Note ban hits medicines, goods manufacturing

Ambika Sharma

Tribune News Service

Solan, January 9

The manufacturing sector has been hit adversely after the currency notes of Rs 500 and Rs 1,000 were delegalised on November 8. The units in the industrial area of Baddi-Barotiwala-Nalagarh (BBN) are registering 15 to 40 per cent decline in productivity.

Sources said the steel sector faced the maximum onslaught of demonetisation as availability of raw material, which is cash-dependent, declined abysmally. The production was hit by 30 to 40 per cent.

Manufacturers of consumer product also echoed similar sentiments as their sales have dipped by as much as 50 per cent. Since consumer goods do not figure in the list of essential items, the absence of adequate cash had a bearing on their sales, JS Kang, a consumer goods manufacturer who heads one such unit at Baddi, rued.

As much as 15 to 20 per cent decline in productivity was witnessed in the pharmaceutical industry also as payments have got struck, though the situation is easing out now. About 10 to 20 per cent reduction in the sale of medicines was also visible at the retail level as less cash was available, said SL Singla, former president of Himachal Drug Manufacturers Association.

With the transportation of goods suffering owing to unavailability of sufficient cash, the export oriented units failed to meet their deadlines, thus adversely hitting their business, an exporter from Baddi stated.

The dip in the manufacturing sector will also adversely hit the revenue generation of the Power Department and though it yet to work out the final figures, conservative estimates place the losses at few crores.

The decline in the monthly power bills of steel units is an indication of this fact. As against the usual monthly bill of Rs 1.5 crore, the electricity bill had dipped to Rs 80 lakh to Rs 90 lakh, sources said.

Though the impact of demonitisation was on its way out now, it would have a bearing on the growth of industry in this quarter. Industries was now awaiting the introduction of the Goods and Service Tax (GST)-based uniform tax regime which would ease out the existing problems, SL Singla said.