Saturday , 10 December 2016
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Cash crunch cripples marble industries, transport business

Udaipur : Demonetization and the resulting cash crunch has virtually crippled business in Udaipur. Faced with a liquidity crisis, the majority of marble processing units have cut down their shifts and many more are likely to follow suit. Before the crisis, where on an average 70-80 trucks were transported from Sukher-Udaipur’s marble industrial area, to several parts of the country, hardly 10-15 trucks are being loaded now. Lack of work is forcing the labourers who are mostly from Bihar, Uttar Pradesh and Chhattisgarh  to return homes.

“Marble business has reduced to 50 percent in a fortnight and factories that worked in four shifts have reduced to a single shift these days” says Murlidhar Sharma of Vishwakarma Marbles. The demonetization is not affecting the exporters much, however, the medium and small scale industries are facing the heat. There are more than 200 big and small marble processing units in the area that have been largely affected by the move. Most of the clients coming here for marble purchase are from South India, Maharashtra and Gujarat. The marble industry that was already suffering loss due to the increasing popularity and affordability of Chinese tiles, has now to face  the double whammy. There are not much customers these days and those few who are coming carry 2000 rupees notes which we find hard for rotation in the market, Sharma adds.

“ Marble is a cash commodity and most of the payments are made in cash. Even if we accept cheques from our regular clients, however, the business is still effected because on an average 2-3 lakh rupees is required to pay to the transporter for loading and transportation” says Yogesh Kumavat of Geeta Marbles. Besides marble, other related industry i.e wooden packaging boxes too are suffering. Hundreds of big and small hotels and restaurants in the industrial area too are forced to close down temporarily. Those coming to purchase marble were the prime customers for these dhaba and hotel owners, however, the currency crisis has taken away their lucrative business. Currently, only selected marble units are fully operational which have prior commitments on orders to fulfill.

“We do not have enough cash to pay the labourers who are mainly from Uttar Pradesh, Bihar. They do not have bank accounts. With caps on withdrawal, we are unable to draw required cash from the banks” Vijay Mehta, another businessman said. Processors  do not expect business to get on track in the near future. “ With the present conditions of both banks and public running out of cash, it may take 7-8 months or even more to get business back on track”.

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