It has been a month since the Centre made the shocking announcement of withdrawing almost 86 per cent of currency of denomination `1,000 and `500 in circulation, declaring a war against thriving black money, corruption, counterfeit currency and terror funding in the country. What has changed over the last 30 days? The long queues, non-functional ATMs and cash-starved banks have a story to tell, and Express takes a look at the impact on various people and sectors.
Retail
The months between November and February usually sees a high sale of clothes at retail shops across the state owing to the numerous weddings scheduled. However, ever since big notes were scrapped, there has been less inflow of customers at many retail shops. The Centre had set a limit of `2.5 lakh withdrawal for weddings. This has impacted the the sale of wedding dresses. Postponement of weddings has resulted in a significant drop in profit.
Unorganised sector
One of the most hit sector post demonetisation is the unorganised labour sector. A month since the note ban several labourers are still struggling hard to find work. Those who employ them find it next to impossible to pay them. Most of the workers from this sector in Hyderabad do not hold a bank account. And those who have, do not know how to use them. In several cases the labourers were paid in the banned notes for their work.
Gold/Jewellery
The currency ban coincided with the wedding season. This was a time when several families in the state were gearing up for buying gold. The Nov 8 announcement saw a huge rush outside jewellery stores. The Income Tax department has the sector under its lens and many jewellers have been caught in the act trying to convert scrapped notes into gold. Post demonetisation sales of many small and big jewellers had dropped to zero. However, gold prices are expected to drop post December. Experts believe this will restore people’s confidence in the commodity as a means for investment. However, the lack of clarity in Central government’s policy might further dampen the sale of gold.
Real Estate
Hyderabad has one of the lowest real estate rates in India. The city has seen a steady investment in property and land transactions despite demonetisation. Experts opine investors are making use of lower tax rates in the state and upward momentum will continue till GST comes into effect. Demonetisation has not struck this sector too hard as most transactions in the sector are cashless.
Medical
City has been affected by demonetisation as hospitals seem to have pushed back surgery dates. Some have facilitated online payment facilities. Initial days of demonetisation saw panic at hospitals. Most hospitals were skeptical about receiving payments in old notes. This stopped after Centre announced that only government hospitals and private pharmacies can receive old notes till Nov 24.
Transportation
This has been the worst hit sector. Truck drivers found the big notes they carried were rendered useless overnight. This had cascading effects on supply of essential goods to the city. Auto rickshaw drivers saw a significant drop in passengers. Taxi aggregators resorted to unregulated surge charges. The RTC, however, did not witness much drop in passenger footfalls in the state.
Transportation
This has been the worst hit sector. Truck drivers found the big notes they carried were rendered useless overnight. This had cascading effects on supply of essential goods to the city. Auto rickshaw drivers saw a significant drop in passengers. Taxi aggregators resorted to unregulated surge charges. The RTC, however, did not witness much drop in passenger footfalls in the state.
Tourism
The state usually sees a high number of foreign tourists in the months between October and March but following demonetisation the existing tourists have decided to cut short their visit and not many are expected to arrive. Following the ban, the first causality in the sector were the foreign tourists. Many with big notes found it difficult to get them exchanged at banks. The ministry of finance had permitted foreigners to exchange up to `5,000 of foreign currency per week. According to Airport Authority of India’s data for Hyderabad, in Dec 2015, 3.75 lakh international passengers arrived here. The figure for the same month in 2014 was 2.62 lakh. But for 2016 the numbers are expected to drop.
Cinema
In Hyderabad its usually difficult to get movie tickets on a regular weekend. But since note ban, cinema halls have been wearing a deserted look. Hall owners reported a 60 per cent drop in footfall. Film producers have pushed back the dates for their movie release till situation is normal.
Construction
Demonetisation has brought construction business to a grinding halt. Trucks carrying materials have not been able to operate as drivers do not have liquid cash. Owners of construction companies are finding it near impossible to facilitate liquid currency to pay the labourers.