With the announcement of demonetization in Indian, the entire nation came to a halt. People from all walks of life – the businesses, entrepreneurs, corporate employees, small workers to even household help struggled through a phase of learning digitization the hard way.
In 2018, a year and a half later, demonetization continues to affect millions of people in their everyday life. Here is how Indian businesses have been hampered!
With the loss of money from the market for a brief period the sale of products was disturbed in the retail market. While businesses were tracking down ways to enhance payment systems, there was a loss of customers and sale without the proper aid of notes. No cash meant No sale for the first few months!
As there was no money in the market and the banking operations were slow too – there was a money crunch. The withdrawal and deposit of money were limited too, causing the economy to struggle. This impacted the businesses the most as there weren’t any sale or way to take out money for use.
With the limited money in hand and loss of purchasing power from the customers – the growth rate of the economy went into negative. Businesses suffered here because the growth stayed suspended for more than a year bringing people to a level down income zone. Every non-online business person suffered at least a loss of business to the rate of 10-20 percent.
The small business owners who had already been running the business with limited means lost their growth opportunities the most. There were businesses shut down or temporarily closed until the market returned to its stability.
India is still in its recovery phase post demonetization. The rise in the business opportunities has led to better growth and brighter future.