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Effects Of Demonetization

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By Author: Finway Capital
Total Articles: 155
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A brazen move by the Government of India took many by an overwhelming surprise. From the business owners to the homemakers, everyone was impacted. The category of the impacted citizens gradually increased as the use of 500 Rs and 1000 Rs note began to fade. Let us enumerate the impacts of Demonetization.

1. Economic Slowdown: When the demonetization was announced on the 8th November 2016, the business operators faced hiccups in the daily operations. The absence of other currencies 100 Rs and other denominations led to untoward contingencies. This was an exigency where due to the common man being impacted, even the economy observed a slowdown. With India being a cash-based economy, it was too sudden for the citizens to combat this issue cashless.

2. Business slowdown: The business slowdown acted as the radar for the economic slowdown not just in the capital, but everywhere in the country. What led to the business becoming slow was the presence of abundance of cash prior to this move. Small business owners deal in cash for salaries and other day to day expenses. So to pay the salaries to the employees who did not ...
... have a bank account was a mammoth task. Besides, small business owners often take payments in cash, this drive depleted this practice, leading to no immediate resolve and absence of cash. Those who faced losses had no means but to take a loan against property to make ends meet.

3. Loans: Slash in the property prices was one thing, but the interest rates too were slashed. Loan against property and even business loan in Delhi or countrywide have low-interest rates. More and more people opened bank accounts. This led to the banks having more capacity to lend. With low-interest rates and banks giving out loans, the effect was not all that negative.

Although the interest in Business Loan in Delhi was reduced, many people who had to stand in the queue to get the money to manage their daily expenses faced a lot of trouble. The banks had also marked a maximum value that could be taken out of the ATM's. This too acted as a hindrance to those who suffered from illnesses and age factor.

People losing lives in the process was also heard during this phase. The real objective of this move was to curb terrorism, black money, and money laundering, wondering if that was fulfilled!

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