What a loss! Demonetisation set to affect 4,00,000 jobs
Representational picture. Pic/AFP
Prime Minister Narendra Modi's big move on demonetisation has resulted in temporary job losses especially in labour-intensive sectors like textiles, garments, leather and jewellery.
As many as 4 lakh people, mostly daily wagers, may have either lost their jobs or shunned work temporarily due to the lack of payment so far, and the number is only going to grow if the cash crunch persists, senior industry executives said on condition of anonymity.
Interestingly, Engineering Export Promotion Council (EEPC) vice-chairman Ravi Sehgal told The Financial Express even though some of the labourers have bank accounts, they are unwilling to accept direct payment through the banking channel for fears that if the amount exceeds Rs 50,000 (a year), they could lose their below poverty line status and consequently be stripped of various subsidy benefits.
Commerce and industry minister Nirmala Sitharaman was updated on various export promotion councils and warned of lower production.
According to The Financial Express, roughly a fifth of the almost 32 million people employed in the textile and garment sector who are paid wages either daily or weekly are hit. While some of them have already lost their jobs, many are apprehensive of such a fate. A majority of garment industry workers, especially in hubs like Tirupur, do not have a savings bank account there, as 70% of them are migrant workers from the north and northeastern parts of the country.
Similarly, 20-25% of the roughly 2.5 lakh workers in the leather industry have been adversely affected as they are daily wage workers. The industry has been hit particularly hard as 90% of the units are small and medium enterprises. In the jewellery sector, 15-20% of workers, who are paid daily, have been affected.