 "A notice is displayed on the gate of an automated teller machine (ATM) counter which is no longer dispensing cash in Chandigarh (Photo: Reuters)")
The decision of the Centre to cancel the legal tender notes of Rs 500 and Rs 1000 has taken its toll on 90 per cent of traders across India as they are experiencing a decline in their business.
As per a survey conducted by LocalCircles, approximately 16 percent traders across the country are experiencing declining sales, ranging between 60 and 90 percent, including those involved in jewellery, furniture and sanitary business.
Approximately 28 percent traders are experiencing declines up to 30-60 percent. Among these are traders dealing in automobiles, computers, mobile phones, garments, etc.
According to the poll, approximately 46 per cent traders are experiencing decline in sales and these include general stores, prepaid recharge and those trading many other essential use items.
In the survey conducted, around 8000 citizens were requested to visit their local market, speak to traders and small retailers and only then respond to the survey question.
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According to feedback received from citizens, traders and small retailers are struggling for two primary reasons which are cash crunch and removal of black money from the system. Once the cash becomes available in the system most believe that 60-70 per cent of the lost consumer demand and lost sales will come back.
However, the remaining 30-40 percent consumer demand involving purchases in black money are permanently lost.
Hence, their sales and earnings will now be lower in the short as well as medium term.
In a related survey conducted by LocalCircles on consumer spending, approximately 20 per cent consumers plan to spend less in the coming weeks due to uncertainty following demonetisation of the old currency.
Another 30 per cent consumers said they saw themselves spending less in the coming weeks due to the limited availability of cash. Whereas 47 percent consumers said they plan to spend the same as before.
