Demonetisation and industrial woes

No ‘happy’ New Year for business in Kottayam

They have heralded the arrival of the ‘season’ by adorning their shops with Christmas lamps, but the business community in the district is holding their fingers crossed, thanks to the unprecedented business environment created by demonetisation at the local level.

“ It is different this time. I have ordered enough goods to last at the most one week; just to tell my clients that we are still in business,” said Najeeb, who runs Safa Trades, which deals in imported Chinese goods targeting the Christmas market.

“We expect only one-tenth of what we traded last year,” he said. These goods are the least priority for the people, he pointed out.

Annamma Joseph Kottukappally, managing director of Ann’s Bakery, foresees at least 30 per cent fall in business this season. Nearly 30 per cent of the business for premium cakes comes through orders from the corporate sector.

“There will be considerable fall in business in this section,” she said. “We cannot think of Christmas without cakes. So we have to provide affordable cakes this time. But we cannot compromise on quality since quality is our USP,” she said.

The Christmas-New Year season also happens to be the planning period for marriages in Central Kerala.

“The new provisions announced by the authorities have considerably affected the purchasing capacity of the clients. The sales have already been affected,” said Stephen Chacko, director, Pulimoottil Silk House.

More than 30 per cent of their business is through cash sales. Demonetisation is surely going to have an impact in the short run. “We don’t know how long it will last,” he said.

Babu M. Philip, executive director, Josco Jewellers, hopes the market would revive.

“In the week after the declaration, sales had declined to just 20 to 25 per cent but it has shown indications of a revival during the third week. Marriage sales will be hit hard since currency availability with the people in the interiors has been hit on account of the sanctions on the cooperative sector,” he said.

Since nearly 50 per cent of the business is done in old gold and many have joined advance booking schemes, the business could hold on, he said. “But the Rs.2.5-lakh cap on expenditure is definitely a dampener,” he said.

The local builder community too are faced with new challenges on account of demonetization.

The Christmas season used to have a large number of Malayali NRIs from the U.S. arriving for reunion meetings.

“We have a huge number of enquiries, but there appears to be a delay in realisation,” said Dony Sebastian Karippaparambil, director, Home Basics.

The construction sector has been badly impacted by demonetisation as it is not able to disburse the weekly remuneration to workers and also on account of the general slump in the raw material market, he said.

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Printable version | Dec 9, 2021 6:08:00 AM |

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