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

Written by :

Edited by :

Related Stories

India Budget

Budget 2019: 1,25,000 Km Of Road To Be Upgraded At Estimated Cost Of Rs 80,250 Crore Over Next 5 Years

340 Infrastructure Projects Show Cost Overruns Of Rs 3.3 Lakh Crore Over Delays, Other Reasons: MOSPI

CAG Report Irrigation

“Deficiencies In Planning, Implementation & Monitoring” In Irrigation Projects Led To Increased Costs: CAG

Narayan Seva Sansthan

With Over 3 Lakh Individuals Treated Free Of Cost, This NGO Is A Saviour Of The Differently Abled

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

Violence Cost India More Than 80 Lakh Crores In PPP Terms In 2017, Claims Report

Latest on The Logical Indian

News

Mumbai: Kids Refused To Play With A Young ‘Muslim’ Girl, These Women Decided To Challenge It

News

“Sorry, We Don’t Have Enough Funds To Make Roads”: Chandigarh Municipal Commissioner

News

K’taka: BJP Minister Calls Congressmen ‘Eunuch’, Muslims Who Voted For Other Parties ‘Anti-National’

Environment

Nallamala Forest Uranium Exploration: Telangana Assembly Passes Resolution To Not Allow Mining

News

Those Who Oppose Hindi As National Language Do Not Love India: Tripura CM Biplab Kumar Deb

News

Amit Shah Faces Brickbats For Raising ‘Hindi As National Language’ Pitch

x

Stories that deserve attention, delivered to your inbox!

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