Demonetisation hits traders; almost 90 per cent witness decline in business

New Delhi: 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 traders across India as they are experiencing a decline in their business ranging from 0-90 per cent.

As per a survey conducted by LocalCircles, approximately 16 per cent traders across the country are experiencing sales declines in the range of 60-90 per cent, which includes jewelers, furniture, sanitary-ware and traders dealing in other discretionary items.

Approximately 28 per cent traders are experiencing declines of 30-60 per cent and those in this category include traders of automobile, computers, mobile phones, garments, etc.

According to the poll, approximately 46 per cent traders are experiencing sales declines in the range of 0-30 per cent 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.

According to the poll, 46 per cent traders are experiencing sales declines in the range of 0-30 per cent and these include general stores, prepaid recharge and those trading many other essential use items.

Per feedback 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 per cent consumer demand which were the purchases from 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 post demonetisation of the old currency.

Another 30 per cent consumers say they see themselves spending less in the coming weeks due to the limited availability of cash. 47 per cent consumers said they plan to spend the same as pre demonetisation.