The world’s largest electronics contract manufacturer Foxconn has sent nearly one fourth of its factory workers in Maharashtra on paid leave for two weeks after demonetisation saw sales slump almost 50%, Economic Times reported. The mobile phone industry has taken a hit after the Rs 500 and Rs 1,000 notes were scrapped on November 8 as the majority of phones bought are under Rs 5,000 and through cash payment, the report said.
Foxconn makes devices for companies such as Nokia, Xiaomi, Oppo and Gionee among others. An industry executive told the business daily that the company has put about 1,700 of its workforce of 8,000 on the bench or on forced leave. Its production has come down drastically from 2.5 million to 1.2 million units per month, the executive said. While Karbonn is reportedly contemplating laying off 1,200 to 2,000 people, Lava and Intex had asked over 5,000 workers not to come to the factory for one week.
In a boost to Modi’s pet project Make In India, Taiwan’s Foxconn had signed a deal in August 2015 with Maharashtra to invest $5 billion (over Rs 35,000 crore) to set up a mobile phone manufacturing unit in the state.
In a surprise announcement on November 8, Prime Minister Narendra Modi had declared Rs 500 and Rs 1,000 currency notes would no longer be legal tender. He stated the move was taken to tackle black money, corruption and counterfeit issues in the country. Since demonetisation, the Modi government has been trying to promote the idea of cashless economy by encouraging everyone to take up digital payment options. Infosys co-founder and former Unique Identification Authority of India chairman Nandan Nilekani has been brought in by the Centre to map out India’s digital payments drive.