Demonatisation Estimated To Cost Rs 1.28 Lakh Crore To Indian Economy: Centre For Monitoring Indian Economy

The Logical Indian

November 28th, 2016 / 4:26 PM

Cash Based Economy

Source: business-standard | Image Courtesy: qzprod

Cash Based Economy

The cash-based economy is unable to conduct  transactions due to a cash crunch. Business and financial obligations are not being met, and people are failing to liquidate stock and receivables into cash. The Centre for Monitoring Indian Economy (CMIE) has estimated that the cost of demonetization to the economy has been Rs 1.28 lakh crore. This price does not include factors like indirect costs, cost derived from supplying chain, etc.

Rs 61,500 crore will be borne by the enterprise sector as the highest direct cost and it covers all the goods and services producing business enterprises.  Everyone involved in the supply chain be it farmers, input suppliers, transporters, retailers, stockists, manufacturers, retailers, malls and other retail outlets are covered under the goods and services providing to a business enterprise.

The impact of a broken supply chain plays out over several quarters. It also affects the capacity utilisation of manufacturing companies and jobs, but the immediate consequences fall upon sales because of a decrease in liquidity.

The CMIE has also estimated that the cost of people standing in long queues, losing wages for that period is Rs 15,000 crore. This includes the expenditure on photocopies of identity proofs required for the transactions.

The project cost to the government and the Reserve Bank of India is around Rs 16,800 crore. It includes four types of cost. The printing cost of new currency notes, transportation cost to all bank branches, paying the highway toll agencies who have been asked to keep their stretches toll-free, and lastly the human resource and overheads to manage this operation.


Contributors

Edited by :

Share your thoughts..

Related Stories

Bengaluru: In 4 Yrs, BBMP Has Lost An Estimated 400 Cr On Fictitious Garbage-Collection Vehicles

Kerala: Eleven People Dead Due To Outbreak Of Nipah Virus, Centre Monitoring Situation

Budget

Stalled Budget Sessions In Parliament Cost India Rs 190 Crore

Foreign Direct Investment

Centre Gives Nod To 100% FDI In Single Brand Retail, Opens Economy For Global Players

Monitoring Govt Schemes Using Technology; How Andhra Pradesh Govt. Pilot Project Is An Example For Other States To Follow

Karnataka Government Gives Nod To Build Steel Bridge

Despite Protests, Karnataka Government Gives Nod To Build Steel Bridge That Will Cost Rs 1900 Crore And 800 Trees

Latest on The Logical Indian

News

Kashmir: Tension Intensifies After 7 Civilians Killed In Firing By Security Forces On Protesters

News

Raghuram Rajan Asks Farm Loan Waiver To Be Abolished; Says It Doesn’t Reach To Those Who Need It

Awareness

How Agriculture Can Help In Mitigating Climate Change

News

Assam: One-Horned Rhino Found Dead In Kaziranga National Park; 6th Rhino Killed This Year

Awareness

Hands Of These Two Men Were Chopped Off For Attempting To Escape From Human Traffickers

Awareness

TN: Angry With Her Father For Not Building A Toilet, 7-Yr-Old Girl Complains To Police

x

Stories that deserve attention, delivered to your inbox!

Handpicked, newsworthy stories which deserve the attention of a rational generation.