Informal sector in Mumbai is unimpressed

Hoping to get a careful handholding from the government, the informal sector in Mumbai is not very impressed with the Union Budget 2020. Worst hit by the slowdown, the famous leather manufacturers of Dharavi and the potter community of Kumbharwada said that the budget has nothing to help them revive their shrinking businesses.

Dharavi, houses as many as 15,000 small scale informal businesses dealing in pottery, plastic recycling, garment and leather product manufacturing. The leather manufacturers seek a ban on Chinese, the potters of Kumbharwada seek electric furnaces and subsidy on the raw material.

The leather business is one of the biggest contributors to Dharavi slum’s informal economy with an estimated turnover of $300 to $500 million each year. However, the once flourishing trade is now losing its edge due to factors like the influx of cheap Chinese goods and the rising cost of raw materials in recent years.

Manohar Raibage, president of Leather Goods Manufacturing Association said, “The businesses were hit due to demonetisation, and implementation of Goods and Services Tax (GST) added to our misery. Above all this, the influx of cheaper Chinese goods has led to our sales sliding downwards. The original bag that we sell for Rs. 3000, Chinese fake leather products are sold at Rs 500. Customers now prefer buying cheaper options. Businesses are not picking up even during festive seasons, it is getting unsustainable, hundreds have shut shop in the last three years.”

Raibage added, “The margin between raw material that we buy and the final product has shrunk after GST.”

Worst hit by the slowdown, the famous leather manufacturers of Dharavi and the potter community of Kumbharwada said that the budget has nothing to help them revive their shrinking businesses