Even as the rest of the country is concerned about cash withdrawals on the pay day, there are about eight million bidi workers who haven’t received their wages since November 8. With 90 per cent of workers located in rural areas with no bank accounts, bidi units have not been able to pay wages due to cash shortage in the wake of demonetisation.

Workers typically earn between Rs 50 and Rs 250 a day and bidi companies pay the wages on a weekly basis. However, ever since the Narendra Modi government’s decision to scrap old Rs 500 and Rs 1,000 currency notes, they have not been able to do so.

“We want to pay but we don’t have sufficient cash on hand after demonetisation. Because of this, over eight million workers have not received payments from the bidi companies,” said Rajani Patel, Managing Director, Telephone Bidi, a Gujarat-based bidi firm.

Facing declining demand coupled with cash shortage, bidi companies are now considering reducing production from December, which could render these eight million workers temporarily unemployed.

“Mostly labourers buy bidi and currently they’re facing a cash problem. As a result, demand for bidi has gone down and it might decline further in the coming days if the cash problem persists,” said Umesh Parikh, advisor, All India Bidi Industry Federation.

There are nearly 2,000 bidi manufacturer companies in India. Most of these companies are located in Bihar, West Bengal, Karnataka, Chhattisgarh and Madhya Pradesh. The companies give production orders to contractors who in turn employ bidi workers to fulfil the same. The size of the bidi industry in India is estimated at Rs 7,000 crore.

“We have asked the workers to open accounts in banks but most of these are women and reside in remote places in rural areas where banking facilities are yet to reach. Moreover, they are more accustomed to cash transactions,” said Patel.

According to industry sources, out of eight million bidi workers, nearly 70 per cent are women who belong to tribal and rural areas in Karnataka, Andhra Pradesh, Bihar, Madhya Pradesh, Chhattisgarh, Maharashtra and West Bengal. The bidi industry is a village or cottage industry as most of the people associated with it belong to tribal and rural areas across India. A majority of workers are getting wages on daily, weekly and monthly basis.

Source: Business Standard