Two months on, industries face shortage of demand and workers
Two months after the demonetisation decision, industrial unit owners, traders and workers still face a cash crunch. In addition, the Noida Entrepreneurs Association (NEA) estimates that demand for products of around 7,000 small manufacturing units in Noida has fallen by 40% due to limited cash use by consumers.Updated: Jan 07, 2017 23:02 IST
Two months after the demonetisation decision, industrial unit owners, traders and workers still face a cash crunch. In addition, the Noida Entrepreneurs Association (NEA) estimates that demand for products of around 7,000 small manufacturing units in Noida has fallen by 40% due to limited cash use by consumers.
On November 8, the Centre had demonetised currency notes of Rs1,000 and Rs500. Two months later, new Rs500 and Rs2,000 notes have been introduced and queues at banks and automated teller machines (ATMs) have shortened. However, people still face cash shortage as banks continue restrictions on cash withdrawal.
“Due to the restrictions, a person can only withdraw Rs4,500 a day from ATMs and Rs24,000 a week from banks. Therefore, people are only spending on daily-use items such as groceries and delaying buying items not required immediately. As a result, industries are badly hit as demand of items such as electrical products, wire harnesses, seat covers, horns etc. are falling by 40%,” said Sudhir Shrivastava, spokesperson, NEA.
There are around 8,000 industrial units in Noida, of which 7,000 are for manufacturing electrical items and small items for automobile companies. They are also struggling with erratic labour supply post demonetisation.
“There are around three to four lakh workers employed with the 8,000 industrial units. In two months, we could get only 31,000 bank accounts of workers opened. Opening accounts of the rest is not easy as there are not enough banks to deal with the rush. It may take another six to seven months to open all the accounts. But how will we survive without workers for such a long time?” said Vipin Malhan, president, NEA.
There are 467 branches of various private and government banks and around 640 ATMs in Gautam Budh Nagar.
“If we really want to achieve a cashless economy in the district, we demand 100 more branches to ease the rush at existing banks,” said Malhan.
The NEA said they will also write to the Noida authority to ensure that almost all industrial sectors have a bank in the area.
“The new order makes it mandatory that a worker will not be paid salary in cash. If private banks also come forward to open workers’ accounts, the pressure on government banks can be eased,” said AK Singh, lead bank manager, Gautam Budh Nagar.
As of now, every bank in the district is getting an average cash supply of Rs10-Rs12 lakh daily, said officials. “We need more cash if we want to dispense as per the demands of each customer,” said Singh.
First Published: Jan 07, 2017 23:02 IST