 "Liquidity crunch sours milk economy")
The Centre’s demonetisation move is choking the country’s milk economy.
“The trucking industry operates primarily on cash, and right now there is a dearth of cash in the economy. This has obviously hit the transportation of goods, and milk is one of them,” said Kuldeep Saluja, managing director of Delhi-based Sterling Agro Industries.
He added that there was a problem at the distributor and retailer levels — segments that operate on cash transactions from consumers. Saluja claimed the milk economy was affected by around 50 per cent.
Sandeep Aggrawal, director of SMC Foods, said, “We have made payments to farmers through net banking and cheques. The flush season for milk is expected to begin in another 10 days or so. However, there is a problem at the distributor end, who cater to the retailers, as customers are short of cash.”
This is likely to hit the unorganised sector players more. The All India Motor Transport Congress (AIMTC), an apex body of transporters (cargo and passenger), recently said while the association supported the government initiative, the road transport industry was facing its worst crisis in recent times.
K S Atwal, chairman of AIMTC, said, “The movement of goods and material as well as movement of passenger vehicles and tourists in the country is paralysed and is poised to come to a standstill. The supply of essential supplies such as milk, vegetables, fruit and medicines will get affected with immediate effect.”
Ashok Shah, chairman of V Trans, one of the largest road transport companies, claimed the per-vehicle productivity was down 25-30 per cent. He added that the situation was manageable for big operators who have credit arrangements (for fuel). But smaller operators have been affected. On long-haul routes, operators pay Rs 50,000 in cash to drivers. With the new limit on weekly cash withdrawals, this cash flow has been impacted.
