Demonetisation: 35 per cent job losses, 50 per cent revenue dip, says study by largest organisation of manufacturers

The study, conducted by AIMO, has also projected a drop in employment of 60 per cent and loss in revenue of 55 per cent before March 2017.

Written by Arun Janardhanan | Chennai | Updated: January 9, 2017 12:26 pm
demonetisation, demonetisation effect, jobless, no jobs, revenue dip, small scale industries loss, company loss, AIMO, all india manufacturers organisation, SME, indian express news india news This was the third such study conducted by the AIMO on the impact of demonetisation and was circulated among members last month. (Representational image)

In the first 34 days since demonetisation, micro-small scale industries suffered 35 per cent jobs losses and a 50 per cent dip in revenue, according to a study conducted by India’s largest organisation of manufacturers.

The study, conducted by the All India Manufacturers’ Organisation (AIMO), has also projected a drop in employment of 60 per cent and loss in revenue of 55 per cent before March 2017. The AIMO represents over 3 lakh micro, small scale, and medium and large scale industries engaged in manufacturing and export activities.

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The study stated that almost all industrial activities have come to a standstill, with the Small and Medium-sized Enterprises (SMEs) sector worst-hit. “While AIMO understands certain immediate repercussions of such a bold step (demonetisation) by the government, it did not anticipate or was prepared for such a jolt to industries even after one month,” said the study.

This was the third such study conducted by the AIMO on the impact of demonetisation and was circulated among members last month. A fourth study is expected soon.

Among the major findings of the study are:

# Medium and large scale industries engaged in infrastructure projects, such as big-ticket road construction, reported a 35 per cent cut in employment and 45 per cent revenue loss. The number of jobs and revenue are expected to dip by 40 per cent by March.

# Medium and large scale industries, including foreign companies, engaged in export-oriented activities reported 30 per cent job losses and 40 per cent revenue fall. This is likely to be 35 per cent and 45 per cent, respectively, by March.

# In the manufacturing sector, medium and large scale industries reported the least job-losses in the first 34 days (5%) and took a revenue hit of 20 per cent. This dip is likely to be 15 per cent for both by March.

According to the study, the factors that contributed to the impact are: zero cash inflow, rules curtailing cash withdrawals, staff absenteeism, a weaker rupee, choked fundraising options, inability of banks to work on proposals, derailed real estate sector, fear among foreigners, poor preparedness, and uncertain status of GST.

K E Raghunathan, national president, AIMO, said the studies were conducted by an expert committee set up by the organisation. He delined to provide details of the committee but said that it includes industrialists, SMEs and export sector experts, chartered accountants, consultants and lawyers.

Raghunathan said that AIMO had sent periodical reports about their findings to the Union commerce and finance ministries, on November 12, November 25 and December 12. “Unfortunately, there was no response of acknowledgement or reply from these ministries. Since the study is extremely critical of the Centre’s failed plan, we are unable to reveal the identity of the experts preparing these reports,” he said.

Referring to the government’s approach, Raghunathan said, “They turned a blind eye towards this emergency situation. They simply closed their ears, kept patting themselves or their bosses. Among all the states, Maharashtra and Tamil Nadu are the worst affected. The impact in these two states is still being ignored, thanks to an inefficient government in Tamil Nadu and a Maharashtra government that is bound to support the demonetisation drive,” he said.

The AIMO represents about 13,000 direct members and 3 lakh indirect members in India, including nearly 3,000 industries and associations in Maharashtra and 1,200 in Tamil Nadu.

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  1. U
    Ulhas Desai
    Jan 9, 2017 at 3:37 pm
    I am job less. Bekari bhatta do immediately nahi to khursi khali karo.
    Reply
    1. U
      Ulhas Desai
      Jan 9, 2017 at 3:32 pm
      Modi give jobs earnings..
      Reply
      1. O
        Onkar Singh
        Jan 10, 2017 at 3:29 pm
        Only a politician like Modi can survive in such a situation without money because everything for him is paid by the state.But all those engaged in small business need money to run their business.Without money they can't take work from their employees,employees need money for their survival.With a cap on withdrawal of money,the economy has to slow down.The Indian Express likes to carry the article of how bad things are,but is afraid of bad comments on the bad situation the country is ping through so that the paper can get a Bharat Ratna on 26 January 2017!!!
        Reply
        1. P
          Patriot
          Jan 9, 2017 at 9:05 am
          Shameful article by shameful organization on instruction of shameless masters.
          Reply
          1. B
            Bhagyashree
            Jan 9, 2017 at 9:56 am
            The numbers are fair essment and consistent with global health of economy, huge amount of political uncertainties and end of globalization per se. But the goal of DeMot was political, which cannot be judged by economic barometer and parameters alone. The government is hiding behind its all round failure after making 'bold' election promises and fear of losing complete credibility. Its a first cl deceitful narrative which the party spells out repeatedly every hour before the nation.lt;br/gt;What goes up fast and high would always land with a crash much worse than a soft landing. So poor India is justifiably fearful of the hard times ahead, in fact same can be said about the entire nation.
            Reply
            1. S
              SubbuI
              Jan 9, 2017 at 12:15 pm
              CRIME MINISTER NALAYAK NMODI IS DIRACTELY AND TOTALLY RESPONSIBLLE FOR THE AFTER MATH EFFECTS OF HIS SINGLE IC DECESION OF TRAGIC DEMONETISATION. GOD KNOWS WHAT WILL BE GAINS IMAGENORY OR MAGICAL GAINS AS PROPAGATED BY THE BUNCH OF RULING BJP CLIQUE lt;br/gt;INSTEAD ELIMINATING BLACK MONEY AND FAKE CURRENCY IT MADE BOTH OF THEM LEGIMATE AND OUR CRIME MINISTER IS FOOLING PEOPLE WITH HIS LIES AND DREAM SELLING. EVEN IF YOU ADD UO DEMO EXPENSES AND MAM DAYS AND PRODUCTION LOSES IT WILL GO MORE THAN A LAC THOSAND CRORESAT MINIMUM.JIO MODI!
              Reply
              1. V
                Vinay
                Jan 9, 2017 at 6:29 am
                that was not a job loss. Most of the labours deplo on bank/ATMs to exchange and deposit cash. Labours god better daily wages than what they get in SMEs. Once all the cash is deposited, work will resume as normal.
                Reply
                1. A
                  Aditya
                  Jan 9, 2017 at 9:24 am
                  If the above data is correct then please tell me how is central excise (which is imposed on factory production) up 31% in the month of Dec 2016 over Dec 2015 figures ?
                  Reply
                  1. A
                    Am A
                    Jan 9, 2017 at 6:03 am
                    The bigger corporates are less affected by note crunch, and hence makes less news. The smaller unorganised sector is largely hit, but that makes little news. And the govt is still playing the propoa game!
                    Reply
                    1. A
                      Aniruddha
                      Jan 9, 2017 at 2:53 am
                      Despite 50% drop in manufacturing and 35% drop in the employment, the state and central governments tax revenues have increased as reported in TOI. Can some economist explain how that is possible ?
                      Reply
                      1. A
                        AlsoIndian
                        Jan 9, 2017 at 5:02 am
                        AND IT IS SO PERFECTLY EXPLAINEDlt;br/gt;lt;br/gt;This is what Steve Forbes – one of the top finance journalists and forecasters in the world - says about demonetization:lt;br/gt;lt;br/gt;I wonder what would Bhakts name Steve Forbes? Terrorist? Porki? Aaptard? Anti-national? Sickular? lt;br/gt;lt;br/gt;• What India Has Done To Its Money Is Sickening And Immorallt;br/gt;• India is the most extreme and destructive example of the anticash fad currently sweeping governments and the economics profession.lt;br/gt;• The government bureaucracy is notorious for its red tape, lethargy and corruption, forcing people to get by on their wits.lt;br/gt;• India's government perpetrated an unprecedented act that is not only damaging its economy and threatening desution to countless millions of its already poor citizens but also breathtaking in its immorality.lt;br/gt;• The World Bank's annual survey, Doing Business, measures how difficult it is to start and manage a business in 190 countries, using such metrics as what it takes to set up a legal business, obtain construction permits and get electricity. India ranks among the worst in the world in these areas.
                        Reply
                        1. A
                          AlsoIndian
                          Jan 9, 2017 at 5:01 am
                          The biggest financial ber of 21st century....
                          Reply
                          1. A
                            atul
                            Jan 9, 2017 at 9:11 am
                            Blind Bakht Of IMPOTENT Feku G. Open ur eyes and ask feku g to get back his wife first, before preaching nation building
                            Reply
                            1. B
                              Bhogendra Thakur
                              Jan 9, 2017 at 9:11 am
                              This is on expected lines, except for Modi and his supporters. We may not be able to recover in 2017-18 also.
                              Reply
                              1. M
                                Manojkumar Singh
                                Jan 9, 2017 at 6:41 am
                                Demonetisation: 35 per cent job losses, 50 per cent revenue dip, says study by largest organisation of manufacturers
                                Reply
                                1. B
                                  Bhaskara Rao Neethipudi
                                  Jan 9, 2017 at 2:56 am
                                  Study of All India Manufacturers Organisation reveals----
                                  Reply
                                  1. B
                                    Bikram Rana
                                    Jan 9, 2017 at 10:52 pm
                                    वाह रे वाह अच्छे काम के े प​रिणाम्
                                    Reply
                                    1. D
                                      DA
                                      Jan 9, 2017 at 11:05 am
                                      The scale of problems being described here should have triggered an outright recession. While growth has dipped, we are nowhere near a full blown recession.lt;br/gt;lt;br/gt;Highly dubious figures, in my opinion. No wonder the "expert committee" is remaining anonymous.
                                      Reply
                                      1. A
                                        Anand
                                        Jan 9, 2017 at 6:36 am
                                        I hope you are aware of what happened to Hitler - He killed himself like a cowardly rat in an underground h0le , while 1000's of his citizens were slaughtered and r*ped by the invading Russians.lt;br/gt;India needs people like Sardar Patel , Swami Vivekananda , Ambedkar and Netaji Bose .
                                        Reply
                                        1. D
                                          Dino
                                          Jan 8, 2017 at 11:12 pm
                                          It is a loss of Rs. 25 lakh crores minimum to the economy and industries. Those in power do not even think that if millions of jobs are lost and industries shut down then Income Tax collected by this Government too will fall to lowest level then for its survival this Government start taking everyone money in Banks, everything in people lockers and house and property to pay for ries of BJP leaders and othe politicians.
                                          Reply
                                          1. V
                                            Venkatavaradan Vanavasi
                                            Jan 9, 2017 at 12:11 pm
                                            NOW IS THE TIME FOR THE INTRODUCTION OF A THREE DAY WEEK
                                            Reply
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