The newspapers and TV channels are criticizing the government for the demonetization exercise. But the behaviour changes that were expected are starting to happen. Some of the early ones are: people are rushing to pay their electricity, income tax, real estate tax or other bills quickly; E-wallet companies are seeing a huge spike in payments; credit & debit card machines are being sought by small mechants at 30 times the normal rate; there is a huge drop in real estate transactions and builders feel cash transactions will be athing of the past; borrowing costs for infrastructure companies is falling fast so they will borrow more to invest more; hawala transactions for Chinese imports is taking a hit; and people in cities are using less cash and switching over to cards, internet banking and e-wallets more than ever. So this change is not without pain especially for the rural areas. But these changes are cause for hope and there is a move away from cash as one of the goals of the demonetization!
- 24 Nov 2016