No relief for traders

The wholesale retail business is based on trust and goodwill as wholesalers provide stock on credit and the retailers pay back after they sell that stock.

india Updated: Oct 03, 2006 04:49 IST

The Supreme Court’s decision to stall the sealing drive till October 31 was expected to be a breather for traders that would allow them to make up for their losses during the festive season. However, traders claim it is no relief at all as they are unable to get stocks on credit from wholesalers for the season. There is also a dearth of space for keeping the extra stock because basement godowns and storehouses are on the hit list of MCD.

The court has directed the 31,694 traders who had earlier submitted undertakings that they would stop unauthorised use of their residential premises to shut shop by October 31. The period from mid-September to January is called the festive season by traders as Diwali and the marriage season fall during this period and traders make up to four times their average profit.

“The average daily business in Delhi during this festive and marriage season used to be Rs 250 crore but due to the uncertainty brought by the sealing drive, it has been reduced to Rs 90 crore," said Praveen Khandelwal, secretary general, Confederation of All India Traders. "Suppliers and manufactures are unwilling to provide any stock to Delhi's traders on credit."

“The court would have rather started the sealing drive again. At least then we would not have spent sleepless nights for another month," said Gulshan Sachdeva, president of Rohini Central Market Association.

Wholesalers not supplying stock

"Most of the traders here have filed affidavits and have an uncertain future after October 31. We do not have the courage to buy fresh stock and would try to dispose of our old stock first,” said Sachdeva. “The wholesalers know our shops will be sealed. They are busy collecting pending payments."

The wholesale retail business is based on trust and goodwill as wholesalers provide stock on credit and the retailers pay back after they sell that stock. With the future of shops running from residential areas uncertain, wholesalers have either stopped providing stock on credit or have reduced the credit period. “I am in the fabric wholesale business for 35 years and get my stock in bulk from Mumbai, which I supply to retailers in Delhi. Despite the goodwill I have earned over the years, Mumbai wholesalers are now doubtful about sending me stock on credit," said Ishwar Gupta, a Lajpat Nagar-based wholesaler.

Gupta said that before the sealing drive started, wholesalers were providing him stock on credit for up to three months. Now they are demanding cash payment or will give stock on credit for a small period.

“My clients are affected by the sealing drive and are unable to pay me in time. As a result, I cannot pay the Mumbai wholesalers. They call me up to enquire if I would be able to pay by October 31,” he said. “The flip-flop over the sealing drive has affected the whole business chain from big and medium wholesalers to the small retailer," he said.

"People buy new furniture or change home furnishings during the festive season and we do the biggest business during this time. However, this year we could not stock our shops despite the one-month time given by the court,” said Sanjeev Kohli, a trader of Jail Road, which is known for its furniture showrooms.

First Published: Oct 03, 2006 04:49 IST