How are small and medium enterprises coping with the fall out of demonetisation? Traditionally, these enterprises run on thin budgets and often suffer long delays in recovering the dues for supplies already made. With a liquidity crunch all over the country, these enterprises are having a hard time. But, outwardly most activities seem near normal. Industry insiders admit to some difficulty here and there, but nothing that they cannot tide over.
Some of the small and micro units, used to paying its workers in cash on a weekly basis have felt the cash crunch. Though they have been crying hoarse about the tight money situation, workers did not openly attack the management for deferred payment. They concede that this is not a problem created by the management. They also admitted that the management in many units had provided them permission to visit banks to draw money even during factory working hours.
A week has gone by since the demonetisation announcement. Industry representatives had initially issued statements stating that they would have to stop operations as the withdrawal limits are small and they would therefore not be able to source the materials or pay off workers, particularly those on weekly basis.
But most of these micro and small units are still operational. There seems to be no visible signs of industrial unrest due to non payment of workers' wages.
There have been some rumours that some experienced workers, who had stayed on with the same employer for say four- five years, were given a month's wage and some extra amount as bonus – all in cash, and in advance. This could not be confirmed though.
For industrialists though, life goes on like before. A small scale industrialist didn't disrupt his holiday plans despite the liquidity crunch. He said he had gone to Kerala for the weekend with his family and friends with just Rs 150 in his wallet, a couple of the now invalid Rs 500 and Rs 1000 notes, and plastic cards as well.
“Gas stations accept these notes, we settled our hotel dues by swiping our card and got back with the money in the wallet intact. If you ask, most people, even small shops accept cards in Kerala, and banks are giving Rs 4,000 in exchange for these notes,” he said.
Meanwhile, bankers think some customers seem to be making good use of loopholes in the system by walking into different banks with the photocopy of his/ her identity card and walking out with enough change. Life seems to go on despite the difficulties.