SALAHUDDIN, 60,
FORMER FOOTWEAR FACTORY OWNER IN AGRA
His factory, SR Shoes,
manufactured 700-800 pairs of shoes every day and employed 70-80 people who were paid a weekly wage every Saturday. He also sent consignments of shoes worth several lakhs outside Agra and would receive payment within a month or two. Demonetisation and then GST dealt hammer blows to his business. The first made it impossible for him to conduct transactions with other businesses and workers for some months; his own payments from outside did not arrive in time, as most of the business was conducted in cash. Then, when GST was implemented, Salahuddin was unable to do business with his unregistered suppliers. To settle his loans, he first had to dispose off his stock for whatever money he could get. Later, he had to sell off his factory. Seeing the business shut down, his clients outside Agra also defaulted on payments, forcing Salahuddin to find alternative employment as the owner of small garments shop. So ashamed is he of the turn in his fortunes that Salahuddin refuses to be seen at the shop himself; instead he has entrusted his sons to run it. He himself is trying to recover the money he had loaned to people.
Agra, he says, is known as the footwear hub of India but most business transacted in the city is on informal credit notes. It is this informal cash-based system that demonetisation and GST destroyed. Used to running businesses like this for ages, expecting traders in Agra to switch to a formal, computerised system is difficult. This is why business in the city has slumped to less than 40 per cent of what the transaction rate was before demonetisation and GST.