The diamond industry needs consolidation, feels the premier institute.
At a time when the entire diamond industry is reeling under crisis, country's premier management institute-Indian Institute of Management, Ahmedabad (IIM-A)-has come up with a suggestion that diamond polishing units should form a co-operative and sell the polished diamond as a whole to avoid price war among them.
Recent studies, jointly undertaken by around 40 IIM-A students, states that currently all the polishing units are centered and everyone is competing among themselves to sell their diamonds to traders, thereby resulting in a price war. "The polishing units should form a co-operative and sell the polished diamonds as a whole so that there is no price war", recommends the study titled "Diamond Polishers' Suicides".
Series of suicides committed by many diamond workers prompted the students to take up the study. The findings of the study are based on the interactions with all the stakeholders of the industry i.e. diamond workers, merchants and traders as well as field visits.
Things turned worse for the industry in November 2008. From about 1.5 lakh full-time polishers in 1996, employment has come down to only about 20,000 at present.
Around 770 polishers have committed suicides till date since 1996. As many as 74 ex-diamond polishers have committed suicides in last two months, while unofficial sources put the figure at more than 200, the study says.
The study emphasizes that the diamond industry should move forward to polis model (an alternative model for society where people work as a group and not individually).
The polishing industry is largely a small scale industry, where the labour force is still no organised. The labour force is hired on job-work basis and as the number of labourers per unit is often less, many labour laws of the company act don’t apply and hence these polishers are not eligible for any social security.
"The only solution to this would be consolidation of the industry so that larger players emerge. Such large players would then have more organised and permanent work force and hence lesser polishers would be subject to the kind of problems that they are facing at present", the study suggests.
"There is considerable amount of distress and lack of social protection for people who work in industries that are not registered and not properly covered by labour laws. The sheer desperation that causes people to commit suicide should really be looked into. Its not just loss of livelihood but loss of life itself," said Navdeep Mathur, Instructor, PGP Course, IIM-A.
The plight of the polishers is a classic case of the failure of the state. "The government and the industry could work together in addressing the plight of the diamond workers. We felt that the government could set up institutions that would provide loans to theworkers to help them generate self employment", the study suggests.
