The Costs of Demonetisation: Power Loom Workers Lose Jobs; Tourism Industry Takes a Hit

A daily round-up on the human impact of demonetisation.

A notice is pasted on the window of a medicine shop stating the refusal of the acceptance of 500 and 1000 rupee banknotes in Bengaluru, India, November 10, 2016. REUTERS/Abhishek N. Chinnappa

A notice is pasted on the window of a medicine shop stating the refusal of the acceptance of 500 and 1000 rupee banknotes in Bengaluru, India, November 10, 2016. Credit: Reuters/Abhishek N. Chinnappa

 

Power loom workers stage protest

Members of the CITU Powerloom Workers Union staged a demonstration in Tamil Nadu urging the Modi-led BJP government to provide adequate compensation to the power loom workers who have lost their jobs due to demonetisation.

According to The Hindu, more than 50,000 workers are employed in the power loom units in Pallipalayam and surrounding areas in the state. The workers who have been rendered jobless due to the ban on Rs 500 and Rs 1000 notes have resorted to borrowing from money lenders, who in turn are exploiting them.

Tourism industry declines

The tourism industry in Kerala has taken a hit due to demonetisation. According to the Economic Times, an estimated 70% of tourists visit the state during the “peak season” of October to March. A large majority of these tourists arrive during the months of November to February. However, according to Abraham George, chairman of tour operator Intersight, the state is likely to see a 30% fall in tourist arrivals due to the cash crunch.

This fall in tourism has in turn adversely affected many allied sectors. Restaurant owners, tour operators, houseboat owners – all have been complaining about the lack of tourists in the peak season. The houseboat industry in Alappuza and Kumarakom has, according to Economic Times, seen a sharp fall in the hiring of houseboats, which has affected the operators and staff of about 900 boats.

The Goan tourist industry is usually thriving at this time of the year. However, according to an IndiaSpend report, there has been a significant dip this year. Post demonetisation, foreign tourists have been forced into standing in long ATM queues to withdraw Indian currency. The tourism industry in the state is labour-intensive and the decline in tourism has put the livelihood of 50 million at stake.

Financial institutions hit

According to a report in The Hindu, micro-finance institutions have been severely affected due to the note ban. In Dharwad district of Karnataka, 2.42 lakh customers have taken loans worth Rs. 375 crore. Since most of the customers had deposited their old currency notes in banks and were unable to withdraw the amount in required quantity, collections and disbursement process have been adversely affected.

FMCG industry sees a drop in sales

The Fast Moving Consumer Goods industry has been hit hard post-demonetisation. It is the fourth largest sector in the Indian economy, but since the demonetisation announcement on November 8, it has reported a 3.8 thousand crore drop in sales.

Retailers have been stocking less due to a decline in consumer spending. The industry includes personal care items such as, toilet soaps, toothpaste and shampoo – which have seen the steepest decline by retailers, the Times of India reported.

No money for wife’s cremation 

Juel Kujur, a retired government employee from Jharkhand’s Latehar district, was forced to raise money for his wife’s cremation from neighbours and acquaintances when his bank turned down his request for a cash withdrawal.

According to the Hindustan Times, a local State Bank of India branch in Birshrampur village could not pay Kujur, who is in his late eighties, Rs 10,000 as they did not have enough cash. He was informed that the bank could only give him Rs 4,000 and not the full amount.