Demonetisation leaves factory owners with little option than shutting down

Hundreds of businessmen have been left without labourers to work in their factories because of the cash crunch due to demonetisation. The small-scale businessmen and factory owners are the ones who are bearing the brunt.

Traders claimed that they have not been able to pay the daily wage labourers in their factories as the old Rs 500 and Rs 1,000 notes ceased to exist as valid currency notes.

There has been widespread loss of jobs in industries like textile, garments, leather and jewellery. Senior industry executives fear that post demonetisation, an estimated 4 lakh people who are dependent on daily wages have stepped back from their jobs. Of these, many have stopped working owing to lack of payment and production cuts.

Yogender Raj, owner of a raw material manufacturing unit for bakeries in Jangpura said: “Due to a massive fall in the sales, we have stopped recruiting labourers.  We are struggling to pay our staff in cash. They have now started leaving for their native villages. Our businesses are being affected and we cannot do anything. This is the pain we are suffering with.”

Currency ban has almost stopped money circulation in the market. Meanwhile, factory owners are the main sufferers. “After standing in long bank queues for hours and returning without cash has doubled our suffering and we do not have the patience to roam around Delhi in search of ATMs stashed with cash,” said Pankaj Nagpal, owner of factory dealing with machines used for making boxes.

“Workers’ strength in my factory has already reduced and now production process is being affected.  I am thinking of shutting down operation for a few days till the situation becomes normal,” he added.

Saurabh Bansal, a businessman in Model Town said: “Workers are generally not qualified and are unaware of banking processes. We had decided to pay them in cheques but they refused to accept it and went on a strike. Who can understand our pain and whom shall we approach for a solution?”

Meanwhile, the labourers are also facing problems. “I come from a very small village. I have no knowledge of banking. I came in search of work and only believe in cash in-hand salary. I am left unemployed because of no new currency with my boss,” said a worker of a factory.

The bosses have no options but to accept the conditions of their employees or the least they can do is shut their work until money circulation starts in the market. “Many of my employees have left work as the cash crisis prevailed. It is not that I don’t have money but I can only pay through cheques and not in cash. I am left with no other option,” said Arvind Sehgal, the owner of a company dealing with import of food products.