Many articles have already been written & published on DeMonetisation. Below write-up is not an article or my own blog but compilation of Mr. Sanjay Hegde’s 9 tweets I did for ease of reading in one go & relating themselves to big picture.
@Explains pains & gains of Cashless transactions
Was talking to a builder with a major project near completion. At this stage he would have been doubling his workforce as more workers required at finishing stage.
Reality now is that half of workforce has left to return to villages. Workers want cash payments & do not want bank accounts. More comfortable with old systems where part payment came on signing up & further payments sent home informally. Workmen don’t want to deal with banks.
Currently many returned to villages where at least farm food assured. They are awaiting a return of currency to the economy & employment on old terms. If the government does not provide fresh currency, many may remain in villages & add to unremunerative labour there.
In the meanwhile, project delivery gets delayed; housing loans get extended & some may go down under.
Everywhere message is the same cash gives confidence. People trust only hard cash which they can hold. Everything else is not the real thing.
I doubt that a cash less economy is on the horizon in India. But of course the government thinks, it knows best, what is good for India. Does India agree?
One thing is for sure, Government is free to encourage cashless transactions but cash in the market brings confidence & stability in the business. That confidence & stability is withdrawn at the moment.
@FeignShourie : Opinions expressed here are mine & not of Arun Shourie [Seriously, a Parody Account]