They, however, added that this estimate is based primarily on anecdotal evidence and that a clearer picture will emerge in the weeks to come.
Interestingly, Engineering Export Promotion Council (EEPC) Vice-Chairman Ravi Sehgal said even though some of the labourers have bank accounts, they are unwilling to accept direct payment through the banking channel for fears that if the amount exceeds R50,000 (a year), they could lose their below poverty line status and consequently be stripped of various subsidy benefits.
In a meeting with commerce and Industry Minister Nirmala Sitharaman on November 21, various export promotion councils warned of lower production.
The mood was sombre and some of them said many factories had cut down on production by half from the pre-demonetisation level due to the liquidity crisis, said an industry executive present in the meeting.
They sought up to a tenfold hike in the cash withdrawal limit from the current Rs 50,000 a week to be able to conduct certain necessary business transactions.
Roughly a fifth of the almost 32 million people employed in the textile and garment sector who are paid wages either daily or weekly are hit. While some of them have already lost their jobs, many are apprehensive of such a fate. A majority of garment industry workers, especially in hubs like Tirupur, do not have a savings bank account there, as 70% of them are migrant workers from the north and northeastern parts of the country.
Similarly, 20-25% of the roughly 2.5 lakh workers in the leather industry have been adversely affected as they are daily wage workers. The industry has been hit particularly hard as 90% of the units are small and medium enterprises. In the jewellery sector, 15-20% of workers, who are paid daily, have been affected.
Source: The Financial Express