How Demonetisation Has Forced Us To Be Austere And Spendthrift At The Same Time
These times call for austerity. Ever since Prime Minister Narendra Modi on November 8 declared in his televised address to the nation that the existing currency notes of higher denominations were turning worthless overnight, Madhu Rana, 33, has been thinking of innovative ways to cut down her spending. Unlike most others, exchanging notes is the least of her concern; her struggle is more towards saving her precious possession of smaller denomination notes.
Data show the currency notes of Rs 500 and Rs 1,000 accounted for 86.4 per cent of the notes in use till March 2016. On the other hand, according to a report by JM Financial, in India, around 95 per cent of consumer transactions by volume are carried out in cash. In terms of value, this stands at 65 per cent. So, after the demonetisation, the general sentiment prevailed that the notes of lower denominations must be guarded with utmost care by whosoever may be possessing them.
So, Rana has stopped spending her money on autos; using public transport is the need of the hour. The picky housewife cares no more about the freshness of vegetables and fruits for which she earlier relied on the local grocer. The superstore veggies are good enough now. The same rule applies when it comes to shopping for other household items, such as milk, eggs, bread, etc — everything is bought from stores that give Rana the freedom to use her debit card. A lot of planning goes into saving every little penny.
“It will cause some hardship to you…. Let us ignore these hardships … In (the) country's history, there comes a moment when people want to participate in nation-building and reconstruction. Very few such moments come in life,” Modi had said in his address. Rana was inspired to face her share of hardship at that time.
But, the homemaker is now well aware of the financial dilemma she is caught in. While she has kept taking out of her hat all the measures of austerity to run the household, the bills are actually seeing a major spike. For instance, her daily expenditure on milk used to be Rs 50; it has gone up to Rs 250 now, thanks to the fancy tetra pack she must buy. She also knows it pretty well the almost rotten vegetables at the superstore are costing her way too much.
And that is not all. Even in a city like Delhi, not every nook and corner has shops that let you use your debit or credit cards. And then, there is a price to be paid if you make your payment through a card (norms have been relaxed till December 30 though) . Sellers have to pay a levy if a transaction is being made using a card, which is usually passed on to the consumer. Rana did not pay much heed when the store staff told her they would prefer her paying in cash. So, this was the catch.
When all this is over, Rana will have to sit and calculate what hit her personal finances took to facilitate Modi's demonetisation move.
Also read:
Expecting Property Price To Fall After Demonetisation Move? You May Be Disappointed