Demonetisation has even left India Inc. divided on PM Modi's biggest-ever economic gamble

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Exactly a year ago, at 8pm on November 8, 2016 to be precise, India's Prime Minister Narendra Modi dramatically announced on national television that the two highest-denominated currency notes in use would cease to be legal tender a few hours later.

The decision to scrap 86 per cent of the currency in circulation in the then second largest emerging market in the world has not just polarised public opinion sharply, it has also led to mixed responses from India Inc on the first anniversary of demonetisation.

The Associated Chambers of Commerce of India says it stands by its demonetisation verdict -- "Short term pain, long term gain".

Assocham Secretary General DS Rawat says, "Indeed, initially the informal and small scale industries as well as the rural economy was impacted, but now the economy has started getting desired results. Hope in the next 12 months the nation would have achieved the set objectives."

Meanwhile, according to Chandrajit Banerjee, the Director General of the Confederation of Indian Industry, demonetisation was a bold move to shift the economy towards greater formalisation for a more stable and sustainable growth process.

For the industry, Banerjee says: "Demonetisation was one of the means towards a transparent, efficient and competitive economy that is now being ushered in through reforms."

"It contributed to building investor confidence and reassured us that the economic reforms process is heading in the right direction," he adds.

On the contrary, the PHD Chamber of Commerce & Industry says the effects of demonetisation still persists as demand in the economy is still lacklustre and business firms are still not enthusiastic in the production process.

"Though demonetisation of Rs 500 and Rs 1,000 currency notes has completed one year today, the industries have still not recovered fully from the aftermath of unearthing 86 per cent of the total currency," says Anil Khaitan, President of PHD Chamber of Commerce & Industry.

Even as Khaitan appreciates the efforts of the government to stamp out black money from the system, curb corruption and to move towards less cash society, he adds: "Demonetisation drive has impacted the businesses directly or indirectly in terms of impact on demand and sales. The impact of demonetisation has been majorly seen on small businesses as they are highly driven by cash transactions."

Even as demonetisation has left even India Inc divided on whether Prime Minister Modi's cash gamble has achieved what it set out for, demonetisation is certainly going to continue to be hotly debated for quite some time to come.

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