The surprising move to ban the old ₹500 and ₹100 note has totally disrupted the Indian economy. Many businesses are unable to generate any revenue in the last two days.
Most of the customers are visiting the market and showcasing high purchase power with the sole intention of using the existing 500/1000 notes. Many people had come to me asking for change for anything they buy, but I don’t have any”, said a road-side vendor.
Most of the market became stagnant due to unavailability of cash. No cash flow meant no deals for luxury or heavy items. Even though temporarily, this huge decision has somehow affected almost every citizen of India, thus generating a myriad of troubles. Housewives and female workers belonging to lower middle segment are also facing adverse effects because their hard-earned income and savings, which they somehow secretly accumulated from their bibulous husbands and thrifty family. The worst hit due to this implementation were the people having wedding ceremonies around or big ceremonies/ functions followed by the patients requiring instant medical assistance.
Citizens have actually faced hiccups every now and then due to shortage of ₹100 notes as 86% of the currency was from those two denominations. Politics, real-estate, jewelry, unorganized sectors and domestic workers have faced the unavoidable problems owing to their businesses running mostly on cash, which led to chaos and inconvenience. The negative scenario is at the rural level as almost every business there is facing the shortage of change.
It might become difficult to distinguish the money saved out of taxable income with the unaccounted or “black money”. Certain business people were seen commenting on tax-dodger as they will definitely find out ways to en-route cash through fake entries and later bring back again in the original accounts.
Moreover, there is a huge confusion related to the maximum limit, duration as well as the process of currency-conversion, exchange and deposits among the frenzied civilians. The wrath of consumers can be viewed in the following pic:
While online payments mediums such as debit and credit cards, net-banking and digital wallets will be boosted, but it will take a long time since their usage and knowledge is quite low in lower and middle class, for whom cash is still the predominant mode of transactions. “Many people are facing a lot of problems during these days but these are temporary whereas the long term benefits are permanent”, said the bank cashier of a Cooperative Society. Overall, every citizen has grown matured enough to keep their short term personal sufferings aside and whole-heartedly support the system to eradicate the strenuous, devilish and corrupt practices from the society and make Indian economy stronger.
(LSE COHORTS 2016)