One year of demonetisation — Wholesale markets: After cheque and digital experiments, cash rules again

While 30 mandis selected under the eNam project have by and large reported higher digital payments, agricultural produce marketing committees are transacting largely in cash.

Written by Parthasarathi Biswas | Pune | Published: November 8, 2017 1:08 am
demonetisation, narendra modi, modi note ban, Black money, arun jaitley, GST, GST  effect, wholesale grains market, Wholesale markets, arun jatiley, digital economy, digital financial transactions, cashless economy, one year of demonetisation Maharashtra’s 300 wholesale markets, with an estimated turnover of Rs 1 lakh crore, have historically been driven by cash. (File Photo)

Wholesale markets are back to cash, farmers and traders say, citing poor Internet connectivity for digital transactions, and alleged delays in clearance of cheques. While 30 mandis selected under the eNam project have by and large reported higher digital payments, agricultural produce marketing committees are transacting largely in cash.

Maharashtra’s 300 wholesale markets, with an estimated turnover of Rs 1 lakh crore, have historically been driven by cash. Demonetisation left traders short of cash to pay farmers; many markets shut for weeks. During a shutdown of mandis in Nashik, the district administration asked traders to pay by cheque or other means such as Real Time Gross Settlement (RTGS). There was talk of setting up dedicated public sector bank branches in the major mandis, and better digital payment facilities. Neither move materialised.

Jagdish Apshunde, director at Nashik’s wholesale market, said barely 10% of daily payment is done through digital platforms. He had been one of the first traders to opt for non-cash transactions in the market.

Sohanlal Bhandari, director of Pimpalgaon market, said it moved back to cash following demands by farmers. “Most of the farmers have accounts with Nashik District Cooperative Bank. Due to its precarious financial health, the bank is unable to pay in cash, so it was decided to pay the farmers in cash. In many cases, remote bank branches present problems for payment through RTGS.” Neither Nashik nor Pimpalgaon has a dedicated bank branch.

Santosh Gorade, an onion and grape grower of Niphad taluka in Nashik, alleged there have been many instances of cheques being dishonoured. “Traders are reluctant to go for RTGS,” he said.

In terminal markets such as Vashi and Pune, much of the trade happens among traders, yet digital payments are few. Rajendra Shelke, president of an association of onion and potato traders and commission agents, said, “We deal with a large number of customers. It is not possible to deal either in cheque or RTGs with them.” Dilip Khaire, president of the board of administrators in Pune market, said other than pomegranates, most commodities are cash-only.

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