Restaurants report up to a 60 per cent fall in sales since Rs 500 and 1000 notes banned.
Mohan Venkateshwara runs a South Indian restaurant in Mumbai's Matunga area. Given the inexpensive menu, the preferred mode of payment is cash. With the banning of 500 and 1000 rupee notes, his lunch home has been among the worst hit.
"Sales have dropped by at least 50 per cent since 8th November. Since the announcement, everyone wants to pay with the 2000 rupee note but I don't have any change," said Mr Venkateshwara.
For Praveen Shetty, the losses are slightly less. His debit card machine has been a life saver in the last one week. But even his business has taken a 20 per cent hit. The average weekly income of his restaurant was Rs 1 lakh but has now dipped to Rs 80,000.
After the government's sudden abolishment of the high value notes, which made up 86 per cent of all the cash in circulation, what is on the menu is now not as important for customers as the mode of payment.
"Right now, when I go to a hotel with a 2000 rupee note, no one gives me change," said Rakesh, a customer.
With cash hard to come by, most small restaurants of them have no choice but to turn away customers.
Hotel and restaurant associations have been appealing to their members to not to turn away customers. Some are even serving food on credit.
"Our earnings dropped by up to 60 per cent after the announcement. But we can't turn away a family who hasn't eaten all day. Sometimes we just take the old note or ask them to pay us back later," said Adarsh Shetty, the President of Indian Hotel and Restaurant Association.
But the situation is much better with the hotel industry, where 80 per cent of the guests opt to book rooms through plastic money and many book online.
"Where there was some problem on the first day of announcement, we overcame the issues that arose quickly. Most of our customers book online or pay by card," said the owner of Hotel Ashray, Suresh Shetty.