New Delhi: Tamil Nadu’s fledgling recovery in 2016 from a deadly deluge in December last year was set back by a few notches by the impact of the surprise currency withdrawal, compounded further by the cyclonic storm Vardah. Most sectors, including MSME, manufacturing and automobile, had been trying to get back on their feet, badly hit by the flooding. It is just not the MSME units at famous industrial estates in Guindy and Ambattur in Chennai, but several IT companies and automobile majors that put up a lacklustre show following demonetisation.
The junking of old currency made things difficult for the banking sector, which had to bear the brunt of public anger due to shortage of funds — mostly at ATMs — which affected banking operations. Public and private banks alike across Tamil Nadu found themselves at the receiving end, waiting for a host of issues to be resolved. “Almost all the counters at banks were dispensing only cash and exchanging the notes. So, the normal transactions got affected,” a bank official said. The Centre’s currency exercise came against the backdrop of checking black money, but the narrative shifted to a push for cashless transactions, which is yet to gain traction in Tamil Nadu.
Automobile companies, a prominent fixture on Tamil Nadu map, felt the ripple effect of demonetisation and the cyclone Vardah. While the notes pullout led to sluggish car sales besides making customers adopt a wait-and-watch approach, the cyclone Vardah forced auto companies’ hand to suspend operations at manufacturing facilities following the trail of devastation. Chennai and its neighbourhood serve as a hub of several auto majors that include US’ Ford, Korea’s Hyundai, German BMW, commercial vehicle manufacturers Ashok Leyland and Daimler.
The cyclone, which made its landfall on December 12, threw normal life out of gear, mainly in Chennai, Kancheepuram and Thiruvallur districts. Power and other communication services remained paralysed for days on end. Federation of Indian Exports Organisation (FIEO) pegged the loss of exports due to Vardah at about INR 300 crore in Tamil Nadu. “In 2015-16, exports from Tamil Nadu were USD 31.25 billion and for April-September 2016, exports were USD 13.27 billion, which shows signs of a negative trend,” said FIEO Regional Chairman A Sathivel.
“FIEO estimates that export from Tamil Nadu will be in the negative zone to the tune of 15-20 per cent due to the impact of last year’s deluge and the cyclone Vardah,” he said.
PTI