AHMEDABAD/ RAJKOT: A shortage of cash over the last two weeks, has greatly hurt trade, industry and agriculture. Rural areas are the worst affected and farmers are not being paid in full for their produce. This is the season when the rabi crop is being sold and traded at wholesale markets and APMCs.
“With the currency shortage, farmers are not getting dues cleared by
traders. Some are forced to sell their produce at lower prices. Others are getting their dues paid into their bank accounts, but with no cash available in the banks or ATMs in rural areas, how do farmers withdraw money?” said Sagar Rabari, president of Gujarat Khedut Samaj.
The state government has acknowledged that banks are short of cash and has taken appropriate action. “We’ve been in touch with the ministry of finance and the Reserve Bank of India. This is a nationwide issue and it is out of the state government’s purview. We’re trying to address cash shortages in various parts of the state. Last week, we sent cash through the RBI to
North Gujarat and on Tuesday we sent currency to Surat,” said J N Singh, the chief secretary of Gujarat.
“We’ll also be requesting the RBI to send more cash to Saurashtra, he added. On Tuesday, there was a problem at the market yard in Rajkot. Traders are facing a cash crunch due to short supply of currency notes by the Reserve Bank of India. Marketing yard are especially hit as farmers insist on hard cash for their produce.
Atul Kamani, president of the Commission Agents’ Association at the Rajkot market yard, said, “This is the peak season for us. As farmers demand cash payments, we need Rs 15 to 20 crore in cash a day, to buy farm produce. There are 7-8 bank branches at the market yard get about Rs 3 crore or Rs 4 crore. We get Rs 10, 20, 50 and 100 notes, not higher denominations. We are forced to buy on credit and in some cases we issue cheques as well.”
Trade has been significantly affected by the cash shortage. “Small traders and those running smaller units who have to pay wages or make payments in cash on a daily basis, tend to face significant issues when it comes to cash supply,” said Jayendra Tanna, president of
Gujarat Traders Federation (GTF).
The cooperative banks are among the worst hit. Last week, representatives of the Gujarat Urban Cooperative Banks Federation wrote to the central bank, asking it to normalize cash flow. “The situation will only get worse if cash supply is not normalized. If the currency chest does not get enough notes, how are we supposed to manage disbursals,” said Jyotindra Mehta, chairman, GUCBF.
