New Delhi: The end of the month is a period when companies pay out salaries and employees queue up outside banks and ATMs to withdraw money. However, the coming few days are likely to be chaotic as cash is still in short supply, and companies are using innovative ways to help ease the pain of their employees.
Company heads, economists and analysts expect the first week of December to be chaotic as people line up outside banks and cash dispensing machines to withdraw money for paying the monthly bills, buying provisions, family expenses, personal needs, school fees, utility bills etc. Although there were reports of crowds abating the coming days may see a surge because cash is still in short supply.
Companies are trying to find innovative ways to help employees mitigate the pain. The Farida Group is a manufacturer and exporter of footwear and finished leather based in Ambur in Tamil Nadu. Its turnover is Rs. 1,200 Crore per annum and it employs around 20,000 people.
To help its employees tide over the cash shortage the company has tied up with four provision stores in Ambur. Tokens worth Rs 1,000, Rs 500 and Rs 200 will be issued to employees to redeem at the stores. The money will be debited from the salary of the employees and paid into the bank accounts of the stores by the company.
"Even if we transfer money into our employees accounts how will they withdraw cash?" M. Rafeeque Ahmed, Chairman of the Fareeda Group told News18.
"We decided to help out our employees by tying up with stores with the capacity for online payments," he added.
This will at least take care of their monthly provisions like rice, pulses, spices, sugar and tea. Since vegetable vendors are too small the company cannot have a similar arrangement with vendors of fruits and vegetables.
Companies like Paytm, Sodexo and other startups that operate in the cashless transactions space have benefitted immensely from demonetization. People have scrambled to find alternatives to cash. Even Reserve Bank of India Governor Urjit Patel, advised people to use cash substitutes like debit cards and digital wallets, saying it will make transactions cheaper and easier and help India leapfrog into a less cash-use economy.
Upasna Bhardwaj, an economist with Kotak Mahindra Bank, said that the coming days will see significant queues as people try and withdraw cash. But it will also help people move towards digital transactions. “Online transfers and cheque payments have started receiving a big boost as people from all sections look for alternatives,” Bhardwaj told News18.
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