Prime Minister Narendra Modi’s big announcement to scrap Rs 500 and Rs 1,000 notes come as a rude shock to the entire country. ATMs everywhere saw large queues, doing their best to get the last of Rs 100 note denomination, available right now.
Most experts see the change having long-term benefits on the Indian economy, but in the short term.
But like every scenario, there are winners and losers from this one as well, and these are the folks, who stand to gain, and lose from the change in money denomination in India.
Winners
Digital Wallet
Companies like PayTM, Zomato, Big Basket are some of the online shopping brands that will benefit from the denouncement of the Rs 500 and Rs 1,000 notes. Many e-commerce players like Flipkart won’t be taking Cash on Delivery (COD) orders, forcing buyers to opt for debit/credit card or internet banking.
Most people are expected to save up the available Rs 100 notes, use them whenever necessary, and resort to e-payment for big-money transaction.
E-payment option is available across multiple vendors in cities like Delhi, Mumbai and some Tier 2 cities as well. Clearly, digital wallet companies are one of the biggest winners here, if not the biggest.
Banks
You might be wondering what do banks have to benefit from the cash change, after all, they will have to bear the strain of huge chaos, people exchanging their Rs 500 and Rs 1,000 notes.
But this exchange process means that cash flow within banks will increase manifold over the coming months. Cash deposits collected by the banks will help them strengthen their coffers, that add up to easier financing opportunities for the consumers.
Prime Minister Narendra Modi
The BJP-led government has openly said that black money is a big threat to the growth of India. By getting rid of the higher denomination notes, which formed the majority until now, PM Narendra Modi & Co. have made sure that those with black money are in a big danger of losing the hard cash lying around in their coffers.
Losers
Unorganised Sector
While digital wallet holders will not feel the brunt of cash removal from the system, the unorganised sector will be the biggest sufferers here. Farmers, local vegetable vendors and domestic servants will be having nightmare on how to manage their cash situation.
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Small business owners making day-to-day payments will also find it hard to get things sorted in such a short time.
Also, those without bank accounts/Aadhaar cards will have to figure out a way to get their notes exchanged/deposited.
Real Estate Builders
Unlike big companies like Godrej and the Tata’s, most real estate establishments like the Lodha, Parsawnath Group, will have to switch their focus on white money.
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This will make a big dent on their existing cash coffers, facing a hard time to make this money legit and usable in the future.
All Those With Black Money
Most of the black money hoarders have their cash stashed abroad, but for those with their coffers in the country, things have complicated. Folks with unaccounted-for cash will have no option but to deposit this money in a bank, connecting it to their PAN cards.
Also Read: Rs 14 Lakh Crore Cash Junked: What This Means For Black Money
However, this ends up exposing their transactions under the tax authorities. Not sure how they are going to work that out.
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