The demonetisation of ₹500 and ₹1000 notes may have been hailed by the Narendra Modi government, and things started to normalise, but some industries are still reeling under its effects. One of them is the Banarasi sari industry in the Prime Minister's constituency, Varanasi.
Cash-strapped weavers are struggling to make ends meet as prices of raw materials have soared, reports The Hindu. While traders haven't been able to pay sari weavers in cash, the weavers in turn are struggling to pay labourers and even for raw materials making the business come to a halt.
The problem, as The Hindu reports, is because of the disappearing credit system that the weavers have relied on for years. The weavers use a rolling credit system with post-dated bearer cheques exchanged for cash. The cheques are of less than ₹20,000. The weavers either wait to encash it after it matures, or forward it to those who supply raw materials or take the cheques to the batta market to exchange it for cash by paying a commission.
The newspaper reports that after demonetisation many battawallahs have shut shop because they are unable to get cash.
Akhlaq Ahmed, a weaver struggling to pay his dues, told The Hindu, "What will my family eat if I use up the little cash I have managed to get to purchase raw materials."
ANI had reported in November, right after demonetisation was announced, that many small scale industries in Varanasi had been hit hard due to the non-availability of cash.
The report had said Uttar Pradesh's weavers were facing shortage of raw material and non-payment of wages leaving many jobless these days.
The daily turnover of the Banarasi sari industry is estimated to be around Rs 20 crores and in the wake of demonetisation, power loom operators have had to cancel hundreds of orders for saris.
A weaver had told ANI in November that if demonetisation continued, or two more months then most of the people would starve. And that is exactly what is happening now.