There is a general perception in Mysuru that the withdrawal of ₹2,000 currency notes from circulation will not have a major impact on the commoners or the business and industrial community given their low circulation in the market.
Unlike the demonetisation in 2016 when the lower denomination of ₹1,000 and ₹500 ceased to be legal tender it is not so in the case with ₹2,000 notes.
‘’The 2016 demonetization came as a bolt from the blue and took everyone by surprise as even smaller denomination notes like ₹500 and ₹1,000 which were in common use, had ceased to be legal tender. But there is no shock over the withdrawal of ₹2,000 notes as it was long expected and people were prepared’’, said Ravindra Bhat, a member of the Builders Association of India and founder of Foundations Ltd, a construction company in the city.
The 2016 exercise led to severe liquidity crunch and housing projects missed deadlines resulting in severe disruption in the pricing as well. Labour force had to be cut by half due to reduction in cash flow and digital payment was still nascent to absorb the shock.
But not so in 2023 where even the roadside coconut vendors or sugarcane juice vendors have QR code displayed to receive payment through digital means.
‘’People were not prepared to deal with the demonetisation impact in 2016 whereas in 2023 bulk of the transaction is digital. While our payments back in 2016 was in cash, there is hardly any cash component at present but for emergency small-time purchases. Even the labour payment is by cheque or through digital transfer’’, said Mr. Bhat.
Similar views were expressed by members of Mysuru Industries Association and Mysore Chamber of Commerce and Industry. Suresh Kumar Jain of MIA said the move will affect only those who have stashed ₹2,000 currency notes to evade tax. But for the industries in general and the business community it will not lead to disruption as they are all under the GST regime and transaction is all ‘’white’’ with very little dealing in cash.
But Lingaraju, president, Mysore Chamber of Commerce and Industry, said those engaged in commerce and business will deal with currency notes across the counters, and this will have a disruptive affect though it will be minimal. Besides, a significant amount of high value denomination notes are also maintained by businessmen for their daily transactions, he added.
‘’Though the RBI has said that the ₹2,000 note is valid as a legal tender, its acceptance has ceased across counters with immediate effect’’, said Mr. Lingaraju. The general consensus is that the RBI move will not affect the majority of the people and in case of those who deal with high denomination notes, they are better prepared to deal with the situation
