Demonetisation and industrial woes

Future uncertain for small businesses as cash dries up

Having suffered losses for almost six years after the recession in 2008, Deepak Rohilla (46), who runs an industrial fabrication unit in Krishna Nagar here, is now forced to shelve plans of expansion. He was considering buying more machines over the next few months but the demonetisation scheme has forced him to hold off on it.

A year to improve

“Business in several small units like ours had grown over the past one year. Hoping the trend will continue, I planned to add more machines. But demonetisation has poured cold water on my plans. In less than a month, I have lost over 50 per cent of business and it may take more than a year for the situation to improve,” said Mr. Deepak. Besides Krishna Nagar, a large number of small engineering units running illegally from residential areas such as Sanjay Colony, Parvatiya Colony, Saroorpur and parts of Ballabgarh have been hit badly by demonetisation.

Catering to bigger factories, most of these units are cash-driven.

Work orders down

“The demand has gone down and the work orders have dried up. Also, we do not have enough cash to purchase raw material for the orders coming our way. If the banks pay as per the maximum limit fixed by the Centre for savings and current accounts per week, we can manage. But they are not dispensing over Rs.5,000-6,000 per withdrawal,” said Inder Mohan Sharma, who runs a gas stove parts unit in Krishna Nagar.

The workers employed in these units have also been hit and many of them have lost their jobs.

Not open since Nov 8

“Nine of my workers had gone home for vacations. I have told them not to return for work. There has been no new work order for two weeks. We mostly deal in cash. So no cash means no work,” said Parveen Goyal, who owns a small wire manufacturing unit in Sanjay Colony.

Mr. Parveen said that he had opened another unit near Sector 25, a fortnight before November 8, and employed eight workers, but the unit has not opened for a single day post demonetisation. Upender, who works at a hydraulic machines unit in Sanjay Colony, said four of his fellow workers had left since November 8 and he too was finding it difficult to make ends meet. “We have not sold a single hydraulic machine over the past month.

Earlier, I worked overtime to augment my income. But now I am idle for the most part of the day,” said Mr. Upender, a native of Bihar.

Lost jobs

Running a small weighing scales manufacturing unit, Het Lal Kaushik (55) concedes that at least 20-30 per cent of the workers in these small units had lost jobs post demonetisation.

Though there are no exact figures on the number of these units and the workers employed in them, Faridabad Industries Association president Navdeep Chawla said 10-20 per cent of around 5 lakh workforce in Faridabad, both organised and unorganised sector, had lost jobs due to the slowdown following demonetisation of Rs.500 and Rs.1,000 currency notes.

He, however, expressed hope that the decision would benefit the organised sector in the long-run.


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Printable version | Nov 24, 2021 11:00:03 AM | https://www.thehindu.com/news/cities/Delhi/Future-uncertain-for-small-businesses-as-cash-dries-up/article16798506.ece

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