Without no warning, on the night of 9th November, the PM demonetized 500 and 1000 notes in the country. New 500 and 2000 bank notes were offered as a replacement, causing a lot of confusion overnight. This entire situation of demonetization was quickly backed up with electronic payment systems, banks and digital wallets.
While the biggest losers from this move was those who evaded tax, and had a lot of black money, the winners came out to be electronic payment services. PayTM, one of the largest mobile payment wallet services provider announced the very next day that they will allow transactions for the moment with 0% fee.
The company witnessed a 200% increase in app downloads and 1000% increase in addition of money to the digital wallets. Another popular service, MobiKwik saw 40% increase in app downloads. FreeCharge – another service often used to pay bills witnessed an increased activity amongst users.
Cab aggregator services, such as Ola and Uber, along with online grocery stores like Bigbasket mailed all its users, encouring them either to use online payments or the digital wallets of those services. Cash back offers and discounts were made to make sure more people use them.
Property, Food and Gold sales decline
The realty sector is often considered as the safe haven for black money. DLF India’s stock fell by 17 percent and sector index dropped 11.6 percent. The crackdown on black money also meant that people won’t be buying gold with their undisclosed income. So, India’s gold demand is predicted to fall by 100 to 150 tons from the average of 800 a year.
Domino’s Pizza and Dunkin’ Donuts also reported sales decline as most of their consumers are students who pay by cash.
All these are sectors in which a lot of transitions happen with physical cash and no records are kept in some may of these places.