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Demonetization: Chaotic Queues get longer as People scrambled for Money after Monthly Salaries got Credited in Bank Accounts

The supply of notes from currency chests has failed to keep pace with the demand for cash

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Customers line up outside a New Delhi bank to exchange outdated currency or make withdrawals. (A. Pasricha/VOA)

NEW DELHI, November 30, 2016: Chaotic queues got longer on Wednesday as people in large numbers scrambled for money after monthly salaries got credited in bank accounts — the first since the high value currency was scrapped, causing an unprecedented cash deficiency across India.

Most private companies in India credit salaries to their employees on the last day of a month even as labor laws allow wages to be disbursed on any day before the 10th of the next month.

 As soon as the salaries were credited, millions of employees began queuing up outside banks and ATMs across the country to withdraw cash to meet their monthly needs and pay their domestic helps, drivers and clear their monthly grocery and other bills.

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Since the supply of notes from currency chests has failed to keep pace with the demand for cash after 86 per cent of currency in circulation was declared illegal on November 8, the chaos worsened on the payday as more households needed cash than earlier.

Several banks ran out of cash within hours of opening. Some bank officials complained that they were getting cash much below what they need.

Bankers said they were rationing withdrawals so that more customers were catered to.

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People were seen in bigger numbers waiting to withdraw money. Many were annoyed by the rush and the arbitrary withdrawal limits set by banks. And the situation could get worse in the coming days as more number of people will receive salaries.

“I have to pay my maid and grocery bills in cash. I somehow managed to convince my landlord to accept the rent in cheque but I am bound to visit the bank for other payments,” said Vishakha Sharma from west Delhi.

The 27-year-old waited outside a bank for two hours. “It is so humiliating that we have to stand in long queues and beg for our own money.”

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An MNC employee, Yogesh Yadav, said he had come to withdraw Rs 24,000 from his bank account but was given only Rs 10,000. “It’s the end of the month and I am supposed to pay bills. How will I manage?” Yadav asked.

A resident of Krishna Nagar in Delhi, Rahul Chauhan got his salary credited on Tuesday but could not withdraw even after standing in a queue at 3 a.m. on Wednesday.

“By the time my chance to enter the bank came, it ran out of cash.”

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Scenes in Kolkata, like the rest of India, played out no differently. In apprehension of a mad rush, people started queuing up outside banks and ATMs since morning.

“I am in the queue since 8.30 a.m.,” said Sougata Mitra, an employee of a private firm outside a Bank of India branch in central Kolkata.

It was 10.45 a.m. when IANS caught up with Mitra, and already 50-60 customers had lined up.

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The first salary day after demonetization proved haranguing for the maximum city Mumbai where most ATMs ran dry. Desperate men and women drove from one place to another, halting wherever they saw an ATM alive, albeit with long queues.

Though many Mumbaikars have shifted to making certain payments online or by debit/credit cards, there are many bills which need to be paid in cash. Many feared that the situation could worsen on Thursday.

“Everything has come to a standstill. Worse, many online payments systems are jammed due to the sudden heavy traffic and payments are pending,” fumed a pharmaceutical consultant P. Venkataraman from Kandivali, a Mumbai suburb. (IANS)

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Demonetisation Anniversary: BJP acts cheeky, releases new video showing Frustration of ‘Corrupt’ Politicians following Demonetisation

The one-minute video, which is now going viral on social media, has already been re-tweeted more than 2 thousand times since it was released on November 7, on the eve of demonetization move.

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Demonetisation Anniversary
Screen grab of the sarcastic video released by BJP to mark Demonetisation Anniversary. Twitter

New Delhi, November 8, 2017 : On November 8 2016, every Indian citizen sat glued to their TV screens as Narendra Modi was set to make a big announcement. Outcome? The Indian Prime Minster shocked the entire nation with the introduction of Demonetisation, a move that was to change the very foundation of the cash-dependent Indian economy.

The much-debated move by Modi garnered the attention of several well-versed economists from the country and abroad, alike. While some people willingly welcomed the move, there were others who stood in staunch criticism.

As the move completes its first year, the Bharatiya Janata Party (BJP) is set to observe November 8 as ‘anti-black money day’ to celebrate Demonetisation anniversary in the country.

On the eve of the Demonetisation anniversary, the BJP released a cheeky video claiming to depict how ‘corrupt’ politicians have been criticizing the move, as the nation won following demonetisation.

WATCH BJP’S TONGUE-IN-CHEEK VIDEO

In the video, the BJP attempted to take a dig at corrupt politicians, who have been criticizing PM Modi’s Demonetisation move.

In the video, a woman, playing the character of a frustrated, corrupt politician can be seen going on a rant over PM Modi’s note ban initiative, which was aimed to combat black money, corruption, fake currency and terrorism.

The video ends with a voice-over saying demonetisation has not only brought out this frustration of corrupt citizens, but also black-money, claiming that almost 99 per cent cash which was previously lying hidden with people has now entered the banking system.

The one-minute video, which is now going viral on social media, has already been re-tweeted more than 2 thousand times since it was released on November 7, on the eve of demonetization move.

Ahead of the Demonetisation anniversary, the last few days have witnessed several leaders present their opinions on PM Modi’s demonetization move.

Finance Minister Arun Jaitley called PM Modi’s note ban initiative a ‘watershed moment’ while Piyush Goyal, Minister of Railways believes the move has pushed India towards a more transparent economy.

However, the move is being criticized by ex-Prime Minister Manmohan Singh calling it ‘irresponsible’. The opposition maintains that PM Modi’s note ban initiative has caused reckless damage to the country and the Indian economy.

On Demonetisation anniversary, the BJP is set to observe November 8 as ‘anti-black money day’, while opposition leaders are set to observe the day as ‘black day’ in protest against the note ban initiative.

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Small, medium firms were limping back when GST added to pain: Stakeholders (Note Ban Series)

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Small, medium firms were limping back when GST added to pain: Stakeholders (Note Ban Series)

New Delhi, November 3, 2017: The backbone of India’s manufacturing sector — micro, small and medium enterprises (MSMEs) — had not yet recovered from the demonetisation move when the Goods and Services Tax (GST) came in to add to the pain, according to industry stakeholders.

“The base of the MSME pyramid is comprised of informal sector, which has traditionally done business in cash. With withdrawal of cash, this market seized up for a quarter or so. They (MSMEs) are limping back to normality,” Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small and Medium Enterprises (FISME), told IANS.

“The recovery is slow because of the new disruption in the form of GST. In the short term, there could be loss of business opportunities because of lack of capital in the informal markets,” he said.

Bhardwaj said that the housing sector, which had more than 60 product categories linked to MSMEs, was drastically hit, both directly and indirectly.

According to D.S. Rawat, Secretary General of Assocham, except for some payment gateways, most of the sectors lost out.

“The impact of demonetisation would have evaporated, but the GST roll-out issues are being braved by some sectors, particularly the SMEs and the traders,” Rawat told IANS.

In the Economic Watch report by Ernst & Young for September 2017, demonetisation has been blamed for an adverse impact on the economy in the short run, as its “benefits are yet to overtake” the costs.

“The government and people at large did have to bear considerable costs in the immediate aftermath of demonetisation. Some of these costs may be difficult to quantify, but objective evidence of the short-term costs is available in at least some important dimensions,” the report said.

“There was an erosion of growth, output and employment,” it added.

The overall economic growth is still contested, however, as some argue that the downward spiral in gross domestic product (GDP) growth preceded demonetisation.

“Though the GDP growth has been lower post the exercise, it will not be fair to conclude that demonetisation was the only factor responsible for this. The growth had started slowing right after the third quarter of 2016-17 and the trend continued post-November as well,” said Ranen Banerjee, Partner-Public Finance, Economics and Urban, at PwC India.

Others like the EY’s report indicate that demonetisation resulted in a “tangible adverse impact” on GDP growth.

“Real GDP growth has been falling steadily quarter after quarter since the fourth quarter of FY16, when it was nine per cent. It fell to 5.7 per cent in first quarter FY18, a decrease of 3.3 percentage points,” the report pointed out.

“The two quarters that can be considered as the demonetisation quarters in FY17 were the third quarter of FY17 and fourth quarter of FY17. In these two quarters, the GDP growth rate fell to seven per cent and 6.1 per cent, respectively.”

It mentioned that the downward trend in growth preceded demonetisation and was largely caused by an investment slowdown.

On the industrial production front, in December 2016, the Index of Industrial Production (IIP) had contracted by 0.4 per cent from a 13-month high of 5.7 per cent reported for November.

However, it rose 2.7 per cent in January 2017. The latest IIP figures for August showed that factory output grew 4.3 per cent against the same month last year on the back of robust mining and electricity sector growth.

According to the Ministry of Statistics and Programme Implementation, manufacturing output in the country in July 2017 had grown marginally by 1.2 per cent.

“The event clearly pushed the economy towards a higher degree of digitisation and financial inclusion. Accordingly, the digital finance sector seems to have gotten a push while over the longer term financial services should be the biggest gainer,” said Anis Chakravarty, Lead Economist, Deloitte.

(Rohit Vaid can be reached at rohit.v@ians.in)

(Editors: The above article is part of a series of demonetisation stories leading up to November 8)

–(IANS)

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5 Apps Which Make Millennials Spend Money Wisely!

These finance apps may help the millennials in managing their expenses in a better way.

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Millennials
Apps which can help Millennials save money

Millennials are leading their lives in the “tech age”, where they have their own set of generation problems. Inflation has been a common problem of all the generations, but Millennials altogether have a different approach to life. The young adults of today are much more carefree. Their expenses are not just limited to home, family and food. From going on regular vacations to spending money in hip restaurants, they want it all. Keeping all these factors in mind, it becomes necessary to set meager budgets for all the planned luxuries and at the same time increase your savings as well. This may sound difficult, but the digital era has made it easier. Below are five finance apps which would manage your expenses!

  1. Cash Envelopes! 

Keeping a strong will is tough if you always find money in your wallet. This is a world-wide problem. The solution for it is to decide your budget for various expenses and keep them inside envelopes. An excellent savings app, Mvelopes, has expertly executed this idea with the help of technology. This way, if anyone savings envelope gets vacant, you can either wait for it to refill or take money from other cash envelopes. These envelopes will get connected to maximum four bank accounts.

2. ‘Balance’ Your Way

An app called Balance is at the rescue of millennials. It helps to manage money effectively so that one can save a good amount. It has recommendations on habits of expenditures in the form of ‘recipes’. The app streamlines the documentation processes in investments; thus, making an individual aware of the risks linked to it.

3. Keep a track on money spent

Sometimes, we may just get reckless and spend our cash without keeping in mind the expenses. To control this behavior is of utmost importance. An app called Money View would help you maintain a record of all the payments you made. It also tracks the dates of your bill and never lets you miss a payment deadline.

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4. Sharing budget

Setting a good budget will better your spending habits. And, the Google Budget app helps you to understand better spending habits. It is quite like Mvelopes, except that it also facilitates sharing these budgets with close relatives. This app taps all types of payments, users are making from the connected account.

5. Tracking Your Overall Financial Position

Since Millennials grew up in the generation when technology witnessed a boom, they are expected to handle their bank accounts digitally without much panic or mulling.Mint app keeps track of your expenses, cash and income inflows. This leads to constant reminders in your mind about how much money you should or should not spend. An integrated amount of your savings also helps you in making better and bigger future decisions.

by Megha Acharya of NewsGram.