IT Industry Speaks on Demonetization of 500 & 1000 Currency Notes

Quote by Sudip De, Director at DOEL International Pvt Ltd.

sudip-de-director-doelDOEL applauds for the step taken by PM Narendra Modi to curb corruption.A Master Stroke to bottle up both terrorism and black money stashed in gunny bags and lockers.  It will affect the traders who carry in processors, memory storage and flash products. Otherwise IT and mobility are pretty settled business through national distribution. All cash businesses would be hit. Legal distribution through NDs & RDs would thrive to topple the grey market; trade would be hit in the short term but in the long term people would learn to do their business through cheques or net banking. I just hope the daily wage earners are not hit. Most of them have not been able to decipher the entire process clearly and they should be educated. I prefer sudden jerks and so am happy the way it has been done. Any bad habit goes off in a jiffy. It is not planned

Quote by M A Mannan, Country Manager, India at Corsair.

m-a-mannan-country-manager-corsair-memory-india-pic1This is a great initiative by the government and a bold step towards future. Though it came as a surprise but everyone should appreciate and support the initiative to flush out fake currency, black money from our country. Biggest plus is at least this government is initiating some kind of actions against black money which is good for the economy. Minus from this development is to wait and watch, as money demonetization has happened before in history but with no effects on black money. Suggestions could be many but when it is done it’s done. It should have been done in a phased manner to start with 1000Rs and then to 500Rs.

IT industry won’t be affected much by this step as all business ethics are followed in IT industry. For imports we do it thru banks so not much changes. It won’t curb grey channel market but will surely have an adverse effect on the products which are promoted by grey channel. Money transfer would be a daunting task for grey guys.

Quote by Sanjay Patodia, CEO at Galaxy Office Automation Pvt. Ltd.

The ban on big currency notes will definitely going to give a positive boost, but only in the short term. The government is allowing people to deposit money into the system, but also reserve the right to audit it. There is still not much clarity on some points like the penalty for not depositing money in a given time frame and the rates of the penalty for late deposit.

The other thing to look forward is how the government can sustain this impact. With the arrival of new big currency the government should make efficient plans to curtail on cash money. 

Although, this step will help in increasing cash flow for the banking system, which is currently facing a lot of deficit issues which further can lead to help businesses and industries. Overall all the industries will get benefitted since liquidity will come directly into the banks, which will lead to a rate reduction and hence more cash will flow into the market as part of the loan. This will create a positive impact on corporate who can get more liquidity for newer projects and investments.”

Quote by Rajan Chellappan, Managing Director at Optiserv Solutions Pvt Ltd.

We will call it a calculated step by Government of India towards the economic growth of the country. This step will help in making cashless transactions a mainstream. However, this will not going to affect IT sphere, particularly the organized IT industry, where all the transactions are done through banking systems only.”

Quote by S Sriram, CEO, iValue infosolutions

sriram-s-ceoThis is one great move by the government of India. It will serve the country on the long run. The major implications will result in faster GDP growth, inflation will fall, and products will become more affordable which will fuel the demand and further growth of the industries.

On the other hand, inflation will fall along with stronger growth. Products will be more affordable including large ticket items like housing. Once cleaned up, further generation of black money will be dramatically cut down and more transactions will happen electronically instead of cash and hence the counterfeit will reduce. There won’t be much of an impact on the IT industry  as they prefer purchase and sales through banking system only.”

Quote by Rohit Agarwal, CEO at Astrum Electronics India Pvt Ltd

rohit-photoFirst it was like a big shock but, in reality this is really going to be of great help to nation and its economy in long term, for short term there will be chaos and tightness in liquidity. For IT industry there is not going to be a major impact as our industry works mostly (around 90%) in bill and there is only less component of it which is in real cash, if we talk about branded materials. But those who are not selling brand and are importing material from China it will be big challenge for them as there 90% business in cash. The main issue will be at the consumer level as most of the people are buying in cash and people are not habituated to use of debit and credit card so sales will suffer in short term. This move will help brands to grow and helps in curbing the fake, grey market, and Chinese import cash sales. Most importantly, I think the way money is going to be sucked in the system there is no way to get liquidity back in the system immediately. I mean for a person who is salaried or doing his business 100% in bill he will also have a cash crunch. There should have better availability for replacing old currencies, as there is limit for withdrawal of money, which can cause trouble for common people to manage day to day expenses.

But, this move is designed to lock out money that is unaccounted for – known as ‘black money’- which may have been acquired corruptly or being withheld from the tax authorities. So we are flattered by this ‘Master Stroke’ to reduce corruption, black money and promotion of digital economy.”

Quote by Satish Kumar V, Country Head at DMX India

satishWe are proud of this bold decision taken by the Indian Government. The amount of planning and systematic preparation is appreciable and the daring step is worth lauding.

As per now, there should not be any major impact on the general IT sector as we have a highly structured business to deal with. In fact, this is a welcoming opportunity for the IT industry as the dependency on the banking & online transactions and, communications is set to grow exponentially. This development would help hardware / software / services players to perform smart business, maintaining a transparent track record. It is also a boost to the start-up segment that can now take the cashless transactions and related shopping / purchase related experience to new levels of comfort with their innovative platform & service idea.

Right now we only see the positives from this measure by the government & Reserve Bank. Firstly, this step can bring grey market commodities / illegal money lending / money laundering etc., under control which is otherwise unmanageable. Furthermore, it can alleviate the lives of our farmers, artisans and similar other sections. By actively participating in micro and rural financing through official means, they can actually come out of the clutches of money lenders & middle men.

While the demonetizing announcement with immediate effect is the highlight of the idea, the government and the banking sectors has to take the responsibility to come to the rescue of the general population to ensure minimal confusion and more normalization of day to day operations as well as facilitating industry specific needs.

Overall, the gradual transition starting with Aadhaar/ PAN/ Bank account linking, penetration of digital wallets and online services, multiple instances to declare black money followed by back end preparation of new currency will definitely bring evident changes in the governance.”

Quote by Biswas Nair,Founder & Managing Director at Inspirria Cloudtech

biswas-nair-ceoI feel the sense of surprise was important for this kind of strategic action. There couldn’t have been any better way of bringing about this change. The demonetization of high-value currency is a bold and impactful change taken by the government to curb the menace of black money, corruption and counterfeit currency notes, especially a surgical strike on the so called parallel economy.

This decision will be hardly impacting businesses in the IT industry as most of the transactions are done digitally. But, certainly the largest employee base in the IT industry may feel the inconvenience in near future because of the pull out of the 500 and 1000 currency notes. We need to understand that these young employees are one of the most avid spenders too, albeit some of them have moved to debit and wallet money. The demand for digital money will eventually lead to more use of plastic and e-wallet money, providing a great boost to the e-wallet companies like PayTM and Citrus as they will drive more adoption from the fence sitters.”

The biggest plus is that people who have this so called black money will be in serious trouble as the amnesty period is over with the IDS scheme on Sept 30 and if they declare the wealth now they pay 60% tax compared to 45% through IDS 2016. Also, the reality bubble will be over and reality as a source to channelize black money will also end bringing in parity with the realistic prices. I also hope that the security measures for these new currencies are more stringent to have any future worry of fake currency.

There would be a little inconvenience for commoners for their daily consumption for the next few weeks till the new currency comes into circulation. Also, there would be an issue with foreigner visitors who have already converted their currency into old notes and may not have much option left, though I guess they will still have their debit/credit card available for usage..  Also, there is no clarity if the Indian tourists who are currently travelling overseas can exchange these invalid monetary currencies in overseas countries.

We hope that the ATM’s and branches should quickly flush-up with the new currency and restoring normalcy. The media (social and traditional) were well used to communicate the information to the population at large and hope the same has been done through AIR and Panchayats to reach out to the rural audience too.”


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