Industry reactions on Modi’s surprise move to withdraw Rs 500, Rs 1000 notes

NEW DELHI: The decision to scrap Rs 500 and Rs 1,000 currency notes from market was taken to create a “corruption-free” India, Prime Minister Narendra Modi said day before yesterday.

“All of us have to work shoulder to shoulder and create a prosperous, inclusive and corruption-free India.” Modi on Tuesday night announced that high denomination notes of Rs 500 and Rs 1,000 will no longer be legal tender to fight against black money and corruption," said the Prime Minister.

Let’s go through the Industry reactions

Sandeep Aggarwal, Founder, ShopClues & Droom says:

"Modi government continues to adopt innovative and feasible way to eradicate black money and move India to 21st century nation. The demonetization of currency notes is a bold step in a positive way and a great move in the direction of weeding out black money. Not only will this move bring transparency in the system but will also control the menace of fake currency notes which has been increasing in numbers.

After supporting startup, giving impetus to digital economy, this is another step for India to be at par with other great nations of the world"

Rajeev Jain, Chief Financial Officer, Intex Technologies (India) says:

“A full-blown war, not just a surgical strike, has been declared by the Indian Government against black money. Withdrawal of high denomination currency notes of Rs. 500 and Rs. 1000 is a very powerful measure to swipe off the unaccounted wealth and corruption that has crippled the Indian democracy for four decades. Rise in the gold price and spurt purchasing signify trivial repercussions of this move. Out of the current Indian population estimated at 123 crore, only a minimal fraction of 2.87 crore individuals filed their income tax return and even lower, one percent or 1.25 crore, paid taxes in FY 2014-15. This is certainly an alarming figure to quote, especially considering that we are a progressive nation.

With the PM's announcement, the honest tax payers will get their fair play. Rapid increase in traffic, frequent foreign travels, business favours and other affluence corroborated large-scale tax evasion. The nation's biggest crackdown will certainly check black money and cross-border monetary transactions of counterfeit currency. This will curb corruption to a large extent and also ease the life of common citizens. Unequal monetary distribution among income groups will also be addressed to some extent, eventually leading to financial inclusion of the under-privileged.”

Mayank Bhangadia, Co-founder and CEO Roposo says:

"This step taken by Sir Narendra Modi is path-breaking and revolutionary, as it sets a great example on how to bring change boldly and effectively. We as a nation have to fight corruption and what a way to begin! This bold move is just another instance of the Modi government’s vision of corruption free India."

Sameer Grover, Founder and CEO Crownit says:

Quote- "Crownit drives large volumes of business to local merchants and facilitates payments for those merchant. It has an option of hassle free cashless transaction and is the best way to deal with the present situation. This demonetization move by the Modi Government is extremely bold and refreshing. India is now on direct path to fully digital economy to ensure corruption free country which we are proud of."

Naveen Surya – Chairman, Payment Council of India & MD, ItzCash says:

“ItzCash card is now coming in as a huge rescue instrument for the public at large, so much so that we have witnessed more than 30-40% growth in the volumes traded since yesterday. Industry has positively hailed the change as it is a much called for move. Most importantly nobody including the common man needs to panic in the situation. While on the face, it may seem to infuse chaos, it is only going to better the flow of physical cash within the economy while driving the digital mandate and thereby strengthening the phygital ecosystem of the country. However the bold alteration will mark a huge cultural, fundamental and behavioral shift in the Indian consumer’s mindset.

Addressing it as a wake-up call, having witnessed an event of this nature and scale, people will now be more inclined to transformative changes. Adaption to digital cash will now find a sweet spot among public at large as a precursor to counter similar occasions while they leverage the immense convenience and seamless interoperability it offers. At ItzCash we have been growing at 60% CAGR last three years and we are absolutely bullish towards a 100% growth projections.” – Naveen Surya – Chairman, Payment Council of India & MD, ItzCash

Rajiv Warrier, Managing Director, Sodexo Benefits and Rewards Services Business says:

“Sodexo welcomes this change as it will accelerate the journey towards Digital & cashless India. Sodexo meal cards and vouchers have emerged as a boon for millions of consumers since they can continue to purchase food and groceries without disruption. These Cards and vouchers are accepted at over 19,000+ merchants across 1400 cities India. We have received strong acceptance for the Sodexo meal card and positive reviews for the beta version of the new mobile payment system. Going forward, we anticipate higher transactions through our array of options such as digital meal cards, gift cards, and mobile based transactions.”

Viren Bavishi, Director, TAITsays:

" Demonetisation of the Rs. 500 and Rs. 1,000 currency notes is one of the boldest steps to curtail the parallel economy fuelled by 'black money' while at the same time cutting off financing of terrorist activities ."

" For SMEs, I don't see any major ill effects - in fact, this move would mark the onset of increased adoption of transactions through IMPS/NEFT/RTGS and mobile wallets that will bring in more convenience and transparency ."

" With GST likely to be rolled out from 1st April 2017, this demonetisation of old currency notes will complement the government's move to ensure higher 'tax compliance'. Strict tax compliance will help SMEs running legitimate businesses, who generally find it difficult to compete with smugglers and those dealing in contraband goods ."

" While there may be hardship for a week or two, thereafter things are expected to settle down, and people in general, including businesses, would be able to get cash when needed through authorised banking channels ."

" In the long run, this move will accelerate economic growth through the digital pipes of e-commerce and m-banking. It will make larger revenues available to government in the form of income tax collections to fund infrastructure growth and development ."

Sathvik Vishwanath, CEO and Co-Founder, Unocoin:

"The intentions are good but very difficult to achieve. If going cashless is the only way forward, certainly the bitcoin which is borderless trustless and transparent currency makes more sense".

Manavjeet Singh, CEO & Founder, Rubique says:

"This is a promising move made by the government towards cashless economy. This will boost innovation in the nascent electronic payment industry. Without doubt, this will bring down frauds and thefts and costs of printing cash. A great blow to black money. If executed well, the costs of doing transactions between buyers and sellers will lower significantly by 2019."

Ranjit Punja, CEO &Co-founder, Creditmantri:

"Sweeping step taken by the PM, but this should have a positive impact in curtailing black money and reducing corruption. Likely to cause some temporary hardship, and with the introduction of the Rs. 2,000 note, along with the security and tracking features, currency will be used as intended."

Kunal Bahl, Co-founder & CEO Snapdealsays:

“We welcome the Government’s bold and courageous move to weed out black money, which will have significant long term benefits for the economy. With this, the quantum of India’s economy moving through the digital pipes will witness massive growth. Both Snapdeal and FreeCharge are committed to supporting all such initiatives.”

Sanjeev Bhatia, Co-Founder, Onlymobile.com says:

This is the best thing which can happen to e-commerce right now. This may adversely affect the Cash On Delivery orders for a while since the liquidity will be an issue for next couple of weeks but this will prompt people to conduct more transactions via prepaid mode. That's what will help to increase liquidity. We have not stopped Cash On Delivery but we have reduced the limit. Earlier our limits were ₹50,000, now it's ₹10,000 and today being the first day - we have seen sales contracted by about 15% only. But I am very much optimistic that the more people started opting for prepaid mode - better for each stake holder in Indian E-commerce market. However, now the responsibility will be on our shoulders to ensure that we provide best possible level of customer delight. Fear of wrong products delivery or order cancellation is the reason why despite of having access to online payment, many still opt for Cash On Delivery orders.

Aditya Loomba, Director of ECO Rent A Car says:

It's a bold step, for the better hopefully.

As an Indian one has to weigh all the reasons that might have influenced this decision of the government including parallel economy, terror financing and fake currency notes. This single decision may work out as a solution to many such problems. Let's hope for a better India.