Negative impact on jobs, SMEs due to note ban: Assocham

Demonetisation has negatively affected job creation in the small and medium enterprises (SMEs) in the immediate run, an Assocham's Bizcon survey said on January 23. However, the survey observed that the large and well-organised sectors of the Corporate India stand to benefit in the long run.

With regard to the sectoral impact of demonetisation, the survey listed that a majority of industries feels that agriculture, cement, fertiliser, automobile, textiles and retail will have a "negative impact". Nevertheless, the survey also added that power, oil and gas, pharmaceuticals, IT and electronics and infrastructure will have a positive impact.

A majority of the respondents stated that the SMEs have been hit and would suffer the lingering effect for one more quarter. "At a holistic level, a large number of the respondents felt that the impact could be seen in sales volume declining in the last quarter of the current financial year," the survey added.

Assocham Secretary General D.S. Rawat said, "When the economy is in a state of flux, it is quite a challenge to get the real picture on the ground. Even though our survey does point towards some level of stress, the jury is still out and it would be quite a while before one can say with complete certainty whether or not the currency jerk was good or bad for the economy."

Further, the survey said that easing of prices in vegetables and some other crops is attributed to incidents of distress sale against the backdrop of cash scarcity. Meanwhile, about 92 per cent said that the demonetisation will have a positive impact on inflation.