Business activity in the bustling markets of Old Delhi has slowed down as a fallout of the demonetization that continues to hurt the local traders even after two long weeks.
While malls and big showrooms are said to have picked up business after the initial slump, small and medium level traders in local markets are still facing 50-90 per cent dip in their business.
The reason — these traders have not yet adopted the modern practice of transaction, the online payment facilities.
Most of these traders in Chandni Chowk and surrounding markets do not have online payment facility, which drives customers away, said Chandni Chowk Sarv Vyapar Mandal’s General Secretary Sanjay Bhargava.
“Despite strong competition from malls and e-commerce portals, these local traders so far had managed to retain and grow their customer base,” Bhargava said.
“However, ever since the note ban, customers are avoiding shopping at the local markets because they have insufficient cash. And local traders lack online payment facility,” said Bhargava.
Pankaj Manocha from Chawri Bazaar, a wholesale trader in paper who traditionally deals in cash-based transaction, said the paper mills stopped the supply of paper as the demand in the retail shops had gone down.
“Neither customers have cash to buy paper products from us nor we have enough cash to place new orders with the mills,” Manocha said.
New ways of payment have to be devised in order to thrive in the business, Manocha said.
Some traders have started using e-wallets to attract customers but their number is insignificant.
According to the traders, the clothing business is the worst hit by the demonetization, despite November being the wedding season.
A wholesale trader said that the demonetization of Rs 500 and Rs 1,000 currency notes on November 8 affected the traditional business transaction style.
“Earlier, transactions with factories, main distributors, even with customers were carried out using cash, which would be without bill, thus without payment of tax.”
“However, we have to make payment online or in cheques now, which is making the goods costlier. It has hampered our business. We will have to see how things turn,” said the trader, requesting anonymity.
Some traders felt that the situation would be normalised, perhaps in another six months, once they started using different modes of payment.
General Secretary of Delhi Hindustani Mercantile Association, Mukesh Sachadeva said: “The current slowdown is due to cash crunch. Since footfall has gone down, the supply from factories and mills has reduced.”
“Now, we are adapting to the changes. We expect that all traders will start using cheques in six months’ time.”