In a meeting with Minister for Commerce and Industry Nirmala Sitharaman, exporters have expressed anxiety over a possible fall in output over the past week due to the government’s demonetisation drive. The exporters voiced their short-term difficulty that they were facing and said that a segment of their activity like procurement of raw material is happening to a large extent in cash, and demanded an increase in the withdrawal limit from Rs 50,000 a week to up to Rs 5 lakh.
Sitharaman assured them that she would take up their demand of enhancing the cash withdrawal limit with the Finance Minister Arun Jaitley so that quick remedial solutions are offered. She also noted that in labour intensive sectors like carpet and handloom, working is dependent on cash withdrawal so they are demanding to increase the limit. She added that others felt that this month's output might have a bearing because of this cash limit. She further said that due to lack of cash, some of exporters preferred closing down the units partially and some of them were reducing the production capacity from 100% to 30%-40%.
On November 8, 2016, the government had declared demonetisation of Rs 500 and Rs 1,000 note replacing them with new Rs 500 and Rs 2,000 notes to curb corruption and make efforts to recover ‘black’ or unaccounted money.