New Delhi, Dec 2 (KNN) Struggling to pay wages to labourers due to cash crunch is not the only problem that the MSMEs are currently facing. Migration of workers back to their home towns is another problem due to no cash or no work is another problem that the sector is reeling under presently.

The industry is hailing the Prime Minister’s move to curb black money menace in the country but at the same time on the business front the industry, especially the micro, small and medium enterprises (MSMEs), is incurring heavy losses each day due to non-availability of cash required to do daily business.

The situation is almost same for small industries across the country as they not only employ local people at their factories, but also have workers in large numbers from other states.

Talking to KNN, Shahnawaz Ahmad, IIA-Amethi Chapter Chairman, said, “The businesses of small entrepreneurs have been badly hit. The businesses are shutting down due to this. In Jagdishpur area almost 60% industries have been impacted due to non-availability of raw materials, lack for cash for logistic payments, no payment of workers etc.”

On top of all this, the labourers from other states, who have been working here for quite some time now, are moving back to their home towns, he added.

Down south, the situation is no different. Anil Reddy Vennam, President, Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry, Hyderabad, told KNN, “Not only the workers who are paid in cash are affected. Even the senior people who receive their payments through cheques or NEFT are not able to withdraw any money. At any taken point, each and every individual require some hard cash because everything cannot be paid online or everything cannot be paid through scratching the card. So definitely a certain level of income, at least 25 to 30 percent of the amount they required in the form of hard cash for regular expenditure. And to withdraw the amount there is no cash in the ATMs and it is not possible to stand in the ques to get that small cash.”

For the labourers who don’t have bank accounts and are working on the daily wages, he said, they are facing lot of problems.

“Even we cannot help them because we are not getting that amount from the banks or ATMs. Since last 15 to 20 days most of the companies have stopped getting daily labourers and the problem is same whether it is Andhra Pradesh or any other state,” Vennam said.

He added that the labourers who have their main accounts in U.P. or Bihar and are working here, they are unable to withdraw the money.

“Like group of twenty people came together they are returning back to their residence. We are also helpless as we cannot issue the cheque for small amounts regularly. And banks have started distributing money after 2:00 pm as banks after getting the money from the RBI. Government is issuing regular notifications but banks are not able to work out those plans,” Vennam added.

Karnataka Small Scale Industries Association (KASSIA) said the MSMEs in particular have been affected badly in the absence of cash for the payment of wages and raw-material purchase.  By very nature, these industries are heavily dependent on cash for payment of wages as most employees either have no bank accounts or normally are paid in cash.

For or against demonetization is one aspect of the current situation while its impact on trade, businesses and lives is another aspect. There is a need to look at both the aspects separately and deal accordingly. (KNN Bureau)