News Karnataka
Thursday, February 02 2023
Business

Economic slowdown biggest negative impact of DeMon: Survey

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New Delhi: A survey on the impact of demonetisation, done three years after it was done, has revealed its impact — 32 per cent said it caused loss of earnings for many unorganised sector workers, 2 per cent said it was a sizable migration of labour to villages and lowered rural income while 33 per cent said the biggest negative impact of demonetisation was the economic slowdown.

The survey done by a social media firm ‘LocalCircles’, was released on Friday here. The pan India survey was done to check how consumers were conducting transactions and whether they felt that demonetisation had brought any positive change for the country.

“When asked about the negative impact of demonetisation, 32 per cent respondents said that it caused a loss of earnings for many in the unorganised sector and two per cent said it led to migration of labour to villages and lower rural income. A sizable chunk of 33 per cent said the biggest negative impact of demonetisation was the economic slowdown. But, there was the 28 per cent chunk that felt that there was no negative impact”, the survey said.

An important goal of demonetisation was to reduce the use of cash in transactions and encourage people to pay using non-cash modes, but the use of cash in the Indian economy does not seem to be reducing, the report said.

While 28 per cent feel the demonetisation had no negative impact, it has also been reported that the amount of fake currency seized in the last three years has considerably shot up when compared to the pre-demonetisation time, the LocalCircles said.

The survey also said after three years of demonetisation, citizens identified the expansion of tax net as the top positive, and the economic slowdown and the loss of earnings for the unorganised sectors as the top negatives.

Percentage of citizens using cash as primary mode of transaction reduced by over 30 per cent in one year and the citizen feedback suggested cash component in property buying rose in the last year, it said.

It has been three years since the Rs 500 and 1,000 notes were demonetised to curb the use of black money and fresh Rs 500 and 2,000 notes were released.

After that the Centre has taken several measures to promote digital transactions, but according to the feedback from people via LocalCircles survey, though digital transactions are increasing year over year, a large number of people still prefer cash transactions over the digital transactions.

The 2,000-rupee note has made it easier for people to keep cash in stock. On a purchase of a property in the last 12 months, 33 per cent said they paid the full amount by e-payment or cheque while 10 per cent said they paid under 25 per cent in cash and rest via e-payment or cheque, and 57 per cent said they said 25-50 per cent in cash and rest via e-payment or cheque.

When asked for which category of purchases have they paid the most amount in cash (without receipt) in last 12 months, 31 per cent said salaries of domestic staff, 36 per cent said groceries, 5 per cent said discretionary purchases and eating out, and 7 per cent said property, rent & home repairs. One per cent each said jewellery and used vehicles while 7 per cent said they used cash to pay bribes while 12 per cent said they did not make any purchases in cash.

People were asked that three years after demonetisation, what they thought was its top benefit — 21 per cent said it reduced black money in the economy and 12 per cent said it increased direct tax collections, 42 per cent said it brought a large number of evaders in the tax net while 25 per cent said they felt demonetisation had no benefits at all.

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