Luxury & Demonetization-Bane or Boon?
India’s foremost iconic luxury advisory company LUXURY CONNECT, through a process of desk and field research, has carried out an assessment on the ground realities of demonetization through its educational wing Luxury Connect Business School (LCBS).
8.00 PM – the 8th of November 2016, came upon the citizens of India as a thunderbolt !!
Some were bewildered! Some confused! Some exultant! Quite a few were gripped by panic! Prime Minister Narendra Modi announced the biggest ever demonetisation drive of India. The enormous scale and its would-be effect or repercussions had never been witnessed in any part of the world. In a bid to clamp down on black money, fake currency menace, terror funding and corruption, the government as of that hour, abruptly withdrew the validity of Rs 500 and Rs 1,000 notes from public
Overnite the economy came to a screeching standstill – pundits prophesied absolute doom !! But that was not to be – the move towards a digital and cashless economy significantly reduced the cash supply in the market. It is estimated that during the two month period, 86% of cash (or Rs. 12.44 lakh crore), was withdrawn from circulation. In a country where an estimated 90+ percent of transactions were cash-based – this sudden withdrawal resulted in liquidity and discretionary spending constraints, adversely impacting mainly the physical brick and mortar establishments across sectors.
The motive was noble and perhaps in the long term – a reformer for a developing nation like India. However, several industries were adversely affected, one of them being Luxury.