The small and medium enterprises (SMEs) across industrial pockets in Gujarat are bracing themselves for the salary payment period beginning December 1, 2016.
Barring a few industrial pockets, where the wage payments are made on weekly basis, this is going to be the first salary payout to the workers after the demonetisation announcement on November 8. The government, through Union Ministry of Labour and Employment has insisted on salary payments through bank accounts.
But most factory and industrial unit owners have expressed their inability to pay salary in modes other than cash, citing some practical challenges.
"There will be problem for industries which are labour intensive such as textiles, where large number of migrant workers are employed. They lack necessary documents to open a bank account. Also, they have limited understanding of technology to use banking on phone. We represented such issues to various levels in the government. We feel that it will take some more time," said Bipin Patel, President, Gujarat Chamber of Commerce and Industry (GCCI).
The situation is worrisome in the Saurashtra region, where a large number of small industries are concentrated in engineering and brass-parts making. In Jamnagar for example, the tension has already mounted as most factory owners do not have sufficient cash to make payments to the workers. The factories at Jamnagar follow weekly payment cycle on every Thursday.
"In last two cycles we managed somehow. But this time, it is not possible to make payment unless the banks give us required cash. Cheque payments is not possible either. Where is the time to explain banking and digital payments to the workers? How will they cultivate habit overnight? If this payment doesn't happen, we fear some trouble," said Kirit Mehta, president, Jamnagar Chamber of Commerce and Industry.
In place like Morbi, a graver condition prevail. The tiles making units usually outsource the human resources to the labour contractors, who collect the payment from the companies in bank account and pay these workers, who are mostly from out side Gujarat, in cash.
"This cycle is completely blocked. I am worried because I have to make payment to my labourers and I am unable to get necessary amount from the bank and the government says pay through cheque. That's not possible at least for now," said an owner of a manpower supplier agency not willing to be quoted.
Workers from unorganised sector are likely to face a major challenge as payments from their employers are likely to be deferred.
"We fear that a large portion of these unorganised workers may not get their salary at all. There are about 6-8 lakh unorganised workers in Ahmedabad city alone. A few of them may have a bank account but many others are likely to be left in the lurch due to lack of cash," said Ashok Panjabi, a lawyer and senior vice president, Gujarat Pradesh Congress Committee (GPCC).
Meanwhile, there are industrial clusters like Bhavnagar chemicals industries or Dahej Industrial Association, where payment of wages is not bothering the factory owners. Dahej, being the chemical hub, has concentration of large manufacturing units including a few of the multinational groups.
M A Hania, President of Dahej Industries Association, stated that most of the industries located in the industrial area employ workers on their rolls and pay wages through accounts. "Therefore, tomorrow we do not see major challenges arising. However, our representatives have met the district administration to ensure smooth functioning of cash transactions wherever needed," he said.