The textile CEO is not alone in his misery. It was not only the large companies, the currency ban also broke the back of many mid-sized firms as well. The rollout of the GST just made things worse for them.
The currency ban hit Indian companies at a time the economy was just looking up. Some of the companies in retail, consumer products and rural areas were hit so badly that they could not recover for six months.
There are many examples how Corporate India used its network to get rid of its cash. A large indebted company, which had defaulted on giving salaries for four months before demonetisation, gave three months salary in old currency so that the employees can deposit it in their accounts. Another company, which had close ties with private banks, summoned top bank officials in their office to get rid of the old cash.
Many suppliers were happy that they received their payments in advance from their corporate customers. “Earlier, we used to get our payments six-eight months late. But as soon as currency ban was announced, the next day we received all our dues. As the client was a big customer for us. We accepted the cash and deposited the money in our account as it was a legitimate payment for us,” said a supplier to a large retail chain.
According to head of a large infrastructure company, the note ban stalled work in key sites as there was currency shortage. Cement companies reported that after demonetisation all-India volumes declined in the range of 20-25 per cent in November-December 2016, as rural housing grind to a halt.
“All of us would like to forget the demonetisation chapter in our life. We now pin our hopes on the next Budget to compensate us for the losses.