Demonetization: The Voice of SMEs

With the print, electronic and social media endlessly analyzing and scrutinizing the rapid structural change that demonetization has brought to the country, it’s a common knowledge by now that it’s the small-medium businesses who are the real victims of its short-term consequences. 

From extremely low levels of sales to huge employment loss in the country, the reports of how the Indian economy is plunged into chaos has been doing the rounds since a long time in media. To capture the real essence of the sufferings in the SME sector of our economy, we decided to catch up with some of the SMEs across Delhi to understand how they are dealing with the ongoing crisis. 

“My business has gone down tremendously, approximately up to 60% since the demonetization policy has come into effect. Earlier my café was always busy with the employees and the students from the area coming during morning and lunch time. Now, it’s almost always empty, everyone thinks twice before making any purchase, even if it is small.” Expressed Mrs. Kohli on the loss in business she is experiencing lately.

She further added that albeit she believes in the long term benefits potentiality of this move, the current situation is a matter of high concern.

 More so, when being asked on what are her cope up mechanism she answered with deep disappointment that “Nothing is helping much. I have started accepting Paytm payments but it has been of 

little help since not everyone is tech savvy in our country. Moreover, it is really difficult to give salary to my employees who are still unbanked and purchasing raw material is another pain for my business” 

Mr. Ajit Singh of Royal Enfield Showroom in Jhandewalan brought us in our knowledge that embracing technology is serving these industries to a great extent where the customers are willing to make transactions through the digital mediums.

“I am quite happy with this move since it will definitely reap positive results in the long run for our economy. My business has seen only a slight slowdown which is bearable since our customers are ready to pay through digital mediums. We have become more active and efficient in online trading and have started paying all our employees through bank transfers”.  He suggested all the businesses to embrace cashless economy and go fully digital.

Our meeting with Mr. Mohd. Abdul khan, a small business owner in the town was purely accidental. While standing in a long queue, desperately waiting to withdraw some cash, we met Mr. Khan who has an export-import business of hand gloves. On the way to his workplace, he expressed how he was highly upset, disappointed and anguished with this “overt policy” of the central government of scrapping the high denomination currencies overnight.

He added “the step is highly incoherent and the government is doing nothing to omit the fundamental flaws that have emerged adding to the misery of the common man. My business is on the verge of shutting down and I am helpless. I can’t pay my employees. Moreover, they are daily wage workers whose lives are entirely dependent on cash. The government must roll back this step, the welfare of the masses is in danger otherwise”.

When we met Mr. Eddy Singh who is a Regional Cinema Maker, he seemed optimistic for the future and the long term benefits that demonetization is yet to bring but was disheartened by how his film making business had become sluggish.

“It has affected my business in a major way. Almost 50% of my revenue has scaled down. Producers and big giants have stopped investing in entertainment zone now. The unfortunate part is this was the peak season for advertising, a time when brands spend heavily, but seeing economy crunch brands are doing less investments on marketing their product and services as compared to last season.

Advertising is affected by consumer sentiment, which has been pretty low post- demonetization. So this clearly means we see no movement happening soon. Hoping the coming financial year brings our days back. However for the welfare of country, it is worth dealing with short term impact, to see benefit in future.

There has been a sizeable impact of demonetization on the SME sector and the world of business is going through a face of turmoil. While some businesses are learning the ways of the cashless economy, others stand far in benefitting from this.

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Demonetization: The Voice of SMEs




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Demonetization: The Voice of SMEs