DeMo a stride towards digital & formal economy: Experts

Exactly a year ago on this day, Prime Minister Narendra Modi in his address to the nation had announced the scrapping of Rs 500 and Rs 1,000 banknotes, citing corruption, fake currency, terror funding as threats to the country.

A bone of contention between the government and the Opposition parties, the note ban was a highly secret move that shook the whole nation, drawing both criticism and praise from different quarters.

However, the goalpost on its objective was gradually shifted, with the government saying that the note ban decision would lead to formalisation of cash economy as money flow through digital means can be tracked easily.

"It is now a year after the event and, on reflection, I feel that the impact for the banks has been largely positive. Besides, the fact that banks picked up deposits, during the demonetisation drive, a lot of small loans got paid off, many of which were sticky," said Parthasarathi Mukherjee, MD & CEO, Lakshmi Vilas Bank.

A spin-off from demonetisation has been the overall increased emphasis on digital transactions and that channel has seen a multi-fold growth, he added. Bank unions, however, expressed their anguish on the anniversary of demonetisation, saying the government failed to compensation employees for the additional hours put in by them for two months.

The National Organisation of Bank Workers said employees are feeling cheated as the government has not heeded to their demand for compensation against the overtime.

It further said that the efforts of bank employees made demonetisation a success but they were left high and dry, it said. Sounding optimistic, Ashishkumar Chauhan, MD & CEO of BSE, said it was definitely a bold and timely move.

Aviva Life Insurance Chief Financial Officer Karni Singh Arha said that soon after demonetisation, the industry witnessed a sharp spike in cash payment of premium.

New Delh:, Housing sales were hit badly and prices fell post demonetisation but the realty sector benefited from the move as it led to greater transparency in the market, say property developers and consultants.

Land and luxury housing deals were severely affected after the demonetisation of Rs 500 and Rs 1,000 notes, announced on November 8 last year, as such transactions generally involved black money component.

A step forward has been taken and the vision is to make India a $10-15 trillion economy, DLF CEO Rajeev Talwar said when asked about the impact of notes ban.

"The step taken last year should have been named e- monetisation," he added.

He said the positive impact on real estate is that "now even secondary transactions have converted to banking channel as there is no cash available". Talwar said the housing sales have been down for last 4-5 years and it is not because of demonetisation.

The approval process for real estate projects needs to be streamlined for faster execution, he said. NAREDCO President Niranjan Hiranandani said that past one year not only witnessed demonetisation but also other big policy developments like the implementation of RERA as well as taxation reform, GST.

"To be honest, all of these have had their own share of teething troubles, but fortunately so far things are under control," he said.

"Demonetisation has led to greater efficiencies and transparency in the real estate sector and we welcome this," he added. Hiranandani said the net impact of demonetisation, Real Estate Regulatory Act (RERA) and the Goods and Services Tax would be positive, leading to increased transparency and accountability in the sector.