Prime Minister Narendra Modi in his first address to the nation post the Demonetization did not give any assurance about when the cash crunch will end and the limits on cash withdrawals will be lifted. On the other side, Economists and Financial experts predict a long-term advantage of demonetization
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But then it comes with a rider that India has to wait at least until March 2017 to see the end to the liquidity crunch. The demand is already slowed down due to the cash crunch and consumption is at all-time low. One more quarter of these troubles will mean that there will be a huge negative impact on the economy.
Usually, if agriculture suffers, there are industries and services to rescue the economy but this time, Demonetization has severely affected the sectors of industry and agriculture leaving no scope for economy revival. On the other side, sectors which involve huge labor are also affected with no work in sectors like real estate.
According to an estimate, more than half of the 2 Lakh Plus ATMs across the country are inactive now. Even in those working, there is this problem of Cash always. If they are streamlined, they would sustain the purchasing power of the people to some extent. Coming quarter is going to be tough.
