The industry is likely to take the decision by the RBI, to withdraw ₹2,000 notes from circulation, in its stride and its impact on the micro and small scale industries will be negligible, said K.N. Narasimha Murthy, president, KASSIA.
Explaining the reason why it will barely impact MSMEs, he said the apex bank has given a wide window for depositing the notes, till September 30, for getting it exchanged. There will be a few practical problems in case of large volume transactions with respect to employee salaries and payments to suppliers as these are substantially done in ₹2,000 notes, but there is no scope for complaint as they continue to be valid as legal tender.
As far as the economy is concerned, KASSIA echoed the views of experts to state that it would be least impacted, as the volume of such notes in circulation is relatively lower and a very large part of the cash in the system is unaffected by it.
“In recent times, we have seen that banks too were not issuing ₹2,000 notes and the volume of such notes got reduced and limited only to non-banking channels. So the apex bank’s decision was targeted at sucking out these remaining notes in circulation from the system and probably try to reduce the unaccounted money in the hands of the people,” the KASSIA president observed.
The KASSIA also counselled the industry fraternity and the small entrepreneurs not to confuse this withdrawal with demonetisation, stating that while the latter had temporarily affected the economy, the latest move seemed more like a clean-up of the unaccounted money in the system.
However, a portion of the micro, small and medium enterprises sector, which sees an incentive in cash-based transactions, could still be impacted, he acknowledged, and said the only way out was to move towards non-cash transactions.
Gopal Reddy, president, FKCCI, said: “The ban of the ₹2,000 note may not impact the bigger players in the industry. However, small traders who buy their raw materials or pay for their other purchases will be affected. Anyway, it is good that the ban comes with a time frame of exchanging such notes.”
Real estate agents have also said that the impact of withdrawing the currency will not have any impact on business.
Manoj R. Sastry, who runs Balaji properties in HSR Layout, said: “So far, we have not seen any impact due to this decision by the government. Most payments are done online, so there are no issues for major real estate brokers.”
