The demonetisation has left the Kozhikode-based Uralungal Labour Contract Cooperative (ULCC) Society, the largest labour contract cooperative in Asia, cash-strapped.
The ULCC, which has about 4,000 wage workers, including around 1,000 migrants, on its rolls, needs to pay them every weekend — in cash.
However, because of the demonetisation of high value currency notes, the firm is eligible to withdraw only Rs.24,000 a week from its bank, like any other individual.
“We find it really hard to pay our labourers after they have put in a week’s work,” Paleri Ramesan, president of ULCC, told The Hindu . “Last week, we could make payment in part, but this weekend it is going to be tough.”
Mr. Ramesan said as for the employees who were paid monthly, their salaries could be transferred online, but the workers needed to be paid in cash. He said it was funny that the Reserve Bank of India and the Centre were treating firms employing hundreds or even thousands of weekly labourers on par with individuals for the cash quota.
“How can an institution like ours which employ 4,000 workers pay them every week with a cash quota of Rs.24,000?” he asked. He said many of the migrant workers were helping their colleagues with loans from their cash savings to tide over the crisis.
The ULCC, set up in 1925, takes up large public work contracts such as roads and bridges and is considered a shining example in the cooperative sector. The society, which also runs the UL Cyber Park, an IT special economic zone in Kozhikode, is known for its liberal welfare schemes for wage workers and its participatory management model.
Mr. Ramesan said many companies such as plantations that employ large number of wage labourers were also in dire straights because of the demonetisation restrictions.
He urged the authorities to relax the restrictions for such employers so the workers would not be put to hardships.
Demonetisation has left the largest labour contract cooperative in Asia cash-strapped
