Rs 2,000 note withdrawal might disturb business, but not much: Traders

Commodity and agriculture traders, who continue to deal in cash — particularly when post-harvest trading season is on — feel that the sudden decision to withdraw Rs 2,000 note as legal tender might disturb their business, though, unlike the last time, the window of four months is big enough to return the notes.

Usually, in mandis, though the government has allowed cash payment of up to Rs 200,000 to farmers in most cases, the volume of transactions during peak season is much more.

“In central India mandis, an average trader does a business of Rs 10-15 lakh a day during peak season, much of which is still in cash.

The sudden decision to withdraw the Rs 2,000 note will disturb the flow and trade. The good part is that unlike last time, there is time to return the notes, but the cap on the return is too low,” Suresh Agarwal, president, All India Dal Mills Association, told Business Standard.

He said some disruption was expected, particularly at a time when buying of major rabi crops such as wheat, chana and mustard was on in northern India.

In 2016, when Rs 500 and Rs 1,000 notes were demonetised, agriculture trade was badly hit, as most of the businesses in the mandis were in hard cash.

However, a situation similar to 2016 is ruled out as some portion of the transactions has moved digitally and moreover, the circulation of Rs 2,000 notes was already low and going down in the last few years.