Improved Cash Flow in India Results in Improved Truck Rentals
Published On Jan 05, 2017
Truck rentals, after being affected by cash crunch in November, have started recovering from the last month. The Indian Foundation of Transport Research and Training (IFTRT) said that truck rentals have picked up majorly because of improved cash flow, improved cargo availability and resumption of toll taxes on national highways.
A statement released by the foundation said, "With toll exemption being stopped with effect from December 2, 2016 and Rs 1.79/litre diesel price hike along with improvement in cargo offering by 10-15 percent, truck rentals have recovered by 18-20 percent in December 2016 from the previous month low of 25-30 percent on trunk routes.”
The demonetization of old INR 1000 and 500 currency notes had brought the transport industry to a stalemate stage. Transporters, fleet owners as well as individual truck owners were complaining about less cash availability.
Many fleet owners had also shared their experience of hardships caused by demonetization. Sachin Mann, a fleet owner based in Noida had, sharing his plight with the TrucksDekho team earlier, had said that he has around 40 trucks in his fleet and each of them requires an average amount of INR 20,000, to be operated for a single day. He was worried as the daily cash withdrawal limit of INR 2000, at that time, was not even equal to what he usually needed to keep the business running.
Same was the case for majority of truck fleet owners active in the country. They were not even able to find people who take trucks on rent on an everyday basis. But truck rentals improving now is definitely a good sign for the economy.
Improvement in truck rentals simply states that cash flow in the country is returning to a normal rate. And once this problem of cash crunch is addressed completely, which is bound to happen in a few more weeks, transport business will return to its full glory. Trucks sales are also expected to sky rocket as soon as people have more cash in hand.