Facing a cash crunch in the wake of demonetisation, handicraft exporters have urged the government to increase immediately the cash withdrawal limit to Rs 5 lakh from the existing Rs 50,000 per week.
"Situation is not good. Workers are not coming for work. It will severely impact our production and export orders. We have requested the government to immediately take remedial measures," Export Promotion Council for Handicrafts (EPCH) Vice Chairman Rajesh Jain said.
He said the cash withdrawal limit should be increased to Rs 5 lakh per week depending upon the scale and size of the business organisation.
The handicraft industry is an important employment generating sector and it provides livelihood to about 70 lakh persons across the country.
"Handicrafts are predominantly produced at the village and cottage level and mostly by artisans, craftspersons, especially women folk and weaker sections of the society. They take cash and we are not able to pay them," he added.
Citing example of exporters dealing in wood, Jain said wooden logs are required every day and at present they are being auctioned at mandi on cash basis.
"They should accept credit/debit cards for payments. Portable ATMs can also be used to ease the cash withdrawal problem," he added.
To help small traders meet their business requirements, the government had last week increased the cash withdrawal limit to Rs 50,000 per week.
"Considering the cash availability, for the business entity having current account for past three months, the limit has been increased to Rs 50,000 per week to pay wages and meet sundry expenses," Economic Affairs Secretary Shaktikanta Das had said.
The government on November 8 announced the demonetisation of Rs 1,000/500 notes to flush out black money. The sudden move led to people thronging banks and ATMs to deposit and exchange old notes, leading to chaos and serpentine queues at branches and impacting business operations across the country.
In October, handicraft exports grew by 3.45 per cent to USD 149.5 million.
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