Seated in front of his shop in Sangrur, which displays colourful Punjabi juttis (footwear), Upvinder Taneja, who doubles as part-time journalist, points to the Paytm sticker on his store window.

It’s a commercial concession to the harsh realities of a strident, government-initiated campaign for a cashless society. But in small towns like Sangur, neither the enticing colours of the juttis nor the convenience promised by Paytm attract customers.

“It’s been more than a month since I registered on Paytm, but who’s going to use it here?” Taneja said. “In over a month, I’ve received only about ₹2,000-3,000 through Paytm.”

Before November 8, when the demonetisation of high-denomination currency took effect, Taneja made daily sales of ₹2,000-3,000, almost all of it in cash. Today, that has dropped by half to ₹1,000-1,500 a day.

Double whammy

His business has been impacted on several fronts: input costs, including on leather, lotions and glue, have increased; and his labourers left for home to help families cope with the rigours of demonetisation.

Overseeing the manufacturing process, which involves painstaking handiwork, Taneja says the price of a bottle of lotion has gone up from about ₹700 to ₹800. But given the slowdown in the footwear market, there is little scope for him to increase retail prices of the finished product.

“Footfall in my shop has already dwindled. Who will buy my products if I reaise prices? There are many other shops in the vicinity, competition is high and demand is low,” Taneja says.

A number of his workers were forced to leave immediately after demonetisation took effect as payment of their wages was getting delayed, and they had to resolve money problems back home as well. Some of them have since returned to work.

Hosiers out in the cold

Hosiery manufacturers in Punjab have a similar story of woe to narrate. October to December is typically the peak season, but this year, demonetisation triggered an exodus of labour force and a slump in demand.

Om Prakash Jain, owner of Sanya Creation in Ludhiana, said about 60 per cent of the workers left in early November, and some more left later.

“We are now left with just about 15-20 per cent of the labour,” he said, adding that the situation is much the same for all the manufacturers in the city, which is a hosiery hub, with an estimated 12,000 units.

Jain says his business has dipped over 15 per cent. “Traders are asking wholesalers not to send goods because their existing stocks were not being picked up, owing to the cash crunch faced by consumers,” he said.

With winter on its way out, the peak demand season for hosiery makers is over, but manufacturers have little to show for it.