Demonetisation impact: AIMO report says note ban caused 35% job loss, 50% dip in revenue

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New Delhi | Published: January 9, 2017 12:26:28 PM

As per the study, the industrial sector has been badly affected, with Small and Medium-sized Enterprises (SMEs) sector worst-hit.

All India Manufacturers' Organisation (AIMO) also projected a fall in employment of 60% and loss in revenue of 55% till March 2017. (Reuters)All India Manufacturers’ Organisation (AIMO) also projected a fall in employment of 60% and loss in revenue of 55% till March 2017. (Reuters)

According to a study conducted by India’s largest organisation of manufacturers, micro-small industries segment in India has suffered a 35% loss in jobs and 50% dip in revenue after the first 34 days of demonetisation. All India Manufacturers’ Organisation (AIMO) also projected a fall in employment of 60% and loss in revenue of 55% till March 2017. Over 3 lakh micro, small, medium and large scale industries occupied in manufacturing and export activities are represented by AIMO.

As per the study, the industrial sector has been badly affected, with Small and Medium-sized Enterprises (SMEs) sector worst-hit. A source from AIMO told The Indian Express, “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.”

AIMO has conducted three such studies on the impact of demonetisation that has been circulated among its members. The fourth such study is expected soon.

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According to the latest study, the major findings are:

1. There has been a 35% drop in employment and 45% revenue loss in the medium and large scale industries that are related to infrastructure projects, mostly road construction. There is further chance that the number of jobs and revenue may dip to 40% by March.

2. A loss in jobs of 30% and 40% drop in revenue was reported from the medium and large scale industries, including the foreign firms, which are engaged in export-oriented activities. This fall in job and revenue is expected to rise to 35% and 45% respectively by March.

3. While the least job loss of 5% was reported in the manufacturing sector in the first 34 days, on the other hand, revenue sector dipped 20%. However, this dip is most likely to be 15% for both by March.

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