When Prime Minister Narendra Modi announced demonetisation on the evening of 8 November, 2016 that sucked out 86 percent of currency in circulation at that point, the country went through a difficult transition. Unable to access cash from banks or ATMs for a brief spell temporarily derailed the economy. A year later, the digital transformation has changed the payment landscape. Experts talk about the changes and the benefits of demonetisation:
Anand Kumar Bajaj, Co-founder, NearBy Technologies
The digital scale is best accentuated by digital payments which does not need to be dependent on cash logistics management. If India must evolve to the next digital orbit, it must shed the weight of the paper money and coins as well. The front foot promotion done by the Government for granular use of digital payments has helped multiple payment options in the fintech space to get highlighted. Digital payments have helped speed up the logistics of commerce, the cross-border payments. It has cut down the time taken from payment being made to the number of days taken for payment to realise in any other country and then the goods to be delivered.
Demonetisation clubbed with GST is helping a lot of home grown businesses to take benefit of digital commerce. This will help India to monetise a lot of taxes which were hidden in the invisible opaque cash economy.
Ashishkumar Chauhan, MD & CEO of BSE
The most crucial outcome of demonetisation is that it showed that India is ready to accept change, if it is done for reforming the Indian economy. A secondary benefit is that it created an acceptance and awareness about the digital channel among public at large. This will encourage and serve as a first step for Indian economy to become a world leader in adopting modern technologies.
Siddharth Devnani, Co-founder & Partner at SoCheers, a marketing agency
The entire business community took a hit on cash flows during demonetisation, which caused a temporary marginal decrease in media buying across the industry. In the months to follow, a lot of money entered the formal economy - this has a positive impact on the advertising industry, especially digital and e-commerce. This continues the trend of increase in the percentage of budget allocation towards digital advertising platforms. Demonetisation gave a nudge to the entire country to increase transacting online and on mobile. This boost was also coupled with a drastic drop in mobile data costs, taking the entire country truly online.
Ashish R Puravankara, MD, Puravankara
The economy experienced a tiny speed breaker with the advent of demonetisation and the after effect of the same was felt in the real estate sector as well. In its opening phase, demonetisation disrupted the overall real estate business across the country impacting (new) launches, sales, and enquiries. However, post the initial jolt, the Southern real estate sector and especially the Bengaluru market, observed a steady rise in customer enquiries out of which many turned out to be positive leads.
Sundararajan, Executive Director, i-exceed
Post demonetisation, there has been a sharp rise in the number of offerings that cater to peer-to-peer payments, merchant payments and bill payments. Now, consumers can choose from mobile banking apps, payment wallets, government promoted BHIM, bank specific UPI apps and private player UPI apps like Tez, PhonePe, etc. Demonetisation has also ushered in faster adoption of changes in the infrastructure technology to facilitate quicker and smoother execution of these transactions. Initiatives such as UPI, BharatQR, BBPS and AEPS are facilitating standardisation of payment services and improving the interoperability across financial entities.
Ravi B Goyal, Chairman & Managing Director, AGS Transact Technologies
Given the uniqueness of the Indian economy, while digital transactions have grown substantially over the past one year, the number of ATM transactions have also grown significantly over the last few months signalling the co-existence of cash and digital. The future prospects of the ATM industry remain extremely buoyant, with banks likely to deploy ATMs to non-metro cities & towns which will spur growth in the industry. Further, we also see adoption of innovative & advanced features in an ATM making them multi-functional than a mere cash dispensing machine, such as Cash-recyclers, IRIS & QR code enabled ATMs and so on.
Rahul Garg, CEO & Founder, Moglix
The policy of demonetization, at this time last year, had given a much-needed digital push to our economy. It was a preparing ground for the reform of One Country, One Tax (GST) and a boost to the government’s Digital India. The reform has evaded the unorganized players in the market pushed the organized players to meet the trends of digital consumption. Consumers in both B2C and B2B space are more digital savvy and opting for hassle-free methods of transaction. Digital technology and digital-based governance are now taking a forefront.
Pankaj Bansal, CEO , PeopleStrong
Growth will definitely bounce in, if not immediately but in the long term with demonetization. There will be more transparency with the use of electronic payments. So, if the demand is more for such services the supply will also have an effect. In sectors like banking, retail and internet business new jobs will require skill sets that have technical expertise, softwares that run multiple online transactions. So, your employment will be niche with new type of jobs pumping in.
Swati Bhargava,Co-Founder, CashKaro.com
The announcement of demonetisation brought a lot of value consciousness among shoppers. People, therefore, turned to coupon sites, and we saw an increase in the number of people clicking through CashKaro and going to our partner sites to purchase daily essentials and consumables. Demonetization strengthened the Digital India initiative launched by Prime Minister Modi and brought more transparency in the system. It has helped India prepare better for the growth in e-commerce that is bound to come.
Ram Punamaraju, CEO, Yitsol technologies
The good big thing that has happened during the past one year is that we are moving gradually towards, digital economy. Some amount of checks and balances on money trails is needed to know what is happening. This is good for higher denominations. Digitalization is inevitable, it is happening world over.
Mitesh Shah, Head of Finance, BookMyShow
While the intent of demonetization was to curb black money, it has also successfully been able to give a thrust to online payments. Demonetization has been successful in putting money into the mainstream banking. We see money now being deployed to more productive destinations including capital markets and mutual funds, ultimately resulting in more than 20 percent growth in overall investor wealth in the last one year. These developments definitely augur well for the overall development of the Indian economy.
Updated Date: Nov 08, 2017 15:58 PM