Nirmala Sitharaman said increase in cash withdrawal limits for exporters

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nirmala-sitharaman 24indianews
THE Commerce and Industry Ministry will press for an increase in cash withdrawal limits for exporters, said Commerce and Industry minister Nirmala Sitharaman on Monday. Some exporters have either shut shop or scaled down production because of cash shortages following the demonetisation of Rs 500 and Rs 1,000 notes. Sitharaman, who was speaking post a meeting with the export promotion councils said that the Ministry will take up the issue with the Finance Ministry. “They voiced short term difficulties that they are facing. A majority of them felt they still had a segment of their activities (in cash),” she said, adding that because of a contraction in liquidity post the announcement “they do not have the cash. So some of them prefer closing down the units and telling their workers to come back after a week, or some of them reducing the capacity of production from 100 to 30-40 per cent.” The request for a relaxation has come from exporters in very labour intensive segments like carpets, handicraft and handloom etc, who buy raw material and pay wages in cash to migrant workers. Sitharaman pointed out that the limit on withdrawals of Rs 50,000 per week for businesses was not enough to make all the necessary payments. “Carpet exporters clearly say that migrant and transient workers constitute a big chunk. So they felt paying these workers are still not happening through bank accounts, so cash payments are important”. During the meeting, exporters had also demanded that the limit be increased to three lakh and above. “We assured that, we will take a quick and well compiled report back 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 said. Sitharaman also said that there was no quantification of output loss due to short term closure of units.

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