Over five lakh workers employed in readymade garment units in and around Tirupur have not been paid wages, following the demonetisation initiative. Another two lakh workers employed in small and medium spinning and weaving mills have also got impacted due to the cash crunch.

Most of these workers do not have a savings bank account and 70 per cent are migrant workers from the North and Northeastern India. There are over 5,00,000 workers employed in more than 1,200 knitwear or garment units in and around Tirupur and they get paid an average weekly wage of around Rs 3000.

Not only workers, owners too have suffered. While could not pay weekly wages to workers on time, they themselves could not mop up the necessary funds from their buyers who too were hit hard by the decision.

There was a 15 to 20 per cent decline in the offtake of yarn from spinning mills in the last few days due to the cash crunch. Most of the buyers pay cash to get their stocks delivered. The move has impacted the mills in a number of ways, including payment of logistics costs, workers’ wages, cotton purchase and other daily cash-based activities.