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

The Logical Indian

November 28th, 2016

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.

Share your thoughts..

Art Has The Power To Transform Lives

Related Stories

Budget

Stalled Budget Sessions In Parliament Cost India Rs 190 Crore

Unemployment At An All Time High With 3.1 Crore Indians Without Job: Report

Even As Fuel Prices Rise, Govt Earnings From Petroleum Products Increased 3 Times In Last 5 Years: RTI

Pay Us Rs 577 Crore For Demonetisation Loss: Govt Printing Presses To RBI

99% Demonetised Currency Back In System, Says RBI Report: Where Is The Black Money?

RBI Dividend

Nine Months After Demonetisation, RBI’s Dividend To The Govt Is Halved From The Previous Year

Latest on The Logical Indian

News

BJP Youth Wing Leader Boasts About Setting Fire To Rohingya Camp In Delhi, Complaints Filed

Environment

Kerala: This Bank Goes Beyond Its Duties And Helps 800 Villagers Learn Organic Farming

Legal

Seven Opposition Parties Move Impeachment Motion Against CJI; Submit Petition To Vice President With 71 Signatures

News

Gujarat HC Acquits Maya Kodnani From Naroda Patiya Case, Worst Massacre Of 2002 Gujarat Riots

Get Inspired

Manipuri Man Missing For 40 Years Reunites With Family Thanks To YouTube

World Affairs

Pilot Safely Lands Plane After Mid-Air Engine Blast, Saves Lives Of 143 Passengers