Demonetisation Dilemma

Posted by kaushambi.chatterjee
February 14, 2017

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People standing in queue outside the HDFC bank to get new currency


What happens now?

The morning of 8th November 2016 was just another day for the common man who was busy with his list of things to do. For some it meant a day of work in the office while for others it was all about running their business successfully and making profits. Everything seemed normal and the day slowly faded to dusk when there was a sudden palpable energy from every home. The prime minister makes an appearance on live television and calmly bans the INR 1000 and INR 500 currency notes with immediate effect and allows citizens to change their old cash to the new INR 2000 and INR 500 till 31st December 2016. This created an uproar everywhere, while some were happy thinking black money would be banned others remained pensive wondering how they would face the cash crunch since the banks only had a limit for withdrawal or  change which a person could do. The dilemma in everyone’s mind was whether to save the cash in bank or keep it stashed away in the locker.

Three months into demonetisation, the common man still suffers, much more in the rural setting than in the urban areas but perhaps the most affected are the businesses which heavily depended on cash. Mr. Modi’s demonetisation was to curb back money, reduce cash transactions and introduce digitalization in India but it ended up affecting the cottage industry and the kirana stores which provided employment to a large number of people and thrived on cash transactions. The sales hit an all time low and many kirana stores closed down due to lack of funds to keep them running. The supermarkets breezed through it all since they had provisions to swipe the cards and the customers started buying from these supermarkets since transaction was easier.

However, there were few kirana store owners who wouldn’t accept defeat and they started using electronic wallets like Paytm and Oxigen to attract more customers and ensure their business dint collapse the way many of their peer’s did. When the customers came to know about the electronic wallet facilities they started buying from these stores again but the damage was done. Though the prime minister’s dream of digital transaction conceptualized and the trend changed from cash transactions to digital payments, the once popular store in every colony which was already facing trouble in the form of competition from supermarket giants now faced a bigger demon which further dwindled their customers.

Like the two sides of a coin, demonetization ended up having many pros and cons but the dilemma remains strong in the minds of the common man whether to actually applaud the new rule or abhor it for the suffering caused.

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