Cash crunch hits knitwear cluster

Reactions from industrialists in Tirupur knitwear cluster to the cash/currency crisis arisen subsequent to the demonetisation are going on in different paths even though the hardships faced by the garment industry were apparent for anyone to notice.

Many of the industrial units were unable to make the usually-carried out cash purchase of raw materials or disburse weekly and daily wages to their workers due to the limitations imposed on cash withdrawals and non-availability of adequate currency notes in lower denominations.

Though the money crunch has made a cascading effect on the functionality of the predominant micro, small and medium scale enterprises in the cluster, many of the associations representing units in different segments of the apparel production chain were yet to make any representations to the Union Government appraising the actual situation.

When asked about the silence of some major players, a section of entrepreneurs seeking anonymity told that it was mainly because that the office-bearers of some associations did not want to invite the wrath of the authorities by highlighting the problems.

A prominent textile association, representing exclusively small and medium sector units, had sent a memorandum to Prime Minister in which they could be seen praising the Government for demonetisation and even went on sidetracking to relatively trivial issues requesting the government to take steps for preventing the practice of people scribbling on new currency notes.

However, the said memorandum (the copy of which given to media) did not have any mention about the difficulties or issues faced by the member units.

M.P. Muthurathinam, president of Tirupur Exporters and Manufacturers Association (TEAMA), feels that the crisis faced by the textile sector subsequent to demonetisation should be taken to the notice of the authorities in its right perspective.

“Taking up issues does not mean that anyone is against eradication of black money. What it should be informed to the government is that the demonetisation has been good but the manner in which it was implemented had generated certain functional problems both for industrialists and workers,” he said.