Biz settles to new normal but no relief for realty, unorganised units

Jaipur: 88-year-old Mangat Ram never gave an inkling of how much money he had. The prying eyes of his three sons, seven daughters and close to two dozen grand children could also never fathom the size of cash pile he had at home. Money was his power to keep everybody in control as he, in his own secretive way, showered his blessings with cash to any family member he felt close to. However, in one sweep, demonetization changed all that in overnight and he is yet to come to terms with it.

But in general, people have moved on. One year after the demonetization, cash still hasn't lost its currency. Cash still calls the shots in most of the places - whether one buys ration, fish, clothes, shoes or even jewellery. Standing up in the queue for hours before ATM machines though now remains a memory of a life-time, albeit an unpleasant one at that. On the other hand, digital payment is yet to replace the comfort of cash people are used to.

"India is predominately a cash economy. Even though digital payments are growing at a faster clip, it's still a drop in the ocean," said an SBI official in the digital department emphasizing that it will take years for the country to get a credible cashless status.

However, it's not the same for thousands of traders and the unorganized sector whose oil was cash that moved the engine of their businesses. "It was necessary for us to keep certain portion of our business outside the tax net as it made our businesses viable. That portion was cash-driven. After demonetization, that window got closed making several units unviable. The steel industry shut many of its units pushing many out of jobs," said a steel structure manufacturer in the city.

But for the organized business, it was a time to change even it meant at a cost. In the first three months of note-ban, manufacturing units struggled to pay their staff as they could not withdraw large sums of money. In the Sitapura industrial area where about 700 industrial units operating, some workers had to leave for their villages. But today, businesses are back to the pre-demonetization levels.

"Most of the units in Sitapura have opened bank accounts for their workers. More than 80% of workers' payment is done through bank transactions. Businesses have also recovered. It's a new normal. Now, demonetization is a thing of the past and what we are grappling with is the impact of GST," said Saurav Gupta, general secretary of Association of Garment Exporters of Sitapura.

Besides the unorganized sector, the sector that continues to bleed because of demonetization is real estate. There is large-scale joblessness in the sector even today as the pipeline of new projects has dried up. "Very few industries impact the economy as much as real estate does. Unless this sector finds its feet again, there will be a strong downside pressure on GDP and job creation. Of course, now there is more transparency but the cost to achieve that is very high," said Suresh Agarwal, president, Federation of Rajasthan Trade and industry.