Beedi industry reels under demonetisation, GST impact

Demonetisation and Goods and Services Tax have created “havoc” in the beedi industry. The industry, which is already facing serious crisis, has witnessed loss of jobs that has badly affected thousands of beedi workers.

“Beedi workers have work for hardly two days a week. Post-demonetisation, no work was created and small traders were hit as money transactions were affected. GST added to the prevailing crisis. Jobs have come down very seriously,” said A.K. Padmanabhan, all-India vice-president of CITU.

The workers continue to demand rollback of 28% GST which has also impacted welfare measures meant for them. “The Finance Ministry has said that all additional cess will be subsumed in the tax. The cess goes to form the welfare fund for workers. There are special dispensaries for workers and scholarships too. Now, these measures are in danger,” he observed.

For instance, the scheme to grant scholarships had been changed and made available online. “Rules are being changed in such a way that the scholarships can be delayed or postponed. If the welfare cess does not continue, it is the responsibility of the government to ensure that workers’ benefits are not affected,” he noted.

“The problems of workers are related to the policies of the government. A special legislation — Beedi and Cigar Workers Act — was enacted in 1966 after a long struggle. Unfortunately, there are more violations of the law than implementation,” Mr. Padmanabhan said. One of the biggest problems facing the workers is the paradigm shift in how the industry worked. “From employer-employee relationship, it has moved to contract/agent system. The factory system has been abolished,” he added. The federation is demanding minimum wages for beedi workers at ₹350 for 1,000 beedis and increase in wages when prices go up. The federation has started a signature campaign among beedi workers. Once done, they will start the struggle for their demands.