Demonetisation effect: Massive layoffs, Tamil Nadu construction workers have no cash or food

CREDAI and other sources said nearly 1,000 major projects in Chennai and Kancheepuram districts have been hit.

Written by Arun Janardhanan | Chennai | Updated: November 23, 2016 1:53 pm
tamil nadu, tamil nadu daily wages, daily wages, daily payments, construction workers, daily construction workers, demonetisation, demonetisation effects, demonetisation news, india news According to experts and various agencies, the construction sector has come to a standstill in the region.

* “Work on a villa and apartment project in Navalur (Chennai suburb), where I was employed for a year, was stopped on Sunday (November 13). We have no clue about the whereabouts of the contractor… over 300 workers are waiting for wages.” — R Ayyanar, mason, 42.

* “I have not eaten properly for three days…The contractor’s phone is switched off… We will wait.” — Nizamuddin, construction worker-cum-painter, 32.

These are the voices of only two of the estimated half-a-million migrant and unorganised workers who are facing layoffs in the construction sector in Tamil Nadu, 11 days after Prime Minister Narendra Modi announced the demonetisation of Rs 500 and Rs 1,000 notes.

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According to experts and various agencies, the construction sector has come to a standstill in the region. Multiple reports from Chennai — which has the maximum share in the state’s construction sector — Coimbatore, Trichy and other areas warn of a disastrous situation if the currency shortage doesn’t get resolved soon.

Confirming reports that workers were struggling with no food or wages, N Nandakumar of the Confederation Of Real Estates Developers’ Associations of India (CREDAI), Tamil Nadu, said builders who are members of the organisation have been asked to arrange rations for workers at their shelters.

“On an average, there will be anywhere around 100 to 200 workers at a single project. CREDAI alone has 130 members (who are all leading builders) in Chennai. Many of us have decided to supply rations immediately as the situation is not too good. To prevent starvation, some of them have arranged catering services too,” he said.

However, CREDAI does not reflect the total number of builders and projects on the ground. According to a labour department official, there are 500-600 unorganised builders in Chennai, who are not members of CREDAI or other builders’ organisations. “Hundreds of these projects and thousands of workers employed in these projects have been affected. Neither a builders’ body nor a state government can handle this crisis,” he said.

While a labour department official said over 200 major construction projects in Chennai city, Old Mahabalipuram Road and GST Road areas have been either stopped or partially affected in the last four days, CREDAI and other sources said nearly 1,000 major projects in Chennai and Kancheepuram districts have been hit.

B Seenaiah, one of the largest infrastructure developers in the country and managing director of BSCPL, whose firm specialises in major highway and irrigation projects, said the impact on the construction sector may be anywhere between 30 to 40 per cent.

“We hope to get it resolved in 10 days. Since the payments from buyers have stopped, the contractors don’t have money to pay their workers. Hardly any of the workers have bank accounts where their dues can be deposited. If the crisis continues, the whole economy is going to be affected,” he said.

While the major players in the sector warned of a much larger crisis in the next few days, the workers are struggling to cope with their immediate situation.

R Ayyanar, a 42-year-old mason in Chennai who was working with a leading developer for over a year, said the workers, mostly migrants, are starving at their shelters.

“ Work on a villa and apartment project in Navalur (Chennai suburb), where I was employed for one year, was stopped on Sunday. We have no clue about the whereabouts of the contractor… over 300 workers are waiting for wages,” he said.

On Friday, Ayyanar stood in the queue outside the Kelambakkam branch of a nationalised bank. He said the bank officials allowed a customer to enter directly, with three bags full of currency for exchange.

“They took the bags and started counting all the Rs 500 notes, which would have added up to several lakhs… Prime Minister Narendra Modi said he is going to punish the rich. Who is being punished now? These rich people only need to give a call, the bank manager will send people to their homes with currency,” said Ayyanar.

Nizamuddin, a 32-year-old construction worker-cum-painter from a village near Kolkata, said he has not been able to contact his family for the last three days as he does not have money to recharge his phone. “I have not eaten properly for three days,” he said.

He said a friend of his contractor promised to provide rations before Monday. “The contractor’s phone is switched off, his friend refused to give his number too. We will wait,” he said.

S Janakarajan, an economist teaching at the Madras Institute of Development Studies (MIDS), said a large number of construction labourers are facing layoffs. Contractors who pay weekly wages are also helpless as there is a shortage of currency, he said.

“The total work force in our country is roughly 64 crore, out of which 90 per cent belong to the informal sector, whose contribution to GDP is roughly 50 per cent. While the farm sector has a 50 per cent share in this informal sector, about 30 per cent are construction workers… If the government is going to be indifferent to these basic facts, we are going to face disastrous impact, including famine,” he said.

Prakash Challa, governing council member of CREDAI and CMD of SSPDL Group, a leading player in the construction sector, said he appreciated the intention, but the implementation “should have been planned better”. “If the government doesn’t act immediately, there will be serious impact,” he warned.

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  1. A
    Abhinav Gour
    Nov 20, 2016 at 6:42 am
    Tap to add comment....I am an admirer of IE and reader for the lastore than 40 years . But it seems this newspaper is ignoring big gain and focussing on petty issues negative things and ignoring real cause and benifits of any scheme . Always down playing the demonitization so now stops to read it . Gone the days of Arun Shorie Goyankas . It appears a mouth piece of all opposition parties . All builders are blood suckers of poor people . Even ry cl employees can't afford to purchase house on these exorbitant price which ate due to black money involvement . So contractor fled the scene as black money supply stopped . But IE cant see
    1. V
      Nov 20, 2016 at 11:12 am
      Many are oversimplifying the issue.It is not inconvenience.It will a great trajedy if we refuse to accept real problem.
      1. A
        ashok s
        Nov 20, 2016 at 3:04 am
        This can't be excuse today a daily wagers earn 300-2000 per day , they can open bank accounts easily . and more often their are makeshift kitchens who offers them credit. If you try to ease the norms to builders this will be highly help cronies and not poor labour
        1. A
          Nov 20, 2016 at 11:53 am
          Demonetisation is one of the biggest ber by any government in India. Narendra Modi should be removed from PM post by BJP without any delay, otherwise he will continue to create tremendous harm to India by playing to the gallery and creating sensation just like suddenly visiting Nawaj Shraiff to stan in Shariff's family wedding. How he withdrew 86% currency circulation of the country in just 3 hours time? In India about 50% of villages have no Banks and nearly 75% of transaction is being done in cash This man's mental capability to run India is questionable. Now more devastating effects of Demonetisation will slowly materailise. Most probably, Modi did not consult any economist and/or financial professional before taking this decision. India's growth story is finished for time being. No NRI like me will put any money to India as the government's credibility is gone. There is still one hope, that is Supreme Court of India. Hope the court will stop this Tughlaki/lunatic act. All over the world people are watching in TV channels the agony of common man in immensely long line to get their money in Bank. What image it is creating of India in the eyes of the world?
          1. P
            PN badri
            Nov 20, 2016 at 3:25 pm
            Nowadays most of the employees in pubic/private sector getting their ry through bank accounts and they will face rough weather during first week of December 2016 if the government not raising according to the situation. SC remarks riot like situation will prevail if cash crunch continues. Amber signal from apex court.
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