India hasn’t recovered from Modi’s 8/8 attack

One sector of the economy which has been bearing the brunt of demonetisation is agriculture. Sale, transport, marketing and distribution of ready produce to wholesale centres or mandis, is dominantly cash-dependent. Disruptions, breaks in the supply chains, feedback to farmers as sales fall, increased wastage of perishables, lower revenues that show up as trade dues instead of cash-in-hand and when credited into bank accounts with limited access affect the sector.

Developers will face serious fund crunch in the short to medium term, which will further delay ongoing projects. Land prices are expected to fall. The combined impact of this announcement, Real Estate Regulatory Bill and continuous monitoring of circle rates/ ready reckoner rates by states will reduce the gap in prices in the primary and secondary market transactions.

According to analysts, the mobile phone industry saw a slump in prepaid recharges, smartphone sales and data adoption. Demonetisation has already lea to a 50-70 per cent fall in over-the-counter smartphone sales.

Demonetisation has dealt a body blow to the world’s second-biggest gold consuming nation and consequently to the demand for gold, a musthave accessory in Indian weddings. Demand for gold jewellery has dropped as much as 80 per cent with jewellery stores witnessing drastically reduced footfalls and low volumes.

Retail sales of two-wheelers have been severely impacted, down by 30-50 per cent year-on-year in various regions in India due to lack of adequate cashin-hand for customers.

The All India Motor Transport Congress (AIMTC) - a representative body for 9.3 million truckers, and more than five million bus operators, tourist taxis and maxi cabs - says 70 per cent of the vehicles of their members are already off the roads. With the government’s curbs on withdrawal of money and exchange of old Rs 500 and Rs 1,000 notes, the motor transport business is suffering, since 80 per cent of the business is cash-based.

Business was down 15-20 per cent for e-commerce companies in November. The biggest cause for this drop was the lack of cash-on-delivery option.

It is one of the hardest hit sectors, as demonetisation has put the majority of those directly and otherwise involved with tourism at a disadvantage. Except the star hotels and those who had already opted for cashless transactions, the sudden cash crunch has certainly stalled the activities of this predominantly cash-driven sector.