How Will The Rs 500 & Rs 1000 Note Ban Affect Your Local Momo-Wallahby Kasturi Roy | Thu Nov 10 2016
As everyone is going into panic-mode, the demonetisation of 500 and 1000 notes has become one of the biggest stories that we are following on our phones, laptops, radios, television and everywhere else. While the note ban has affected us all in different ways, it seems that the hardest hit are your local kirane-wala, hawkers and domestic help.
So we prepared a bunch of things you can do to make the process easier for them. This is the time to come together for those who help you every day, no?
What Does The Note Ban Say
To summarise the note ban, this is a policy decision made to make sure that black money and unaccounted money comes back into circulation in the economy. Larger notes are more used to finance corruption and fund terrorism according to PM Modi. The demonetisation involve the decommissioning of 500 and 1000 rupee notes and commissioning of new notes in the denominations of Rs 500 and 2000. Over the next month, businesses will find a shortage of hard cash in the economy and we did an analysis of what you can do to help.
Who Will This Ban Affect
Small businesses will find this move pretty harsh over the next month or so. While this is chaotic for bigger businesses, for hawkers and those who deal in hard cash, this will be absolutely painful. People who will be most affected will be thela-wallas, domestic help, people who have cash savings at home, grocers and anyone else working on a cash transaction model.
Those not having a bank account or a verifiable ID will also be hard hit.
How Will This Ban Affect
- For hawkers, there will be a dip in incoming business due to lack of cash and disposable income with customers. They will also have to pay tax on every product they buy now due to more structured payment processes and thus, profits will get hit in the process. This will be a short-term dip but enough to wipe out businesses.
- For women who have cash saved into money-banks or domestic help who don’t show income or pay applicable taxes, exchanging money will be a further hassle.
- Those without bank accounts or don’t have verifiable IDs, the process of getting one made will take a lot of time, by which time, there will be a lack of money. A lot of ignorant folk might also get swindled or given Rs 500 and Rs 1000 notes that they won’t be able to get changed in time.
What Can You Do To Help
- Take your house-help or driver or security guard to the bank with their ID (PAN or Aadhaar or License) and get the notes exchanged at a local bank. This person can go themselves too.
- Offer to change the cash savings of your household help if they don’t have accounts or IDs. You can change the cash yourself and give them the new notes after withdrawing from your ATM.
- If they have larger amounts, you can ask them to deposit the cash in your account, for which you need to give a written permission, and they will need an ID. You can then withdraw the money in parts and return it.
- While going to a local grocery or momo-walla, accept their 500 notes in case they offer, because you are in a better situation to get it exchanged.
- Don’t give your decommissioned notes to these sellers, because they may accept it out of ignorance.
- For the long term, you can help them get an account under PM’s Jan Dhan Yojana, which gives them a lot of benefits, here.
- Create awareness or tell them about these policy changes around the note ban, because they might be basing their actions or plans on hearsay and rumours instead of facts.
Do your bit during these trying times for those who help you every day.