From the stroke of midnight of Tuesday, 8th November, 2016; Prime Minister of India banned the usage of Rs. 500 and Rs. 1000 notes of Indian National Currency. A similar note ban call was last implemented around 30 years ago. This is taken as one of the strongest move by the modern era Indian Government. The majority of industries and citizens alike reacted to this conclusion with powerful support. However, the call has sustained mixed reactions till now.
Taking everything into account, this scheme will impact the small businesses, financial institutions & secondary markets – all at some level or the different. The impact may not last very long, but is sure to have its affects in next 60 days.
Businesses based on cash transactions
Almost all of road side vendors, shop owners and small business have been running on cash based transactions till now. The current situation of demonitisation has left these businesses with least customers in all these years. People might debate that these business owners may not be earning above the taxable limits; but 90% of these owners never deposited the money in the banks and thus contribute towards black money hoarding. Thus, such move will push them to start depositing money in banks and be accountable to it. Most of these vendors have now started keeping card swiping machines and other online payment methods.
Businesses based on cash transactions
Almost all of road side vendors, shop owners and small business have been running on cash based transactions till now. The current situation of demonitisation has left these businesses with least customers in all these years. People might debate that these business owners may not be earning above the taxable limits; but 90% of these owners never deposited the money in the banks and thus contribute towards black money hoarding. Thus, such move will push them to start depositing money in banks and be accountable to it. Most of these vendors have now started keeping card swiping machines and other online payment methods.
Read more: DEMONITISATION
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