The shortage in flow of cash, especially through the ATMs, following demonetisation of higher denomination notes has almost shut down business in Adilabad town. Commerce here largely depended upon money drawn from the ATMs.
According to 2011 census, the town has a population of about 1.2 lakh but the consumption of cash, as shown through withdrawals from ATMs alone is a whopping Rs. 5 crore per day. Most of this money used to be spent as investment in real estate business, payments to farmers and towards purchase of merchandise.
The huge cotton trade and processing industry, estimated to log a turnover of over Rs. 5,000 crore, the booming realty and the local bazaars were capable of absorbing huge sums of black money until the slump in real estate a couple of years ago. Though the quantum of business began to decline soon after realty took a beating, it was hit the hardest after the latest move of the Union Government to control flow of black money.
“We are able to draw only about Rs. 40,000 from four different accounts to make part payments to farmers,” revealed a leading cotton commission agent of the difficulty faced in trade in the market who used to disburse payments in excess of Rs. 10 lakh every day.
“We are selling groceries in retail worth only a few hundred rupees though we sold provisions worth Rs. 10,000 even on the leanest of days until the demonetisation hit us,” a bitter grocer added, not wanting to be named. Trade in the general market in the town depended upon Commercial Tax evasion as businessmen and shopkeepers sold commodities and goods without billing the customer. The multiple level of taxation had them evade taxes even while purchasing goods and commodities from whole-sellers in Maharashtra. Though tax evasion in Adilabad continues to be a worrisome phenomenon, the Income Tax Department is likely to benefit from the move of the Union Government.
