Truck Rentals Drop by More than Half Due to Note Ban
Published On Nov 16, 2016
The demonetization of 500 and 1000 rupee notes had already led to a severe crisis in the cash-dependent trucking industry. And to add to the woes, truck rentals have dropped from 20 to 50 percent on key truck routes across the country over the past few days.
This was confirmed by S P Singh, senior fellow and coordinator of Indian Foundation of Transport Research and Training (IFTRT), who said that truck rentals and utilizations have been affected. He also added that the government’s move to ban the high-value currency notes have worried several industry stakeholders. However, he was optimistic of the long run benefits of this move.
Mr. Singh also said that the purchasing power has been curbed due to last week’s announcement. The public is only spending on necessities and not indulging in luxury goods in order to curtail expenditure. Also, businessmen are unable to buy cargo due to invalid money. Ironically, transport firms are ready to pay 100 percent advance to operators instead of the usual 25 percent to get rid of their old tender notes.
After All India Motor Transport Congress (AIMTC) had forewarned that a major chunk of trucks will be stuck soon because fleet owners did not have ample cash in lower currency denominations for toll charges and fuel, the union roads ministry had waived off the payment of toll charges till November 11 (which was extended till November 14 and subsequently till November 18 midnight).
Despite the suspension of toll charges, around 90 percent of three million trucks plying on Indian roads have been stranded. The vehicles are mostly fuel starved as several rural pockets and smaller cities have refused to adhere to the government’s deadlines and are refusing to accept old 1000 and 500 rupee notes.