THE demonetisation decision in November 2016 dampened the vigour of festival sales for traders and small industries in Ghaziabad, the town in Uttar Pradesh which is part of the National Capital Region. Delhi had a quiet Deepavali this year largely owing to the Supreme Court ban on the sale and bursting of firecrackers. No such ban was in place in other parts of the country. Even so, the Goods and Services Tax (GST) of 28 per cent on firecrackers seemed too steep a price to pay for something that would eventually go up in smoke. Rohini, a schoolteacher in Ghaziabad, and several others like her decided to spend less on firecrackers.
While markets were slowly limping back to normal, the impact of demonetisation lingered even after almost one year. Garish Oberoi, president of the Federation of Hotel & Restaurant Associations of India, said the wedding business and use of banquet halls for holding conferences and functions were particularly affected. A number of conferences and seminars were suspended for a long time after demonetisation was announced. The holding of conferences was gradually coming back into vogue but the organisers were careful with their spending, said Oberoi.
By the time Deepavali ended, the business of organising weddings and conferences had limped back to about 70 per cent of earlier levels. Oberoi was hopeful that the situation would improve once more money came back into circulation. While restaurants were coping with demonetisation, GST dealt a blow to their recovery. GST was not what it was expected to be, Oberoi said. But it might help reduce costs for customers eating out in air-conditioned restaurants as and when input credits get passed on to them, he said.
Traders protest Small traders were affected in a big way by demonetisation and GST. Migrant workers from Uttar Pradesh, who used to travel to Delhi during the festival season to make some money by selling earthen lamps and small idols, were disappointed this year. The traders association of Ghaziabad was one of the few associations in the country to take to the streets to oppose the implementation of GST. It protested against various aspects of GST and demanded that it be made quarterly and not entirely online as traders in remote areas were not tech savvy.
Meat traders and slaughterhouses in Ghaziabad were the worst affected. They had to deal with not only demonetisation and GST but also the Yogi Adityanath government’s decision to close down slaughterhouses in the State indiscriminately. The stringent licence regime put in place by the Bharatiya Janata Party (BJP) government in the State caused a severe setback to the meat industry. “The condition is extremely bad. There is large-scale unemployment and meat shops remain closed even today. There is no meat available for wedding parties and they are not giving licences without huge bribes. In some cases, they have asked for bribes as high as Rs.50,000. How can a poor man bear that cost?” Aquil Qureishi, president of the Buffalo Traders Association (BTA), said.
Moderate GST impact According to Aquil Qureishi, GST did not have a big impact on the meat industry in the area as most of the people are poor. But demonetisation crippled the flourishing meat trade, Mohd Imran Qureishi, general secretary of the BTA, said. “When the move towards a digitised economy has not worked well in urban areas, how will it work in rural areas? If you visit some of the remote areas, you will come across horror stories, similar to those from Jharkhand. The poor trader is hit not only by demonetisation and GST but also by the making of Aadhaar mandatory and the increasing communalisation of politics of the region,” he said.
Even as the State government clamped down on the meat trade, right-wing elements harassed meat sellers who were operating well within the law. Earlier this year, meat shops were torched in Hathras. On the eve of every Hindu festival, the Bajrang Dal and other right-wing groups would order the shops to down shutters. “The meat trade is operating at 50 per cent capacity,” said Aquil Qureishi.
The digitisation of transactions beyond a certain limit had hurt the industry, Imran Qureishi said. “Farmers are illiterate. Many of them do not even have bank accounts. Those with bank accounts do not know how to operate them.”
There have been several instances of fraud as farmers have had to rely on other people to operate their accounts. For instance, when a person relied on somebody else to make a transaction of Rs.5,000 in a cyber cafe, it was found later that a transaction of Rs.6,000 had been accomplished. “I was asked by a trader to transfer money to his acquaintance’s account. It has been a year and the person is refusing to return the money. I have also sent him a legal notice. He is sitting in Ferozepur in Punjab. Either I must go there and file a police complaint or forget my money, Imran Qureishi said.
Moreover, agriculture is the primary occupation of cattle traders. A cooperative bank will lend them money only for agricultural purposes and not for buying cattle. “How are we supposed to conduct any business properly?” wondered Imran Qureishi.
Divya Trivedi
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