Note ban has negative impact on jobs, SMEs: Assocham survey

Power, oil and gas, pharmaceuticals, IT and electronics, infrastructure will have a positive impact

Demonetisation has negatively impacted job creation by hurting small and medium enterprises (SMEs) in the immediate run, an Assocham survey today said.

However, the large and well-organised sectors of the Corporate India stand to benefit in the long run, Assocham's Bizcon Survey said.

"Demonetisation of high value currency notes would leave quite a negative impact on SMEs, rural consumption and job creation in the immediate run," it said.

With regard to the sectoral impact of demonetisation, it said a majority of industry feels that agriculture, cement, fertiliser, automobile, textiles and retail will have "negative impact".

However, power, oil and gas, pharmaceuticals, IT and electronics and infrastructure will have a positive impact, they survey added.

A majority of the respondents stated that the SMEs have been hit and would still 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," it added.

It said the same holds good for the orderbook position with investment graph not showing much of an uptick for the January-March quarter.

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