The cash crunch triggered by the sudden withdrawal of high-value currency notes has crippled the economy of Tirupur that depends on thousands of labourers who earn their wages in cash. So much so that the year-end that is normally a cheerful time in Tirupur when holiday orders pour in from the US and Europe is now in a gloom.
As M P Muthurathinam, Owner of Rooban Clothing says he is currently working with 10 workers of the 90 he deploys. This is because the rest of the workforce have either gone on leave or have left jobs due to the cash crunch. Muthurathinam is not able to pay them.
His main worry now is that his clients may cancel a chunk of his export orders since he won’t be able to deliver the goods on time. Generally, November and December are happy months as good business orders flow materialise due to the Christmas and New Year season abroad.
The textiles cluster of Tirupur employs some 500,000 people directly and does an annual business worth Rs 40,000 crore. While Rs 25,000 crore comes from exports, the rest comes from the domestic business. The textiles belt, often referred to as the Manchester of south India, has remained to be crippled over the past 15 days and its impact will be felt for at least three to four quarters, factory owners and their association believe disputing claims that the pain will be short-lived.
