5 southern sectors hammered by demonetisation
- Around 3.5 lakh farmers, as well as 20 lakh workers, are dependent on fish farming which runs on cash in Andhra Pradesh
- The foreign tourists in Kerala are stuck with either old currency note, or they are unable to get money exchange due to rush in the banks.
- The large firms have come up with prepaid cards to help the workers in the larger textile unit in Tamil Nadu.
Another four days and it will be one month since demonetisation of ₹500 and ₹1000 notes. From ATM queues to payday chaos the country has seen on all in the past few days and yet it seems we are far from reaching normalcy in terms of cash.
Here are six prominent sectors of this part of the country that suffered most due to demonetisation:
Andhra Pradesh: Aquaculture especially shrimp producing is one of the major economic activity in the coastal region of this state which has been impacted due to demonetisation.
From medicines to maintenance to lab expenses to labour cost everything is cash based in this sector. Apart from this, for February crop the fish farmers need to buy seeds for which there is not enough cash. For many others, shrimps have to be harvested in another week's time, but again cash is the issue here.
In this state, around 3.5 lakh farmers, as well as 20 lakh workers, are dependent on fish farming which runs on cash. At present, owners are postponing payments or making part payments and labourers are yet to be paid making the situation difficult and causing a dent in the state's economy.
On an average 200 truckloads carrying fish worth approximately ₹10 lakh leave the state and post demonetisation the number has come down to 50 to 60 trucks.
Karnakata: The small and medium enterprises that sustain on cash transactions is the main victim of demonetisation in this state. The workers in this sector are mostly paid on a weekly or daily basis, and since currency ban effected 86% cash in circulation, the impact on this sector is evident in the state.
The owners and workers both in this sector are suffering since cash is the only way in most of the small and medium enterprises. The workers are not getting paid, and the owners are not able to commission new work since there is no cash or limitation in withdrawal.
Kerala: The tourism sector in the state is in shock after the demonetisation. The foreign tourists are stuck with either old currency note, or they are unable to get money exchange due to rush in the banks.
As a result, the local vendors are also suffering, and the state economy that is hugely dependent on tourism is badly affected by the currency ban.
Tamil Nadu: Textile Industry is responsible for massive employment in this state that again runs on cash basis. There are various micro and small units where workers get paid in cash.
The large firms have come up with prepaid cards to help the workers employed in this sector, but there are unorganised units where the digital transaction is not a possibility.
Telengana: In Tollywood, the production houses are not starting any new project as well as many have put a hold on the current under-production ones due to cash crunch.
This industry survives on the hardship of many from behind the screen. Spot boys, extras, various production related workers all are dependent on cash payments.
As a matter of fact, a lot of large transaction also happen through unaccounted for cash, and since demonetisation, this industry is facing a flak.
All these industries are waiting for the cash flow to stabilise before resuming their regular activities. Meanwhile, this will impact the state GDP as well as the national GDP in the longer run.