Demonetisation effect: Cash crunch hits transport business hard
Truckers say fleets are stuck for want of money, some operate on credit
Senior citizens queue up outside a bank at Charkop Saturday. Dilip Kagda
The demonetisation exercise has put the trucking business, one of the largest unorganised, cash-based sectors in the country, in great difficulty. Operators say their truck transport business has been badly hit by the demonetisation of Rs 500 and Rs 1,000 notes as they have no new cash even to pay the drivers, while clients are finding it tough to pay them in the new currency.
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“We are worst affected due to demonetisation of Rs 500 and Rs 1,000 currency notes.Yet, never did we call for a strike and not even once tried to hamper flow of essential commodities for the larger public interest,” said Manjinder Singh Dhaliwal, Secretary, Maharashtra Tank and Lorry Owner’s Association.
Echoing the voices of lakhs of transport fleet operators, he said one of the largest unorganised and cash-based sectors of the country was facing immense problems.
Post the demonetisation announcement on November 8, while many decided to look for ways to acquire accepted currency, truck drivers, single operators and many in the business have found themselves at the receiving end. Hardships in getting the money exchanged quickly at fuel pumps or banks has further added to their woes, they said.
“In an effort to let go off their old higher denomination notes, most of our customers and clientele have passed on the abolished notes to us. They threaten us to accept them without which we don’t stand a chance of receiving any revenue from them,” he added.
“The withdrawal limits imposed upon us are too small to cater to middle-sized and large scale operators. How are we supposed to pay cash to drivers who venture out regularly for business related transactions? We are also facing issues with paying our pending installments to banks,” said Shamshuddin Khan, a mid-sized fleet operator.
The operators who use trucks, tanks and lorries for transport of goods and commodities across the nation, have complained against troubles while paying dues of drivers, bank installments and other payments due to cash shortage. With no cash in hand, at least forty percent of their operations has been majorly affected, they said.
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“We are not able to take any new consignments or orders considering we have no cash to give to our drivers. Some of our drivers are stuck following the announcement as there is no new denomination notes available for immediate usage,” said Gurvinder Singh, vice-president, Bombay Goods Transport Association.
With cash shortage in the market, delayed deliveries of products and reduction in number of trucks and tanks they can operate a day are other worries. With each one in their line of business refusing to accept old notes, bigger players in the market have offered to ply on credit till things are settled.
“Even we understand there is shortage of cash. It is inhuman to force many of them, especially single time operators who thrive on a hand to mouth existence to ask for an immediate delivery of dues. With no payment from their side, even we are facing great losses,” said Palvinder Singh, Branch Manager, Shri Ram Transports, a commercial vehicle finance group.
“One has to understand that plastic money penetration in India is minimum. We cannot expect our drivers to indulge in cashless transactions at one go and neither will they understand how to make use of it all of a sudden. The question remains whether each petrol pump, food joint or truck repair centre in interior areas will have facilities for accepting card payments,” added Manjinder.
With each segment in their business demanding transactions in new notes, hoarding them seems to have become an issue. “We appeal to the authorities to reduce unaccounted submission of money at check-nakas, increase withdrawal limits for fleet operators on pro rata basis. Our appeal is to understand the nuances of our problem,” Khan added.
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