Hit hard by Demonetisation, Odsiha's Pipili applique industry on recovery path

BHUBANESWAR: They saw the slump, coped with it and are now trying to recover from its jolt.
The world-famous applique workers of Pipili are trying to come to terms with Narendra Modi Government’s demonetisation move which, exactly a year back, shook the country.
The business went down drastically and has slowly, but steadily, gone up. “Business has recovered but barely about 60 per cent by now. We are hopeful since there is still some time to go before the financial year closes,” says Benudhar Mohapatra, president of Pipili Applique Cooperative Society.

There are 51 members of the society. During 2014-15, it made a business worth about `15 lakh which dropped to `12 lakh next year. From last November till now, the society has reached the `10 lakh mark.
Mohapatra, who is the proprietor of Subham, says the demonetisation brought in financial discipline and the members started to use new ways of transaction through use of point of sale machines, Paytm and JioMoney. However, it is the currencies of higher denomination which affected business because the circulation took time to be normal.

What though has really affected them is use of digital payments through third party services which have eaten into the profit margins of the applique workers and retailers.
Every swipe meant a two percent deduction which went from the pockets of the society members. “The Centre had said no additional charges would be levied but we have to part from our meagre profit margin as a levy for using these third party services,” Mohapatra says.
The applique industry comprises a long chain of employment and payments have to be made at each point. A dip in business affected the entire chain.

While demonetisation was a shocker, the GST has added to their worry. The society is wary of a 12 per cent levy it may have to pay but there is no clarity on it yet.
However, what has already started pinching is the 5 per cent tax levy on raw materials like fabric. “We have not, so far, passed it on to the customers because it may affect business but the cost components have gone up,” Mohapatra says. The society, though, is optimistic that business may shape up well in the coming months so that Pipili can put the bad memories of demonetisation behind.