"The worst seems to be behind, whereas the previous best is still a fair distance away” seemed to be the dominant sentiment among stakeholders while looking back a year after the massive shake-up through demonetisation.
Broadway, the commercial hub of the city, was one of the hardest hit in the immediate aftermath of the withdrawal of high denomination notes, as the otherwise bustling street became deserted, business plummeted to new lows, and a section of traders either sent employees on leave or sacked them outright.
“Though business has recovered from initial jitters, it continues to be 30% to 40% less than what it was pre-demonetisation. While majority of traders had purchased point of sales machines to overcome the initial currency deficit, cash transactions have more or less returned since then,” said P.A. Sageer, president, Broadway Shop Owners’ Association.
'Political propaganda'
K.K. Ashraf, vice president, Market Stall Owners’ Association, has no doubt that claims of the economy having weathered the shock of demonetisation were nothing but political propaganda. “We never recovered from that shock, and the struggle continues. As jobs were lost, people’s purchasing power dropped, and that in turn reflected in the market. Those who brought about demonetisation should now find a solution for us to recover from its blow as well,” he said.
Mohammed Sageer, general secretary, Kerala Merchants Chamber of Commerce, lamented that hardly had traders recovered from demonetisation, another blow came in the form of Goods and Services Tax (GST). Construction and real estate sectors are down, and that will reflect in the general trade scene. It will be long before trade and industry recover from the twin blow, he said. Admitting that demonetisation and GST did impact the real estate sector, CREDAI Kerala chairman Najeeb Zachariah said that in any case the sector was not really booming over the last couple of years and was at best steady.
“There is a genuine end user demand, while there are also fence-sitters owing to multiple factors. The sector will improve with the overall improvement in the economy and home loan rates further coming down to the range of 8%. The proposed GST rate rationalisation will also help the sector,” he said.
A senior bank official on condition of anonymity said that with little demand for loans in the wake of demonetisation, banks seemed to have turned to cross-selling incentivised sale of insurance policies and mutual funds. He added that cashless economy could have been further promoted by rationalising service charges on using cards.
Mavoor Vijayan, a vociferous opponent of demonetisation who staged anti-demonetisation plays 92 times, said it was a calamitous move that pushed thousands into agony and even deaths standing in queues before banks and ATMs. It broke the back of the informal sector leading to massive job losses, he observed.
