Demonetisation Led to 35% Job Losses, 50% Dip in Revenue: Study

New Delhi: The currency ban move by Prime Minister Narendra Modi on November 8, 2016 has caused 35 percent job losses and 50 percent decline in revenue of micro-small scale industries, an Indian Express report quoting the All India Manufacturers’ Organisation (AIMO) said on Monday.

The job losses and revenue dip was estimated in the first 34 days of demonetisation decision, the report added.

"While AIMO understands certain immediate repercussions of such a bold step (demonetisation) by the government, it did not anticipate or was prepared for such a jolt to industries even after one month," the newspaper quoted AIMO study as saying.

The AIMO stated that Small and Medium-sized Enterprises (SMEs) sector was the worst-hit due to note ban move.

According to the report, the AIMO’s current study was the third in a series of four studies.

Some of the major findings of the AIMO study state that medium and large scale industries engaged in infrastructure projects, like as big road construction projects, reported a 35 percent job losses and 45 per cent in revenue loss.

It also said that the number of jobs and revenue are expected to further dip by 40 per cent by March this year.

The factors that contributed to job loss and revenue dip include zero cash inflow, restriction on cash withdrawals, absent staff among others, the newspaper report further said.

The studies were conducted by an expert committee set up by the organization, K E Raghunathan, national president, AIMO was quoted as saying by the news report.

Though Raghunathan refused to give details of the committee, but said that it included industrialists, SMEs and export sector experts, chartered accountants, consultants and lawyers, said the report.

“They turned a blind eye towards this emergency situation. They simply closed their ears, kept patting themselves or their bosses. Among all the states, Maharashtra and Tamil Nadu are the worst affected. The impact in these two states is still being ignored, thanks to an inefficient government in Tamil Nadu and a Maharashtra government that is bound to support the demonetisation drive,” Raghunathan responded to the government’s approach on the issue.