Demonetization is the process of devaluing a piece of currency to zero. In other words, changing the value of a particular denomination of currency to nil. Making it a piece of paper with absolutely no value greater than a regular piece of paper.
We can judge the decision of Demonetization by the Government based on the industries that get affected the most by it. Firstly, the small retail shops, who thrive on cash flow and don’t really have the facility of Swipe Machines, including the small vendors who sell vegetables and fruits on the street.
Apart from this, the industry which gets hit the most is certainly Real Estate. So here’s a little on the impact on the Real Estate industry. It is a known fact that a big chunk of real estate runs on cash. Most of it in black as well. But some of the points that need to be noted are that many people who were all ready for their investment post 8th November have now either just stopped in their tracks and reconsidering or have just scrapped the idea itself because let’s face it, not everybody will be able to make their investment through white.
So yes, chances are there will be a slight decrease in prices for a while, but I’m guessing that’s until the whole demonetization has run its course entirely.
On the other hand, the people who look for Rentals for No Brokerage can continue to do so due to the rise of Online Technology and be visiting websites such as PinClick(.)com, so not much change over there, except maybe unless they’ve not had their old notes exchanged ;).
So in the short run, there will most certainly be a decrease in prices until the demonetization dust settles, but later on, in the long run, I believe everything will be back to how it was and will continue the same way.
It’s hard to call out the Pros and Cons, but in regards to the demonetization plan in general in all honesty, I understand the country’s citizens are facing a lot of pain, due to those long lines in the queues, but I like this decision. I think it will bring about some form of change, but simultaneously I hope that the country develops in regards to infrastructure as well due to the huge amount of tax that is collected by our Government. Next time, if such a decision needs to come out, let the government make some preparations or be aware of all the potential problems that can arise due to the decision.