Data suggests monthly earnings of workers fell by 17 percent
Jalgaon: Lockdown and health expenses have forced people to withdraw money from their savings.
According to the State of Working 2021 report the monthly earnings of workers fell on an average by 17% during the pandemic. Lack of liquidity is also affecting investments.
Devram Narkhede , who was forced to break his FD and PF said, “There were 4 patients of covid in my family. I tried getting a bed in the government hospital but due to lack of beds, we had to get admission in private one. I even had to take out my provident fund and withdraw from the fixed deposits that was in the name of my child. All this cost me 10 to 12 lakhs. Apart from ICU expenses every day or two I was spending Rs. 6,000 to Rs. 8,000 on each family member.”
According to data from the RBI, demand for physical currency has jumped by 16 percent at the end of March 2021 and would escalate in the coming months. Bankers say that this demand for currency along with the growing use of digital transactions shows that assets are being liquidated.
Gulshan Kumar Singh, manager of customer relations in Axis Branch, Jalgaon, said, “Because of covid, around 10 to 15 customers are visiting us daily for withdrawal of money from their savings accounts and provident funds. They claim health issues and family related issues of covid. Moreover, on an average 20 to 30 percent of people are now visiting our branch for premature withdrawal of FD.”
Economist says usually provident fund withdrawal happens after retirement, but many low-income subscribers have opted for withdrawals.
Venkatramayya, economics professor at Sri Chaitanya college said, “Liquidity crunch is associated with present spending. Because the medicine is urgent so cash is required but cash is not available. Hard cash availability is also affected. The savings have dwindled for most of the people and in future the capital formation would be less. The standard of living would also decline because assets have declined. So EPF balance is a main thing as common people would be adversely affected.”