Mumbai: A survey conducted by State Bank of India (SBI) among small businesses has revealed that more than two-thirds of them have seen a drop in business. While 30% of respondents said that business has dropped by half, another 23% said that the drop has been between 40-50%.
The main problem identified by most of the respondents was the supply of only Rs 2,000 denomination notes without intervening notes of Rs 500. This has resulted in chaos as there wasn’t enough currency notes to change the Rs 2,000 denomination notes. Interestingly, the survey reveals that 63% of the respondents come out in support of demonetisation.
“Overall the decline in business is less than 50% for the majority of the businesses that were impacted. Construction sector and the informal roadside vendors seem to be the worst hit. Less impact was seen on automobile and chemist shops that already had digital modes of transaction,” SBI said in its Ecowrap report. Within the textile sector, shopkeepers dealing with retail segment have been affected more than those in the wholesale segment. The gems and jewellery sector has also been hit with declining sales.
Payments are moving to electronic mode gradually. The survey showed that 15% of cash-based transactions have moved to digital in weeks ensuing demonetisation.
Source: The Economic Times
