affect of demonetisation on transport

New Delhi: Kultaran Singh Atwal, a transporter, owns seven trucks. Now, he says, he is forced to keep five of his fleet idle due to demonetisation, as he has been deprived of the minimum Rs 20,000 cash per truck per trip that he requires as running expenses.Atwal is not an exception. There are many like him. With the government’s curbs on withdrawal of money and exchange of old Rs 500 and Rs 1,000 notes, the motor transport business is suffering, since 80 per cent of the business is cash-based.

The All India Motor Transport Congress (AIMTC) — a representative body for 9.3 million truckers, and more than five million bus operators, tourist taxis and maxi cabs — says 70 percent of the vehicles of their members are already off the roads.The association warns that if the situation is allowed to persist not only the supplies of essential commodities like milk, fruits, vegetables and medicines will get increasingly affected but it will also cripple the lives of 200 million people directly or indirectly dependent on this industry.What is happening in the process is the supply chain has been hit. “Movement of products is slowing down. Supplies of essential commodities like food, pulses or any export consignment is either getting slow or even coming to a halt in some places.”

What the truckers association has sought to drive home is that this industry contributed 4.8 per cent to the country’s gross domestic product in 2015-16, which amounted to Rs 544,800 crore. This is a little over Rs 1,492 crore daily.With 80 per cent of the transactions in cash, Rs 1,194 crore is what the industry needs daily to sustain operations — the bulk of which is just not available today.

The fortunes of truckers is also linked to that of the trading business in India, which is facing its own set of woes. With bulk purchases in mandis almost drying up, delivery of products also becomes redundant.”The lack of cash flow in the markets is equally affecting us traders and the transport sector as well, since both these businesses totally function on cash,” said Praveen Khandelwal, Secretary General of the Confederation of All India Traders.

“Our businesses have seen an overall drop of 75 per cent due to the demonetisation. There is a lack of money flow in the markets,” Khandelwal told IANS. “After demonetisation, around 60 per cent of freight is not in movement,” added Naveen Gupta, the association’s Secretary General.Gupta said there is also a sharp drop in long-haul movement because, apart from diesel and tolls, all the other expenses, like the daily expenses of drivers, local taxes are also paid in cash.