It was a day of great turbulence in India’s financial world on 8th November 2016, 20:15 IST, as the government announced demonetization of Indian high-value currency notes. The consequent media frenzy, the furor of rumors, arguments, and counterarguments has been yet to abate. India’s economists have taken a widely divided stance on the efficiency of this move and its impact on the country’s black money situation. According to different sources, the country’s black money can be anywhere between 23-75% of India’s GDP. The switch to the digital economy has its myriad benefits but the question remains. Is the common man of India ready to accept the move from cash to cashless transactions?
By demonetizing the five hundred and thousand rupee notes India hopes to flush out considerable amounts of black money as well as to encourage a switch to cashless state within the mainstream economy. Therefore, this new move will definitely have a huge impact on the digital marketing horizon in India. It encourages people to be involved in fewer cash transactions and to use the electronic or plastic money. Apart from the most obvious boosts in terms of tax income, financial analysts reckon this move will have many benefits in the Indian economy. Some of the obvious beneficiaries of demonetization are banks, micro-financing companies, NBFCs and digital financial operators. Indians are traditionally inclined to use cash transactions and therefore some may feel compelled to object the transition into a cashless economy.
The more digital savvy Indians have already embraced the opportunities of demonetization. PayTM Wallet, a popular mobile e-commerce website based in India has tripled its user based on the announcement ON November 8th. However, there are many more steps the Indian government has to fulfill in order to facilitate a seamless transition to a digital economy. India already has an impressive annual growth rate of internet users with the latest statistic showing a remarkable 32%. With over 350 million internet users, the country has the second largest registered internet user rate in the world and is second only to China.
As a digital agency, GBIM has a big role to play in the aftermath of Demonetisation. It is our responsibility to facilitate as many convenient places where people can digitally sign up to transact with their money as they wish. E-wallet companies will have the upper-hand in this new financial environment in India. This is evidenced by the fact that even small local roadside stalls are now setting up payment acceptance through e-wallet companies like PayTM. Many people are now talking about Akodara, the country’s first digital village. Everything from bread, milk, wheat flour to designer clothes is purchased by the people in Akodara through mobile banking methods. The 1,200 people living in this village hardly have anything to worry aboutDemonetisation or making a switch to cashless buying.
Meanwhile, the Reserve Bank of India is urging the country people to use the internet or mobile banking within the short-term as a means of alleviating pressure on the physical currency. According to digital marketing analysts, India’s latest monetary change will be the start of a new economic era with Indians having greater access to the benefits of transacting in a digitally empowered world.