As a consequence of demonatisation of high value currency by the Government, the commercial markets over the Country wore a gloomy and deserted look. Post November 8 both retail as well wholesale trade has been affected severely, said traders body Confederation of All India Traders (CAIT).
The trade in the markets across the Country has reduced to 25 per cent in comparison to normal days, CAIT said. It is estimated that Indian retail trade is of about 42 lakh crores of rupees annually resulting to approximately Rs 14 thousand crore per day out of which about 40 per cent trade is conducted through Business to Business (B2B) whereas rest of the 60 per cent trade is conducted through Business to Consumer (B2C) activities. The 60 per cent of the total retail trade is conducted in urban areas whereas rest of 40 per cent is conducted in rural areas.
“Rural retailers from Taluka and other Moffusil areas who generally visit nearby District markets for procurement of goods had to remain at their respective places for want of sufficient funds of acceptable denomination. APMC and Mandis across the Country had a very less business as farmers who had brought their produce for sale in the market have to face a nightmare when he could not get money against his saleable produce due to non-availability of smaller denomination of notes. The logistic sector came to standstill as the truck drivers had only high denomination notes which caused blocks in smooth movement of transportation, CAIT said in a press release.
Demonetization has also prompted the usage of digital mode of payments in the Country as people having debit/credit cards and different mobile applications of Banks, Financial Institutions and technology providers, have started using these modes in making payments for their day to day expenses. Many people who were earlier not using digital payments have also downloaded various applications on their mobiles to make payments.
To encourage widespread usage of digital payments, CAIT has suggested the Finance Minister that transaction cost being charged by the Banks on usage of debit and credit cards is major deterrent in use of card payments and therefore it must be subsidized by the Government and the Banks may be advised not to charge any transaction cost.