On 8th November, we were celebrating our daughters 12th birthday, when suddenly a series of messages on Whatsapp started coming. The messages read that all 500 and 1000 currency notes were void from midnight. At first I thought this to be another social media prank. But then the messages went serious and I went and switched ON the TV. I saw the news and clip of what the Prime Minister talked a while back. Immediate reaction was of un-belief. I could not understand what has just happened? Ever since I have been in my senses, I have never seen a drastic action like this by any government. People say talk about Emergency in 70’s but then I was too small to understand the same. However this sudden step kept me thinking, and I watched the TV the whole night and started analyzing what could happen in the future. I was somehow getting convinced that this is something, which was drastically going to bring a change in the whole financial system. I was still not sure what. Next few days were of chaos. But one thing kept my belief strong was that this is something, which is going to be very good for the country in a longer term.
As we near the 1 year of demonetization, there have been discussions, debates all over, be it on TV, social gathering, private parties. Everyone have their views. I take this opportunity to pen down my thoughts of 1 year of demonetization.
As the events kept unfolding, people kept on speculating. There were debates, discussions, round tables etc. Government had a version where they talked about the merits, opposition slammed the moves with all sorts of de-merits. In my personal opinion, there may be some issues of debate like the timing, mechanism, purpose, objective etc. It will be very difficult to determine the absolute right or wrong. But I am still convinced that this is a step, which will bring a lot of positives in the overall financial eco-system. The reasons for my conviction are :
- Idle Currency – Demonetization brought the idle currency used for payments mostly without taxes into the circulation. Currency in bank is better than sitting idle in homes.
- Fear of hoarding currency – With this step, there is a fear of hoarding currency notes, which are usually used for illegal transactions. I consider cash payment to avoid taxes to be illegal
- Expanded tax base – Demon has expanded the tax payers base, and I see that this is going to be a continuous process. I assume that govt. is using analytics to determine the illegal sources of currency deposit and sooner or later, will be able to identify the moles.
- Technology penetration – Cashless economy means that the technology has to penetrate in the remotest of the areas. Demonetization has accelerated the process of technology adoption in every corner of the country.
- Change in payment systems – From my view, this is the biggest impact and change that demonetization will bring to the country. Already I see that a lot of merchants and business owners have started adopting digital form of payment. This may hurt them for short term, but for the larger interest this is going to be a boom for the country.
Demonetization has acted as a catalyst for merchants, small and home business owners and people at large to adopt electronic payment mechanism. It has brought huge paradigm shift towards cashless economy. It has also confirmed our belief in the currency of gifting.
Taking cue from quick adoption of digital mode of payments, encouraged Storecheq to build the platform for merchants to create their own gift cards program. Gift cards can enable the merchants with strong brand value in local vicinity to participate in the 40Bn USD gifting market in India. Storecheq is launching the cloud-based platform, which will enable the merchants and retailers at local level to create and manage their gift card programs.
Storecheq aims to run gift card programs for merchant in every corner of the country, in line with the digital and cashless economy vision of the government of India.