Gurgaon industry gasping for breath as cash crunch hits all sides
There is little cash either to pay workers or buy raw material in this hub of automobile productiongurgaon Updated: Dec 09, 2016 01:46 IST
A month after the demonetisation move, industry in Gurgoan is gasping for breath as there is little cash either to pay workers or buy raw material, which has the potential to bring the local economy to a standstill.
The city being a hub of motorcycle and car production has been particularly hit as the demand for automobiles has fallen sharply. Trade union sources said production has been limited in large automobile companies and many are now observing a three-day week. However, this could not be officially confirmed.
“Not only large companies, but even their vendors have been hit hard as there are no buyers for motorcycles across the country. With no money in hand, who is going to buy bikes and cars?” said Anil Kumar, general secretary, All Indian Trade Union Congress, Gurgaon. Kumar said major automobile companies have decided to have shorter work weeks to reduce production, which has also hit vendors badly.
In Manesar, a large number of vendors are unable to buy raw material, which has to be bought in cash. “The demand has suddenly gone down, orders are less and we don’t have money to pay the workers,” said Manoj Tyagi, general secretary, IMT Manesar Industrial Association.
To offset the problem of paying salaries in cash, the industry is trying to work with banks to open accounts for their workers, in Manesar and Gurgaon. However, industry insiders admit opening bank accounts for the almost two lakh workers in the Gurgaon-Manesar industrial area is in itself a major task.
“The situation for the industry is quite complex. One the one hand, lack of cash has made it difficult to buy raw materials and pay workers. On the other, the demand has also drastically reduced, which is a major problem,” said PK Jain, founder-president, Gurgaon Chamber of Commerce and Industry (GCCI).
While the industry in the city is trying to cope with the situation, top Gurgaon businessmen said if the situation doesn’t improve within the next month, the local economy would be badly hit.