Banknotes with denominations of 500 and 1000 rupees (note: accounting for 86% of the total currency circulation in India at that time) stopped circulating immediately, and the existing banknotes must be deposited in the bank or exchanged for new coins within 50 days, otherwise they will become waste paper.
This so-called "financial blitz" against black money, corruption and counterfeit money is undoubtedly part of Modi's strong reform. But a year later, the reality is not far from Modi's wish.
Cause unemployment and hit the wedding industry hard.
As Bian Xiao pointed out, at the beginning of 20 17, ADB, the International Monetary Fund and other institutions all expressed optimistic expectations for the Indian economy. However, the latest data released by India shows that the situation is not good:
In the first quarter of 20 17, India's economic growth rate dropped to 6. 1% and to 5.7% in the second quarter, the lowest in the last three years.
According to Liu Xiaoxue, an associate researcher at the Asia-Pacific and Global Strategy Institute of China Academy of Social Sciences and a special commentator on overseas networks:
Obviously, the decline in India's economic growth in the first quarter was the result of the government's "waste of money". 2016165438+10, Indian prime minister modi suddenly announced the abolition of the old 500 and 1000 rupees banknotes and replaced them with new banknotes on the grounds of anti-corruption, anti-money laundering and anti-terrorism. Because the Bank of India did not print enough new banknotes, the "cash shortage" lasted longer than the government expected, which brought unpredictable results to the Indian economy, and many industries that relied on cash settlement, such as retail, transportation and real estate, were hit hard.
The sustained economic decline in the second quarter is the result of the uncertainty brought by tax increase and reform in the market on the basis of the influence of waste banknotes.
According to the World Wide Web, the slow economic development has also led to the lack of jobs. It is estimated that this year1-April, the "Banknote Waste Order" made 6.5438+0.5 million people unemployed, which also impacted the labor participation rate and has not fully recovered. The labor force participation rate reflects the proportion of the employed population, the population willing to work and the population looking for work to the working-age population.
Recently, Rahul, vice chairman of the Indian National Congress? Gandhi wrote in the Financial Times:
In India, it is Indian SMEs that can really meet the challenge of China, and Modi's reform has dealt them a fatal blow.
However, the Indian government does not believe that the waste of banknotes has affected employment. According to The Times of India (165438+18 October), Ravi shankar Prasad, Minister of Information and Communication Technology of India, said at a press conference held in Bhopal on the eve of the first anniversary of India's "Banknote Waste Policy" on the 7th that only those who do not improve their skills will do so after "Banknote Waste". Prasad believes that digitalization has created new employment channels. He said:
"We have provided loans worth 400 million rupees to 80 million people, including small vendors, cart vendors and businessmen from low castes, tribes and ethnic minorities. If each of them hires at least one person, it will naturally generate 40 million jobs. "
India's wedding industry has also been hit hard by the "waste money order". The Indian Chamber of Commerce and Industry (Assocham) issued a statement on 10/23 October, warning that ordinary Indian families may cut their wedding expenses and the output value of the wedding industry may shrink by 10% to 15% under the double blow of the "banknote waste order" and higher goods and services tax.
Every small series understands that in the eyes of Indians, weddings are more important than buying a house. According to the 20 15 Indian Consumer Report released by Goldman Sachs, the average cost of Indian weddings ranges from $7,500 to more than $75,000. In contrast, the average annual income of urban population in India is only $3,200.
Bank deposits have increased, but the cash position is hard to shake.
According to the World Wide Web, India's "Banknote Waste Order" also has an optimistic impact. Starting from 20 16 1 1.8, more and more Indians put their savings into the formal economy, thus expanding the growth of bank deposits. According to the Indian government, this is one of the original intentions of the abolition policy, so as to gradually lift India's large-scale shadow economy.
According to Mao Keji, a researcher at the Indian Research Center of Pangu Think Tank:
The most direct beneficiaries of Modi's "anti-black money movement" are Indian mobile payment companies and Internet finance. In his first national speech after the issuance of the banknote abolition order, Modi said that India's policy goal is a "cashless society" and called on the people of the whole country to "use less cash". In India, where credit cards and swipe machines are not popular, the subtext of using less cash is to use more electronic payment. Modi even directly mobilized ordinary people to learn to use the APP. In this way, India's largest mobile payment and business platform Paytm and India's second largest payment platform MobiKwik have become big winners.
For example, according to Paytm's statistics, there are currently 4 million people using Paytm wallets, and the number of transactions per day has reached a record 5 million, and the amount of payment and transfer needs to reach 3.5 billion US dollars. Platform funds increased by 10 times, traffic increased by 700%, and application downloads increased by 3 times ... but this prosperity is due to the fact that many new users are already using smart phones, and they just transfer the remaining money to the mobile terminal. The bigger problem is how to integrate the huge group without smart phones, cell phone signals and power grids into the advanced online payment system. They are the real potential of India.
Because the infrastructure based on electronic mobile payment in Indian society is not perfect, the enthusiasm of mobile payment in India has gradually cooled down. The owner of a stationery store in Delhi said that at first there were five e-wallet transactions every day, but now there are only one or two transactions a month. "People still seem to be used to cash transactions." The boss said. In the gold trading market in Delhi, cash is still the main trading method. Carpil, an Indian gold and diamond trader, stressed: "I insist on using cash. There was a robbery in the store here, so I don't store a lot of jewelry in the store as before, but I don't accept any checks or shopping cards. I only accept cash. " Piccard believes that customers also like cash transactions because it can save tax payment.
165438+1On October 7th, Indian Finance Minister Allen Jetley wrote on Facebook that the "Banknote Waste Order" was "a watershed in India's economic history". From the historical point of view, it is still unknown whether the Indian economy is developing in a good direction or in a bad direction.