Demonetisation Effect On Unorganised Industry Hubs!

While the organised players are largely unaffected, unorganised industry hubs are facing a massive disruption in business due to demonetisation.

- P.B.Jayakumar

Manish Paniwal , a 32-year-old unskilled worker employed in a ship-breaking yard at Alang in Gujarat for the past four months, is completely at sea. In the first two months of arriving from Kharagpur, he managed to earn a decent sum of ₹25,000, of which he sent ₹22,000 to his family through friends who were going home for Diwali. However, after demonetisation, things changed dramatically. For November, he was paid ₹12,500 in old notes, of which he sent ₹10,000 home. Till January 12, when we met him, he had not got his salary for December. He has no money. All the people from his village working in Alang have returned home. His employer is ready to help him open a salary account but his only identity proof – the voter Id card — has been damaged by rats in his shanty in Sosiya village. He is surviving on food bought on credit from the local provision store; the debt is now over ₹1,200. “I don’t know what will happen if he stops giving me things on credit. I have become a beggar,” he says.

More than two months after the Central government withdrew ₹500 and ₹1,000 currency notes to control the generation of black money, disrupting economic activity across sectors, things are yet to return to normal for lakhs of people working in big industrial clusters in places as far apart as Firozabad in Uttar Pradesh and big industrial towns in Maharashtra and South Gujarat. The reason: their employers, especially those that operate in unorganised and cash-dependent sectors such as textiles, retail, diamond processing and ship recycling, are finding it difficult to cope with the shortage of cash. Only organised industry hubs for chemicals, pharmaceutical and engineering, such as Ankleswar, Vapi, Boisar and Valsad, are relatively unaffected.