The sports goods industry of Meerut, world-famous for producing quality cricket equipment, has taken a severe hit due to demonetisation which has virtually stopped cash flow in the market.
Production levels are down by more than half since cash is required at every stage: from procurement of raw material to transportation and to payment of labourers’ wages. Meerut, along with Jalandhar in Punjab, accounts for nearly 75 per cent of the total production of the sports goods in India.
According to leading manufacturers, several small production units had to shut shop because they had no money to pay labourers. “Ours is a labour-intensive industry. Very frankly, right now, we do not have sufficient cash to pay the workers,” said B.D. Mahajan of B.D. Mahajan Sons and Private Ltd., which makes cricket goods. “The government’s control over how much cash one can withdraw has resulted in most of the small units closing down. Big manufacturers are somehow able to survive but the future does not look well if the government’s control over cash withdrawal continues like this,” said Mr. Mahajan.
The cash crunch has badly hit the small units that manufacture cricket balls — they are located in about 30 villages around Meerut — and which provide employment to over 10,000 people. “We do not have the money to procure raw material,” said Pradeep Singh from Sarai Qazi village.
