SMEs in Kashmir bemoan demonetisaion

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SME Times News Bureau | 22 Nov, 2016
Mohiuddin Hakim, 60, has been in the wholesale grocery goods family business for over 30 years. He has never been hit so hard by a cash crunch all these years.

"It looks like I have lost all my business while my stocks and bank accounts are still intact.

"It is like going bankrupt without losing a penny," he said while turning back a few retailers who used to take goods on credit from him and would clear their accounts at month-end.

"I have been getting stocks of edible oil, spices, tea, pulses and more from outside the state. I enjoyed some credit from my suppliers on a monthly basis. Our accounts with debtors and creditors are squared every month," Mohiuddin told IANS, pointing to the stocks piled up in his godown.

"This means we get paid from debtors and pay creditors regularly. The small retail traders who take goods from me do not have surplus cash in their bank accounts. They sell goods, earn their profit and pay me. Today they are not accepting high value old currency notes from customers and their sales have almost hit the bottom.

"I do not accept withdrawn currency notes from them because my bank has refused to accept these notes as deposits even into loan accounts now," he added.

The average weekly receipts had been around Rs 5 lakh and ever since demonetization was announced, this wholesaler says he has recovered only Rs 50,000 last week and that too in withdrawn high value currency n otes.

The announcement that businessmen can withdraw up to Rs.50000 cash on a weekly basis does not seem to enthuse Mohiuddin.

"And what do I do with those Rs.50000? Pay whom? Pay my suppliers who have to be paid around Rs 5 lakh each week?

"Unless my debtors who are small time retailers are able to pay me so that I replenish my bank accounts to afford e-banking, I am sunk", he said.

For small and medium turnout businesses whether in retail or wholesale, the s tory seems to be the same.

In summer capital Srinagar even roadside tea-stall owners now refuse to accept withdrawn high currency notes.

Some local restaurants, however, still accept Rs 500 and Rs 1,000 currency notes provided they don't have to return any change.