The Small and Medium Enterprises (SMEs) across industrial pockets in Gujarat are bracing themselves for the salary payment period beginning December 1.

Barring a few industrial pockets, where the 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 the 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 practical challenges.

“There will be problem for industries which are labour intensive such as textiles, where a 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 of the Gujarat Chamber of Commerce and Industry (GCCI).

Brass parts units

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, tension has already mounted as most factory owners do not have sufficient cash to pay workers. The factories at Jamnagar follow weekly payment cycle (every Thursday).

“In the last two cycles, we managed somehow. But, this time, it is not possible to make payment unless the banks give us the required cash. Cheque payment 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 of the Jamnagar Chamber of Commerce and Industry.

In place like Morbi, a graver condition prevails. The tiles-making units usually outsource human resources to the labour contractors, who collect the payment from the companies in bank account and pay these workers, who are mostly from outside the state , in cash.

Source: The Hindu Business Line