Business at the usually bustling markets of Indore has been severely hit after the demonetisation of Rs 500 and Rs 1,000 notes.
Indore, being the commercial capital of the state, attracts people from neighbouring districts, especially from rural areas post harvest season. However, retail outlets selling electronic goods, garments, utensils and other such non-essential items have reported a sharp drop in sales in the past four days.
“Usually, at this time of the year the markets are crowded with people from Indore and outside pouring in. However, the sales have nosedived since Wednesday,” Dharmendra Choradia, a garment shop owner in Cloth Market, said.
The outlets selling consumer goods such as TV, refrigerator and washing machines looks more dismal. “My employees are spend time watching TV. There is hardly any customer,” Dilip Ramani, a dealer in MTH Compound, said.
The jewellery sales that had shot up soon after Prime Minister Narendra Modi’s announcement on Tuesday, have also dropped as the gold prices have gone up steeply.
The biggest sufferer will be Indore’s real estate industry that controls roughly around 50 percent of the entire state’s business. Atul Jhanwar, Indore unit secretary of CREDAI, an association of builders and brokers, admits there would be a short-term setback.
However, members of industry bodies and economists believe the decision will not have an adverse impact in the long run.
“After a short period of pain, when the economy adjusts to the sudden withdrawal of cash, we could expect a much stronger one. High level of cash usage tends to slow down the flow of money through the economy. As we transition to a greater usage of financial technology for payments, spending will rise, leading to additional economic growth,” Chandrajit Banerjee, director general of CII, said in a statement.
Meanwhile, chaotic scenes at banks and ATMs continued for the fourth day on Sunday as cash-starved people queued up to exchange and withdraw money.