Elimination of black money remains invisible, they feel
It was a bolt from the blue for several small time vendors, traders and entrepreneurs when the NDA government announced the scrapping of high denomination currency notes a year ago.
The impact, however, is still being felt in many circles and people from all walks of life as the upheaval left no one untouched. The note ban effect seemed to be even intense for those in the the informal sector as the business volume has come down drastically.
The cash crunch immediately in the aftermath of demonetisation reduced the business of small vendors by more than half. “Even now the recovery has only been partial. It was not at all fair to expect the elderly and uneducated people to familiarise themselves with digital transaction. As a result, my business suffered huge losses and even now it has not recovered completely,” says A. Rangayya, a 73-year-old trader.
Homemakers lamented that because of the currency travails they were forced to spend much more on essential commodities and other household items than necessary in the first six months of demonetisation. “Even making payment to milkman and maid turned out to be a difficult task as expenses mounted beyond our budget. What pained me the most was waiting long hours in the queue to withdraw money from bank only to be greeted with ‘no cash’ signboard as soon as I got my turn,” explains T. Dhanalakshmi, a homemaker.
Those who deal with cash on a daily basis now heave a sigh of relief as their profit margins now head upwards. “For the first few months, it was a tough time. Fortunately, I had a point-of-sale machine that saved my business to an extent during demonetisation,” says A. Nageswara Rao, proprietor of a small handloom store.
Students were also affected by the exercise as they could not get their pocket money as before. “Initially, we have to shell out more than the required quantity even for filling the fuel tanks or purchasing any commodity to get change for ₹2,000. This literally emptied our pockets,” says B. Pavan, an engineering graduate.
On the brighter side, the demonetisation led to a significant rise in the number of cashless transactions that in a way enhanced transparency and curtailed pilferage. “Earlier, my driver used to give cash receipts for filling diesel which always used to be on the higher side. Now, I have given him the debit card and get an SMS alert the moment he swipes the card. The quantum of diesel consumption too has drastically come down in the past one year,” observes B. Madhu Kumar Reddy, a truck owner.
The quantum of digital transactions has gone up as several vendors have switched to online modes. “We waited patiently for a couple of months after the note ban. When things stopped to improve, I learnt how to transact through e-wallet which eventually picked up my business,” says Laxmi Narayana, a fruit vendor.
A year later, after experiencing hardship, many feel that the supposed gain from demonetisation such as elimination of black money remains invisible.
Many while admitting that they welcomed the note ban initially hoping that it would contribute to the collaborative fight against the parallel (black) economy, later they felt that the decision hit them harder than the targeted sections.