is a clear rift in opinions amongst the textile traders of Surat. While some are upset over business loss and poor turnover others remain optimistic of BJP rule and are self-assured that their businesses will soar albeit being down now.