Cash crunch: In Ludhiana, factory workers’ payday means little or nothing | punjab | Hindustan Times
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Cash crunch: In Ludhiana, factory workers’ payday means little or nothing

black money crackdown Updated: Dec 07, 2016 21:05 IST
Sumeer Singh
cash crunch

People outside a bank in Ludhiana on Wednesday. (Jagtinder Singh Grewal/HT)

Shyamu, 34, a worker at a hosiery firm in Ludhiana, has been stalling his travel plans to his native place in Gonda, Uttar Pradesh, for almost 20 days now. His mother, who is sick, is waiting for him there. Everything hinged on December 7, payday. But his boss offered him demonetised banknotes of Rs 500 and 1,000, citing a currency crunch. Shyamu refused to take the salary, for now.

He is one of the 12 lakh workers in the industrial town affected by the demonetisation move that took out about 85% of the currency in circulation, and the resultant cash crunch due to shortage of new notes. As most of banks and ATMs remain out of cash, many traders are banking on agents who have come up overnight and are taking a 10-15% cut to exchange old notes with valid ones. Or, in some factories, the owners have partly paid the workers. Very few have given cheques as either the workers lack bank accounts or the owners do not want the transactions tracked.

Only big players such as Hero Group and Trident textiles, where the entire workforce has bank accounts, have paid by cheques or e-transfer.

“Around 80% of all industry is in the unorganised sector. And 80% of the workers do not have bank accounts,” said Badish Jindal, vice-chairman of the National Productivity Council, “In some cases, workers who are refusing to accept the old notes or cheques are being laid off.”

Workers here usually come from villages of UP, Bihar and Himachal Pradesh, and such migrants are 8 lakh of the 12 lakh workers here. Around 4 lakh work in the hosiery industry, while more than 2 lakh in the cycle industry. Other sectors include machine tools, sewing machines and auto parts.

Suresh Arora, owner of Arora Fabrics in Sundarnagar locality, said, “I could not pay salary to more than 80% of my workers as I could withdraw only Rs 50,000 from my current account. If somebody chooses to leave, he or she can. Around 60% of my workers have already left for their native places in Bihar and Uttar Pradesh.”

Harmohinder Pahwa, director of Nova Cycles, said they could pay only 15% of the 550 workers. “We have given cheques to workers who have bank accounts. Since we do not have cash, we will be paying the rest in installments in the coming days.”

Meanwhile, Arun Kumar, 42, who works in a hosiery firm for the last 24 years, and his family are relying on potatoes alone for meals. He was given the salary in old notes that he refused to accept. He last withdrew Rs 2,000 from his account on November 17.