Agra (Uttar Pradesh) [India], Dec.17 : The leather industry in city has been hit hard by the government's sudden withdrawal of high-value currency with labourers not getting their wages and manufacturers having no money to buy raw material.
Prime Minister Narendra Modi dropped a bombshell on November 8 by abolishing Rs. 500 and Rs. 1,000 currency notes that accounted for 86 per cent of cash in circulation. Agra accounts for nearly 30 per cent production of leather shoes in India and employs some hundreds of thousands of people directly and indirectly.
The majority of the manufacturing units are small or medium-sized enterprises (SMEs) and, with their coffers running dry, there is little work available for labourers.
"Demonetisation has badly affected us. We are not able to get money and same is the case with the owners. That's why there is no work in the market," said a labourer, Dinesh Chand. Compounding the problems of labourers is the fact that most of them have no bank accounts and depend on the daily or weekly wages handed out by their employers to meet their needs.
With no savings to fall back on, the labourers are staring at an uncertain future. The industry has also seen a slump in demand with cash starved consumers saving money for essential expenses.
"We are not able to pay the labourers as they are not ready to accept cheques and those who are accepting, are not able to get money for five or six days.
Rather than coming to work, workers are standing in bank queues," said a manufacturer, Sharik Anis. The move was aimed at cracking down on the shadow economy but has brought India's cash economy to a virtual standstill.
The government's sudden move has caused a huge disruption to daily life, leaving people struggling to pay for basic goods like food and fuel.
The move to demonetise the large bills is designed to bring billions of dollars' worth of cash in unaccounted wealth into the mainstream economy, as well as dent the finances of Islamist militants who target India and are suspected of using fake 500 rupee notes to fund operations.