The ‘demon’ in demonetization is in the beginning. On November 8, Indian Prime Minister Narendra Modi announced in a broadcast to the nation that Rs500 ($7.40) and Rs1,000 currency notes would no longer be recognized legally as currency. “Great,” said Corporate India, economic commentators, foreign investors, international think tanks and global rating agencies. “Masterstroke,” echoed the Confederation of Indian Industry (CII).
The aim behind the government’s action was to combat tax cheating, counterfeiting and corruption. Eliminating large denominations makes it harder to hide large amounts of cash. Modi noted that the move complements the country’s swachh bharat abhiyan (Clean India campaign). “For years, this country has felt that corruption, black money and terrorism are festering sores, holding us back in the race towards development,” he said. “To break the grip of corruption and black money, we have decided that the currency notes presently in use will no longer be legal tender from midnight tonight.” Added Finance Minister Arun Jaitley: “The goal of this is to clean transactions, [to] clean money.”
Sectors that will be impacted by this move where Cash is king and people tend to stack up for essentials and not luxuries.
The aim behind the government’s action was to combat tax cheating, counterfeiting and corruption. Eliminating large denominations makes it harder to hide large amounts of cash. Modi noted that the move complements the country’s swachh bharat abhiyan (Clean India campaign). “For years, this country has felt that corruption, black money and terrorism are festering sores, holding us back in the race towards development,” he said. “To break the grip of corruption and black money, we have decided that the currency notes presently in use will no longer be legal tender from midnight tonight.” Added Finance Minister Arun Jaitley: “The goal of this is to clean transactions, [to] clean money.”
Sectors that will be impacted by this move where Cash is king and people tend to stack up for essentials and not luxuries.
- Travel and Tourism Sector - Thomas Cook, Cox & Kings, Mahindra Holidays, Wonderla, PVR
- Automotive - Tata Motors, Ashok Leyland, Maruti, Hero Honda, TVS Motors
- Tyres - Balkrishna Industries, Ceat, JK Tyres
- Clothes - Arvind, Century Textiles, Nandan Denim, Bombay Dyeing, ABFRL, Pantaloon Retail
- Realty - DLF, Prestige, Purvankara,
- Cement - ACC, Gujarat Ambuja, Shree Cement
Turn around in these scrips can be expected only after April 2017 which is 5 months away from now.
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