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It’s been exactly a year since Prime Minister Narendra Modi announced demonetization of INR 500 and INR 1000 currency notes. The overnight ban was intended to wipe out black money but impacted every section of the society — some positively and many negatively.
Despite the hardships, crucial lessons have been learnt during the phase, right from the way we manage money to the way we run our economy. To find out how businesses cope with the changes, Entrepreneur India spoke to entrepreneurs on what demonetization meant for their businesses and the lessons learnt.
Adoption of Digitalization
Sudip Bandyopadhyay, Group Chairman of Inditrade Group of Companies said demonetization was only one aspect of a series of moves towards creating a more transparent electronic financial system. Setting up Jan Dhan accounts, encouraging payment banks and e-wallets and various measures followed it.
“In the financial sector, we already had fintech companies that facilitated electronic disbursements and collections; even approvals are becoming a function of algorithms and machine learning,” he shared, adding that “Entrepreneurs in today’s India must keep in mind that the more prepared one is, the faster one adapts and the more one can benefit from the country’s ongoing evolution.”
Dr Diwan Rahul Nanda, Chairman, TOPSGRUP agreed with Bandyopadhyay, maintaining that demonetization has truly accelerated digital adoption in India.
“As a brand, we have learned that businesses must be dynamic and nimble enough to adapt to policy changes, which are in the best interest of our economy,” Nanda shared.
Though Rahul Belwalkar, CEO, SecUR Credentials is yet to see the long-term effect of demonetization, he feels integrity has never been this important before as India is getting ready for global standards in compliance and business practices.
“Increased transparency is the way of the future and for India to ride its wave of growth, adherence to due diligence is imperative. Some initial teething issues notwithstanding, demonetization has had an overall positive impact on the country with increased trust in the ease of setting up and conducting business and decreased the likelihood of dealing with dishonest elements,” he said.
Diversify to Mitigate Risk
November is marked as the beginning of both the wedding and holiday season and demonetization caused widespread chaos in the families of people getting married. Trishant Sidhwani, Partner, Dreamzkraft – a wedding planning company — saw the ugly side of demonetization and lost some of their crucial deals.
“The biggest learning for me after going through demonetization was that over time it is always better to diversify your business into different industries to mitigate political and other external risks that you cannot control as a company,” Sidhwani said, adding that with a view of the larger economy, the outcome of demonetization will be actually evaluated in the days to come.