Demonetisation tests the mettle of Moradabad’s brassware-makers

The country’s very own peetal nagri (city of brass), Moradabad, has been beaten all out of shape as a result of the demonetisation of high-value currency notes. The government’s move has shrunk demand, inflated raw-material prices, delayed pay handouts and led to large-scale retrenchment in the brassware industry.

Brass factory owners whom BusinessLine spoke to said the demand for brassware has halved since November 8, when ₹500 and ₹1,000 notes were withdrawn.

Artisans and labour working for the factories complain that earnings have shrunk to less than half; worse, many people have lost their jobs.

“My business has reduced by more than half. My buyers in Mumbai and Bengaluru are not able to sell the items because of the cash crunch and have therefore slashed their orders. The payments from exports to Qatar are coming into the company’s bank account, but withdrawing the money is a big challenge,” says Asif Iqbal, a domestic supplier and exporter.

The brassware industry in Moradabad has an estimated turnover of ₹8,000 crore per annum — of which ₹6,000 crore comes from exports — and employs 3-4 lakh workers and artisans. Iqbal had to let go of six of his eight artisans as there wasn’t enough work or cash following the government’s decision to demonetise.

His unit, Decent Collections, in the Lal Masjid area of the city, shares its fate with hundreds of others. The locality, once bustling with activity, now wears a deserted look, with several units shuttered, even at noon. Mohammad Aslam of Sonakpur village, soldering brass handles in his tiny workshop close to the Masjid, stops his work and peers through his glasses when asked about the effect of demonetisation on his work.

“My work has reduced to 25 per cent,” Aslam says ruefully, adding that before demonetisation, orders from just four-five factories would fetch him about ₹300 daily. “I now earn less than ₹100,” Aslam says with an air of resignation.

There are others such as Ismail Kasim and Nafis Khaleef, who haven’t received any orders in the past month. “Most factories have shut shop. There is just no work for us. Note bandi has finished off our livelihood, and if normalcy is not restored soon, we will have to start pulling rickshaws or do some other low-skill work,” says Kasim.

Spiralling prices of raw materials such as aluminium and copper sheets have made things worse for the brassware industry. “Demonetisation has affected the production of the raw materials obtained from scrap as it is totally cash-driven, and prices have risen by about 20 per cent,” says Javed Akhtar, owner of a factory in Lal Masjid.

Work has reduced to less than a third and orders are getting cancelled, he complains.

Rising raw material prices are affecting the bottomline of exporters, too, as foreign buyers are not ready to accept higher prices, points out Satyapal of Globe Exports, who is also the spokesperson for the Moradabad Handicrafts Exporters Association.

He adds that while many of the 1,200 export houses in Moradabad district were paying workers and suppliers through cheques, the artisans working for the suppliers were not getting paid as they did not have bank accounts.

“This is a serious problem as it is time for us to send samples to international fairs scheduled for early next year, and if artisans are not paid, the samples will not be ready,” says a worried Satyapal.

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