Note Ban came as surprise to many when Prime Minister Narendra Modi announced the same on the eve of November 8. Not only the frauds look perplexed, but the economists were also confused about it. The motive of the Currency Ban was to remove the black money from the Indian Economy and crash the parallel economy that was going in India since a long time. However, soon it became a chaos in the Banks. There was no cash, the digital economy was at the nascent stage and people hard fought the situation to overcome it. However, the country stood beside Prime Minister and the RBI for the betterment. However, the outcome of the Currency Ban is not as shining as glorious it was promised to be. Few things have definitely changed but there are things that cannot be overlooked.
Indian economy is still surging thanks to the Purchase Parity of the customers in India. However, as per a recent report by Fitch, the spending of the Indians have reduced by a considerable amount. The prime reason behind it has been the lack of cash. Even today, getting cash from ATM, it is not as easy as it used to be. People are scared of another demonetization, thanks to the rumours of course. The thriving GDP of India has taken a back seat for few days. However, that should not be the ultimate trend.
Lack of Digital Economy Infrastructure
It is easy to say but difficult to be implemented. Indian infrastructure is not strong enough now to have a fluid and easy digital economy. Paytm and other companies came into the picture the ease the pressure but soon started doing business and started charging. There is still a lot of money to be made by people and companies through digital currencies, for example, take this advice from xCoins to start seeing how you could invest in cryptocurrencies for potential profits. These digital currencies could become extremely useful now due to the note ban.
The bank fees have rocketed ever since the demonetization has taken place. It is true that the loan rates have fallen but the transaction charges have increased. There is a cap installed in the cash transaction too. Overall, the situation is quite complex for people. However, for those in India who are in need of a digital bank transfer, they can look at “how to send money to india from usa” with companies like xe.com, so they are covered in that respect from overseas.
The only way forward is to initiate the process slowly and then ensure that the people are taught about the same. The Government should bring a high amount of transparency in the process too.
The Indian Economy needs the push now from the Government and it is required immediately.