India Inc. hails move, sees deflationary effect

Leaders of India Inc. commended the Centre’s move and expressed the hope that proper execution of the plan would help curb black money.

Updated - November 17, 2021 10:49 am IST

Published - November 09, 2016 03:24 am IST - MUMBAI:

Leaders of India Inc. commended the Centre’s move to ban currency denominations of Rs. 500 and Rs. 1000 and expressed the hope that proper execution of the plan would help curb black money.

The Confederation of Indian Industry cited the move as an effective means to check accumulation of cash. Dr. Naushad Forbes. President, CII, said “Demonetising high denomination notes can be an effective means of checking accumulation of wealth in cash. The government has taken a measure aimed at the heart of the black cash economy. CII congratulates the Prime Minister and the government for this step.”

Not only was the measure important but it also required extensive preparation for effective execution, added Dr. Forbes

Real estate prices

Nirmal Jain, Chairman, IIFL said, “Prime Minister Narendra Modi has kept his promise of taking stern measures against black money. It was done some 30 years ago and since then a huge build up of unofficial money had happened. It will have deflationary impact in general and more specifically on real estate prices and make homes affordable and is indirectly a boon to honest tax payers.”

Gagan Banga, VC & MD, India Bulls Housing Finance said that there was no gain without pain. “It's an innovative move. No gain without pain !! Extremely good for Housing Finance Companies as cash will reduce and formal credit demand will increase," Banga.

Gold prices

“Those who have a large amount of black money will rush to convert it into gold. The premium for gold bought by paying cash would go up by at least Rs. 3,000 when the market opens tomorrow. Typically the difference in gold price when bought by cheque and cash is around Rs. 500. That difference will spike,” said Kumar Jain, vice-president, Shri Mumbai Jewellers Association.

Saurabh Agrawal, CEO and Co-Founder, ZebPay agreed and said the move would curb money laundering and counterfeiting.

“This will mark the beginning of digital currency era and bitcoins have a huge potential to grow and eradicate black money totally out of the system. We foresee immense movement in our space,” he said.

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