Some Economic Aspects of Diamond Industry in Gujarat

Diamond cutting and polishing industry is the most important industry of Gujarat. It is one of the most labor intensive industries, large numbers of persons are employed in this industry. Thus a study on the economic impact of diamond cutting and polishing industry at Surat will highlight the importance of this industry at Surat. The paper has mainly focus to study the macro level aspects like export earnings, production and employment generation. Moreover, it has study the size of the diamond units in terms of total investment, investment in machine, labor, working capital and capital requirement per unit of employment generation. The study was based mainly on primary data, which collected by using questionnaire and interviews of personnel related to diamond units for micro level data. Other than primary data, Secondary data was collected from various concerned agencies. Simple average and division method are used for the study. The net earnings from exports were reported 19 crore in 1970-71 and 34404 crore in 2004-05. This is huge expansion within 35 years. However, The Government of India has a chance to enhance the share of diamonds exports in total exports by using the surplus capacity of this industry. Therefore government should be concentrate on infrastructure facility and support to this industry on competitive aspects. As the structure of the diamond industry changes however in Gujarat in vulnerable to higher productivity workers in china, supply constraints and a temporary fall in demand as the US recession bites for the stay competitive, the Government of India and Gujarat take further steps to liberalize product and labor markets.