Cash Crunch Still Hits Business In Bengal


Kolkata: Cash supply might have improved marginally and queues might have shortened a bit in front of banks and ATMs, but economic activity at the retail level is still far from normal after the passage of a month since demonetisation took effect from November 8 midnight.

Retailers and kirana stores have complained of declining sales and the situation has only worsened instead of becoming better with no clue yet when it will be business as usual.

While the impact has been particularly harsh on street vendors, small retailers, where cash is the sole mode of transaction, too felt the heat. Most of them complained that their daily turnover has shrunk by a third. However, the situation is a tad better for those who are into the business of essential products.

In Bengal, sectors like jute, tea and leather — that make a significant contribution to state GDP — have been affected a lot. Indian Jute Mills Association had apprised the problem owing to low cash flow to the state, Labour minister Molay Ghatak said.

Wage payment settlement took an ugly turn leading to suspension of work in jute mills.

The impact has been no less on the leather industry which has complained of 35-40 per cent decline and cancellation of export orders. “Production is already lower by 40 per cent due to lack of workers and inability to pay wages,” Council of Leather Exports Chairman Ramesh Juneja said.