unorganized sector is facing higher burnt of demonetization. The growth of
informal sector has been based on cash transactions. This sector nonetheless
contributed to around 40% capital formation and two-thirds of investible funds.
The agricultural-rural economy is close to paralysis. With the demonetization
the production in the unorganized sector has come to a near halt. In India the electronic transactions by bank
was just around 20% of daily transitions. So in this situation it is quite
natural that people save money in currency for their day to day transactions.
In all of a sudden when demonetization was announced it badly affected the
unorganized sectors such as
Agriculture and related
Retail outlets etc.
all these sectors mainly the transactions were done in currency. So the
demonetization was badly affected their life and it caused to create an
unemployment for certain period of time.
is the one of the most affected sectors. The Nifty reality index closed at
175.2, down 11.60%. It is an open fact that most people in real estate sector play
with black money. With the announcement of demonetization there came a halt in
the real estate sector, leading to the decline in demand in this sector. It is
expected that real estate prices may now see a sharp drop up to 25-30%.
soon after the announcement of demonetization there was a rush to purchase
gold. Local shops have stopped selling gold in exchange of old notes but the
well-established shops were selling the products. For a while it created havoc
and slowed down the economy. In addition to this, recent restrictions imposed
by the government will also affect the sale and the price of gold.
Indian local tourism is very badly affected because the large payment was done
in cash. Slowly it affects the luxury items too as majority of the people use
their undeclared income to purchase luxury products.
the savings with the banks are actually liquid cash people stored. They saved
this money into banks just to convert the old notes into new notes. These are
not voluntary savings aimed to get interest. It means that new savings is only