Concerns over demonetisation of high value currency notes likely to put brakes on the economic growth in next couple of quarters of the current fiscal (FY17) seems to be already in works. There are reports which suggests that small and medium-scale enterprises are already feeling the heat of the current cash crunch situation and may lead to production cuts and massive job losses in days to come.
Not just the SMEs, things are beginning to look shaky for one of the country’s high-employment generating automobile sector as well. Besides consumption which has been driving the country’s growth, automobile industry, too, has contributed significantly to the growth over the past decade or so on the back of improving vehicle sales year on year. However, if things are anything to go by, automobile companies could be in for tough times going ahead as effects of demonetisation could dent overall sales.
Car makers such as Maruti Suzuki, Honda Motor, Hyundai Motor, Mahindra & Mahindra, Renault Nissan and Ford Motor are extending shutdowns from a week to around two weeks this and next month, the Economic Times reportsaid.
