Demonetisation Hits Dharavi’s Famous Leather Market

Big leather manufacturers fear shutdown due to lack of cash

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A month and a half after the demonetisation wave struck India, this Bayside Journal correspondent visited Dharavi, a leather and garments market in Mumbai, to find out about the after-effects of the note-ban on labourers, small businessmen, and garment manufacturers. I was surprised to learn that over 2000 labourers working in bigger leather manufacturing units in the area were either sacked or had to leave their jobs to look for other opportunities. Though demonetisation has affected many large-scale manufacturers, smaller shopkeepers are surprisingly doing well with the use of online payment portals such as Paytm.

Tariq Aziz Ansari
Tariq Aziz Ansari

I met Tariq Aziz Ansari, who has been working as a leather-garment maker for many outlets for the last 11 years. He came to Mumbai at the age of 15 and began working in a Byculla-based garments unit and later in Goregaon. He finally established himself in Dharavi. Ansari is known for making garments and bags for celebrities, including Salman Khan’s mother Sushila Charak, Tiger Shroff, or the costumes for Mohenjo-Daro. Ansari, while chatting with me, said that they weren’t affected by demonetisation and that they still get orders from celebrities such as designer Ana Singh and television actress Kishwar Merchant.

According to him, there are two leather outlets in Dharavi that are well-known for their products and thankfully these are not very badly affected by demonetisaion. However, there are other big companies in Dharavi that make garments and leather products that are unable to pay their daily wage workers.

 

Maqbool Ahemad owns a garments unit in Dharavi for the past 35 years. Ahemad says that prior to the demonetisation, his company’s turnover was Rs 1.5 crores; however after November 8, the business took a turn for the worse and he has been unable to pay his workers ever since. His products were usually exported to Panama and other parts of South America.

Ahemad says, “Pre-demonetisation, I had 15 workers and every worker used to make 20 shirts a day in my workshop. But after demonetisation, I have been facing the issue of shortage of workers. Out of 15 workers, I now have only two. Most of them have left the job because of payment issues. I used to pay an average of Rs 450 to Rs 500 per day to my workers but now I do not have enough cash to make payments.”

He added, “We are getting regular orders from overseas. But I find it difficult to purchase raw materials. With fewer workers and the lack of raw materials, it will be very tough for me to complete the orders. Even though the PM has said that the problem will last only for 50 days, I don’t think it will end soon. I will be forced to shut down my workshop if the situation remains the same for 20 more days.”

Orders are ready but no buyers
A leather manufacturing unit

Mohammad Alam is a manager at Jannat Ara Art, a leather belt–making joint. His job is to get work done by workers based on the orders he receives. Prior to demonetisation, his tiny workshop used to employ 25 workers who used to make at least 90 belts per day in a single shift. But due to cash crunch, 15 workers have been asked to leave because the owner doesn’t have enough money to pay them.

 

Alam said, “The cash crunch has affected us so much that now 10 workers are working in double shifts to complete the work. Since our workshop owner has a good financial backing, we are able to survive this situation. But I too may lose my job if the situation does not improve. Many shops in Dharavi have already shut down. In one month’s time, if things don’t get better for us, we may have to shut shop. ”

Many smaller shops had Paytm stickers on their doors. One such shop owner, Shahid Ansari, 30, explained how demonetisation has not affected him. He said, “Since the new generation will be relying on cashless transactions in the days to come, I am prepared for it. I accept payment in Paytm from many customers. Not only me, but my competitors as well, are using Paytm.”

Bayside Journal found that there were mixed reactions among businessmen in Dharavi’s leather market. Few are happy to go the cashless way, while many others, who relied on traditional payment methods, are not happy with the decision of demonetisation.

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