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Demonetisation impact: Production on decline, Mumbai workers in small factories lose jobs

The final products made out of these raw materials are usually sold in small shops or local trains, where customers have no option but to pay in cash.

Written by Benita Chacko | Mumbai |
December 8, 2016 1:19:55 am
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Customers have little to spare for cash-dependent sectors.

WITH consumers forced to cut expenses due to the demonetisation move, small factories in the city have slowed down production, and workers and daily-wage labourers are bearing its brunt. In Malad’s imitation jewellery raw material shops, workers are facing a crisis, with many likely to lose their jobs if demand doesn’t pick up.

The final products made out of these raw materials are usually sold in small shops or local trains, where customers have no option but to pay in cash.

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Jitendra Janani, manufacturer, and secretary, raw material of imitation jewellery association (RICA), says, “Since our products are not essential goods, we don’t have many takers. Our production has been reduced. Our factory functions only on alternate days now. Our workers have been with us for long and we can’t just take away their livelihood, but may be forced to.”

The workers in the garment factories of Malad are already facing this reality. Lack of work in the factories, some on the verge of shutdown, has led to many returning to their villages.

“Once business slowed down, we told our workers the situation would take a few months to normalise. Out of my 20-25 staff, only three to four remained, while the rest went back to their villages,” says Vinod Boracha, an ethnic wear manufacturer. While Boracha is still managing to pay the day-to-day expenses of his three permanent workers, his contract labourers have not been as lucky.

Naim, one of the tailors from Boracha’s factory, who will return to his village in Uttar Pradesh, says, “As there was no production we all decided to return to our villages, where we know people and it is easier to get things on credit. In Mumbai, who will help us? We will return once the situation normalises.”

Rahul Mehta, managing director of 109F and president of the clothing manufacturers association of India (CMAI), says, “There was a drop of over 40 to 60 per cent in the market after demonetisation. However, while bigger brands have recovered well, smaller manufacturers and retailers, who largely deal in cash sales, have been affected more. In the coming three to six months there will be a slowdown, but we are hoping that things will improve after that. We are working with the textile ministry to shift payments to workers from cash and vouchers to cheques. We are also helping our workforce open bank accounts.”

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