The micro, small and medium (MSME) sector is worried over the central government’s proposal to make it mandatory to pay salaries of factory workers through cheques or direct bank transfer.
Union labour minister Bandaru Dattatreya on Sunday said the Centre would soon amend the Payment of Wages Act to facilitate the move. The proposal comes a month after announcement of demonetisation, which, experts say, pushing the country’s cash-based economy towards cashless mode.
Industry experts, however, say many workers avoid going to bank and casual workers (daily wagers) expect to get paid by cash on a daily basis. “The move is impractical, especially for the unorganised sector,” Pithampur industry association president Gautam Kothari told HT.
“While industrialists are encouraging their employees to open bank accounts, many workers are illiterate and so avoid going to bank. Moreover, casual workers, who work under sub-contractor, get paid daily and even if contractors are paid by cheque he will find it very difficult to distribute the amount,” Kothari said.
Deepak Ratnani, who has a PVC pipe manufacturing unit in Sanwer Road industrial area, said they would have to spend many days training workers on how to carry out banking transactions.
“Even then, there is no guarantee that workers will accept payment by cheque. They are used to getting paid weekly by cash and immediately settle their kirana store and other debts once they get paid.”
Association of Industry, Madhya Pradesh, secretary Yogesh Mehta said: “We are all for transparency but the problem will be in making payment to daily wagers.
“Most of them don’t have accounts and even if new accounts are opened, they will be reluctant to accept cheques or any other electronic transfer method. Then, they will also ask for some time off to visit banks to withdraw the amount. It will take them a long time to become comfortable with using debit cards and initially they will be also vulnerable to frauds.”