Demonitisation: Domestic handset makers ask government to allow use of old currency notes

Image result for Demonetisation: Domestic handset makers ask government to allow use of old currency notesIndian handset makers have asked the government to allow consumers to buy mobile phones with the demonetised Rs 500 and Rs 1,000 notes for a month, as the industry faces a 50% drop in daily revenue that translates to Rs 175-200 crore.

In a proposal sent to the telecom, IT and finance ministries, handset makers have suggested that sales can be made against valid Aadhaar cards or voter cards, and each device sold can be traced via IMEI (International Mobile Equipment Identity) number, to avoid misuse.

“This will also provide a trigger for further purchase of smartphones and feature phones to transition to digital payment platforms,” the Indian Cellular Association said in a letter to finance minister Arun Jaitley late Friday evening. “In turn, this will ease the pressure on cash transactions,” said the letter, a copy of which was reviewed by ET.

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Mobile handset sales have crashed 40-50%, primarily through brick and mortar channel, which contributes to more than 85% of the industry’s turnover. The association argued that sales will fall further in the coming days as consumers will conserve cash for the sowing season essentials such as labour, seeds and fertiliser.

“The daily collection of our trade and industry, which should be Rs 350-400 crore, is down by 50%. The cash flow has got affected and it is having a domino effect on the distribution trade and now manufacturing,” the association added.

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