The disruptive impact of the demonetisation policy is most evident in Varanasi’s sari-fabric industry.
Prime Minister Narendra Modi’s decision to demonetise high-denomination notes has delivered a crippling blow to the uniquely Indian system of financing business. This outcome is ironic for the prime minister whose party, the Bharatiya Janata Party, is forever engaged in extolling India’s contribution to knowledge in ancient times and singing praises of Indian culture.
From Delhi to Varanasi to Kolkata, there isn’t a sector that has not become sluggish because the demonetisation policy has cut off the flow of working capital to small and medium enterprises. The largest component of their working capital was in cash, popularly perceived to be unaccounted or black money.
The disruptive impact of the demonetisation policy, which became effective from midnight on November 8, is very evident in the sari-fabric industry of Varanasi, the prime minister’s constituency. A clutch of businesspersons provided insights into Varanasi’s system of financing business.
Based on trust and intricate knowledge of the local market, Varanasi’s system can be best explained through an illustrative example.
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