If we recall the economic situation of May 2014, when we trusted and opted Modi Government with burdensome responsibility. In these last 2 and a half years the government has supported 125 Crore Indians and has made India “perky spot” in terms of global economy.
Last Tuesday night, Date: 08 Nov 2016 was a revolutionary night when every news channel was hit by demonetization news and which really left people in a big shock. Prime Minister, Narendra Modi announced 500 and 1,000 Rupees notes invalid in complete Nation. Totally, unexpected move which is designed to fight against corruption and money laundering and to bring transparency by eliminating black money.
Impact of this change:
The evil of corruption has spread so rapidly by some sections of society,for their selfish purpose which cornered the poor benefits and have weakened the efforts made to remove poverty. In the past few decades, the continuums of black money and corruption has increased.
On the one hand India is No. 1 in economic growth but on the other hand it is close to global corruption ranking close to one hundred. Everything has an end, and there comes a time when you need change and feel to take a strong action for it. The time has come, to end corruption and eradicate black money from India.
Welcoming this enormous step, bankers and industry leaders said that it has been “a bold and revolutionary” step, and affirmed their commitment to smoothen the transition. This move will curb unaccounted-for cash in the economy.
Impact on Real Estate: The biggest impact can be seen on Indian Real Estate. Real Estate sector is going to be most affected by the government’s decision to withdraw Rs 500 and Rs 1000 notes to tackle black money.Property rates will surely decrease because now the property will be sell at actual rates and a big thumbs down to all the brokers who were living on black money and this rate decline will increase the demand of residential and commercial projects as this time will prove to be the golden time period for end users and investors to own a property.
Real Estate has gone little shaky but will recover quickly because the big authorized builders like TATA Housing, DLF Limited etc. and some top notch real estate companies will not be affected with this because they deal in white money and have proved this with their sustained name in market.
Yes, but it will be a big tension for the people who are in black money blanket. Real Estate crash will happen slowly because the pool of builders have gone down but soon it will catch up. This will prove to be the tremendous step in Real Estate to increase transparency.
Impact on Banks: Firstly, people who have a huge amount of legally earned cash, will pledge it in the bank, where it will result? This will surely increase bank’s deposits by a huge fringe.This will directly lead to increase the lending activity as banks have a CRR (cash reserve ratio) to uphold and with the increasing deposits they can do more lending.
WHO SAYS WHAT, DEMONETIZATION LED TO MIX VIEW POINTS OF MANIER-
- HasmukhAdhia, Revenue Secretary, Ministry of Finance He tweets, "This is the biggest and the boldest step by the Government for containing black money. "It is like a surgical strike on black money." This clears his view point that he is happy with this coming change.
- DevendraFadnavis, Chief Minister of Maharashtra He tweets, "Historic and courageous decision on Rupees 500 and 1000 notes to stop corruption and flow of black money. Hats off Hon @narendramodiji!”
- SBI chairman Arundhati Bhattacharya informed about the closing of banks and ATM’s for two days. But they promise to work round the clock to ensure that their customers have a suave experience. They have promised to fill the ATM’s as soon as possible.
- Saurabh Agrawal, CEO and Co-Founder, ZebPay says, 'It is a great move by Mr. Modi to curb money legalizing and fabricating. This will mark the commencement of digital currency era and we predict immense movement in our space'.
- Amitabh Kant, CEO, NITI Aayog said, "A complete Bold, dynamic & brilliant move to end the black money menace and beginning of the cashless, paperless economy in India."
- C.S. Ghosh, CEO and Founder, Bandhan Bank: The decision would cause problems to small traders and common public.
As you might have seen above there are mix viewpoints but no one can deny that this decision is widely praised and the effects will be far better. Strictest extent against black money that could have been taken and for long been required to help bring about greater limpidity, will give the Indian real estate sector more trustworthiness and make it more eye-catching for foreign investors.