Though the withdrawal limit has been increased by the govt, the banks are not complying.

Demonitisation Small scale industries in Coimbatore struggle to pay workers run factoriesImage for representation/ Pixabay.com
news Business Tuesday, November 15, 2016 - 16:41

One can see people standing outside banks for hours to get their old 500 and 1000 rupee notes changed, but that is not all. In Coimbatore, small-scale industries are unable to pay workers or run their factories due to demonetisation.

These small-scale industries are involved in providing spare parts of machinery for textile, defence, and medical purposes.

Speaking to The News Minute, J James, President of Tamil Nadu Cottage and Tiny Entrepreneurs Association said, “Earlier the government had only allowed individuals to withdraw an amount of Rs. 20,000 weekly. The owners have to pay workers on a weekly basis. How will they pay them with just Rs. 20,000?, he asked.

However, though the central government from Tuesday allowed people with current accounts to withdraw Rs 50,000 for industrial purposes, S Ravikumar, President of Coimbatore and Tirpur District Micro and Cottage Industries Association, said that the banks were still not allowing the owners to withdraw the cash.

 “Today, we went to the bank to withdraw Rs. 50,000, they did not allow us to withdraw that much amount and gave us Rs 20,000,” said Ravikumar. 

Moreover, the association said that the banks are providing 2,000 notes. “Where will we go and get the money changed? We have to pay about Rs. 1000 or Rs. 1500 to workers weekly. So, we are unable to pay them,” Ravikumar pointed out.

James added that many workers have stopped working. “Workers have stopped working without wages. Many workers say that they do not have money to buy food or to even fill fuel in their bikes,” he said.

Ravikumar said that one micro industry has about three to thirty people working in one unit and the owners need to pay about Rs 40,000 as wages to the workers and above and beyond that, there are additional charges in the industry.

Moreover, the industries are unable to function. “The owners have to buy spare parts. All those dealings happen in money. The owners already have old 500 and 1000 notes, which have not been exchanged. So, the industries are unable to buy spare parts and function,” said James.

The associations want the central government to quickly introduce new 500 notes and also increase the money that can be withdrawn for industrial purposes.

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