Companies find innovative ways to beat cash blues

COIMBATORE: Companies employing workers in labour-intensive industries such as garments and leather are finding innovative ways to beat cash blues. Firms are trying to ease pay day pain for workers by distributing prepaid cards, tokens and vouchers to purchase essential items at neighbourhood grocery stores and fill fuel at petrol bunks.Tirupur-based Cheetah Garments is among the several export houses in the knitwear town that have tied-up with grocery stores to ensure that workers do not run of essential items. Workers can buy provisions at these stores and submit the bill details to the company. The company would settle the dues in bulk to stores later through banking channels after which it would deduct an equivalent amount from workers’ wages. “We are giving tokens for workers to fill petrol as well,” says V Somu, managing director, Cheetah Garments, which employs about 150 workers. Garment export houses in Tirupur are also issuing prepaid cards for workers who do not have bank accounts. These cards are loaded with up to Rs 10,000 in cash. “We can keep loading an amount equivalent to the wages on these cards,” says Raja M Shanmugham, president, Tirupur Exporters’ Association. A leading textile exporter with units near Tirupur says that banks have promised to provide swipe machines so that they can dispense cash if ATMs go dry. While a large number of workers in Tirupur get wages in their bank accounts, firms also provide cash payments. Migrant workers from north India typically prefer to get their wages in cash and are the worst affected by the demonetisation, say industry officials. There are about 4 lakh workers employed by the garment industry in Tirupur. An average garment unit pays around Rs 30 lakh in wages every week. Some units postponed their weekly payments from Saturday to Wednesday after the demonetisation drive was announced on November 8.“We are giving a company token for workers so that they can buy provisions from stores,” says Rafeeque Ahmed, chairman, Farida Group, a footwear exporter that has manufacturing units near Vellore. “We will settle the grocery stores with cheques. We would debit an equivalent amount from workers’ accounts,” he says.The arrangement is only for workers in sub-urban and rural centres covering five units that employ about 15,000 workers. The tokens are given in denominations of 200, 500 and 1,000 and the Farida Group has tied up with three major stores in the Vellore area. “This is a temporary arrangement as cash availability is very limited,” Ahmed says.