Exporters meet Sitharaman, seek 10-fold hike in withdrawal limit
Aamir H Kaki
In order to cope with the cash crunch, exporters from various industries on Monday asked the Commerce and Industries Minister Nirmala Sitharaman to make a 10-fold hike in the weekly cash withdrawal limit of Rs.50,000 to be able to carry out certain business transactions, after the demonetisation of the old 500 and 1000 rupee notes.
After her meeting with several export promotion councils, Commerce and Industry Minister Nirmala Sitharaman said, “The work in labour-intensive industries such as handloom and carpet, is dependent mainly on cash. Their demand is to raise the current limit of weekly withdrawal to Rs.3-4 lakh or even Rs.5 lakh.”
On the given isssue, Raghunath Singh Rana, Chairman, Sports Goods Promotion Council (SGEPC), told The Dollar Business, “The limit to withdraw Rs.50,000 a week is quite low. It should be at least Rs.2-3 lakh per week. In a month, Rs.10-12 lakhs would be required to conduct certain transactions.”
“In a labour-intensive industry and unorganised sector, the weekly withdrawal has to be around Rs.4 lakh to meet business transactions such as payment for raw materials, labour, etc,” he said.
Exporters in some specific sectors said that the low limit of cash withdrawal has forced them to shut down their units for a week while several of them reduced their production by around 35-40%.
The demonetisation move of the government has raised fears that exports from the country, which recorded an increase in just three of the last 23 months, could again slip if the cash liquidity is choked. It is the small and medium enterprises (SMEs) segments, which mainly deal in cash, are the worried lot.
The Minister assured the exporters that she would take up this issue with the Finance Minister Arun Jaitley.
“We have assured them that we will take very quick and well-compiled report to the finance ministry so that quick remedial solutions are offered. We will pitch for them and I am sure that the finance ministry will give us a sympathetic hearing,” Sitharaman said.
“The exporters spoke about the difficulties they are facing in the short-term. A majority of them said that a part of their activities such as raw material procurement is done to a large extent in cash,” she added.
While welcoming the move to check the black money in the country, the exporters said that transport sector has been affected as the payments are mostly done in cash and the movement of cargo has been hit.
It is high time the government understood that India's exports and exporters need a major boost. Since Indian exporters are facing unavoidable, circumstantial headwinds, their withdrawal limits should be unlimited!