Several high margin profit making markets are suffering from a wave of cold winds as the number of transactions have fallen drastically from 9th November, a INR 500 and INR 1000 notes that are currently in circulation in the market will not be considered legal tender notes.
This highest fall has been assessed in the registration of new vehicles, a whopping 70 % in the past three days as most people who were to buy the cars have been lining up in queues to get new currency notes. Before the demonetization, the registration numbers stood at 1,500 on an average each day in Delhi NCR, being the highest in the country.
The main reason behind this is that the registrations at the RTOs (regional transport office) are done in cash which is in short supply currently. The RTOs have tried simplifying the process by accepting demand drafts but the long serpentine queues already at the banks have made the prospective buyers to postpone the process. On top of that it is even more difficult to transfer the ownership of old vehicles.
One of a senior government official has said: “Since the registrations are done in cash, few people have been able to register their new vehicles due to the liquidity crunch. Some registrations are taking place but the number is minuscule. Registrations have almost stopped in the 13 RTOs in the city.”
In fact, the most badly hit include the rural markets which see the purchase of entry level two wheelers like 100 cc motorcycles, mopeds and second hand cars. These are purchased in hard cash as the amount is not very modest usually. This has further led to fall in automotive shares in the BSE (Bombay stock exchange) and a closing in with a loss of 2.5%.
