For the over 2 million artisans of the Mirzapur-Bhadohi-Varanasi carpet belt, finance minister Pranab Mukherjee?s announcement of setting up a mega carpet cluster in this belt has brought cheer and the hope of beating the gloom of recession.
With the granting of the mega cluster status, the area is set to have, at last, the infrastructure and other wherewithal required to support a 100% export oriented industry, that contributes almost 80% to the total carpets exports from India. Total carpet export market stands at Rs 3,800 crore, of which this belt accounts for Rs 3,000 crore.
?The scheme is definitely going to help the industry in the long run, as such clusters will give an opportunity to entrepreneurs. What the sector needs are measures such as cash incentives from the government for a year or two till the market shows some signs of recovery. We need this support to meet our competitor China, which is weaning away our business in a big way,? says Ravi Patodia, president of the Bhadohi Carpet Association.
Almost 85% of the region?s total export goes to the US and European markets, which are in the midst of a severe slowdown. Due to this, there is a steep 50% decline in exports, as a result of which almost 50% of the units are not doing any business, forcing almost 10 lakh weavers to sit idle.
?This industry is dying. If we are to survive, we need some immediate interim package which can give us some relief. A mega cluster status, in itself, is of no consequence to us in the present scenario,? says Abdul Hadi, a prominent carpet exporter from the belt. In fact, another demand that is high on the agenda of carpet manufacturers of the area is that the government should waive off the 80 HHC clause of the Income Tax Act.