Ban on High-Value Notes Takes its Toll on Truck Transport
Published On Nov 15, 2016
The recent demonetization of INR 500 and INR 1000 notes in India has not only hit the common man hard, but has severely affected the trucking industry too. According to fleet operators in the transportation business and logistics firms, more than 90 percent of the three million trucks plying on Indian roads have been stranded for two entire days, seriously threatening the movement and supply of essential commodities across the country.
An industry that engages more than 20 crore people, the transportation sector is currently bearing the brunt of the government’s suspension of higher denomination notes as the old tender notes are not being accepted by fuel outlets, toll plazas, labourers, dhaba owners, and toll plazas. Almost 80 percent of the operational costs in the road transportation industry is managed through liquid money.
Also, the previous withdrawal limit of INR 20,000 per week is hitting transport businesses hard. As per the All India Motor Transport Congress (AIMTC), supply of milk, medicines, vegetables and fruits may face a crunch in the immediate future. The same thought has been reflected by the Delhi Transporters’ Association which said that the road transportation sector largely depends on cash transactions for truckers’ boarding and food, repairs in case of breakdowns and payments to loaders and unloaders.
Sachin Mann, a Noida-based fleet owner, shared his plight with TrucksDekho. “I have around 30 to 40 trucks that run between Delhi/NCR region to cities in the South like Hyderabad, Chennai and Bengaluru. I have to give INR 20,000 in cash to each of my truck driver per day. Due to demonetization, the per week withdrawal limit is very less plus the driver is not able to get change for the new 2000 rupee notes. Now, almost all of my vehicles are lying idle.”
Although the acceptance of obsolete notes in hospitals, petrol pumps, pharmacies, and railway ticket counters was extended from November 11 to November 14, people in smaller cities have not followed the extended deadline and have refused to accept notes of higher denominations.