Exporters on Monday sought up to a tenfold hike in the cash withdrawal limit from the current R50,000 a week to be able to conduct certain necessary business transactions following demonetisation.
Exporters on Monday sought up to a tenfold hike in the cash withdrawal limit from the current R50,000 a week to be able to conduct certain necessary business transactions following demonetisation. After a meeting with various export promotion councils, commerce and industry minister Nirmala Sitharaman said: “In labour-intensive sectors like carpet and handloom, work is dependent on cash withdrawal. Their demand is to increase this limit to R3 lakh or R4 lakh or even R5 lakh.”
Exporters in certain sectors said the low cash withdrawal limit has forced some of them to close units for a week and some of them cut production by from 70-100% of capacity earlier to about 35-40% now.
The demonetisation move raised fears that the country’s exports, which witnessed a rise in only three of the past 23 months, could slip again if liquidity is choked. Small and medium enterprises, which deal mostly in cash, are particularly worried.
Sitharaman assured the exporters that she would take up their demand of raising the cash withdrawal limit with finance minister Arun Jaitley. While hailing the move to curb black money, the exporters also said since the transport sector (where payments are mostly in cash) has been affected, the movement of export cargo has been hit.
“They spoke about the short-term difficulties they are facing. A majority of them stated that a segment of their activity like procurement of raw material happens, to a large extent, in cash,” she said. “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,” she added.