Voice Of The People

Vineet Nanda, Founder of SIFT Capital talks about Demonetization

Pradip Bhandari, the Founder of Jan Ki Baat, in a conversation with Vineet Nanda, the Head of one of the famous financial and wealth management company, Sift Capital; Nanda enlightens the common citizen in the minute details of demonetization. Banks, opening up from the 10th of November, would be slightly overburdened in the upcoming weeks due to the increased number of deposits and withdrawals. The role that these banks will play in Narendra Modi’s scheme of things is vital; only with the services and help of banks, will the citizenry be able to survive during the transition period which is accompanied by a certain set of inconveniences. The market has been marked as subdued till 2019, therefore, setting a good background for investment during demonetization. Contrary to claims that there’ll be a hike in prices, demonetization has indirectly increased the affordability of masses, a good symptom for the nation’s economic growth. Though this isn’t an overnight process, it would align the consumer’s interests with the market’s. Better compensation, better bonus and therefore, better wages altogether would all factor in, in the greater affordability. Demonetization’s primary purpose is to increase the government’s revenue by widening the tax-bracket. It would invoke short-term volatility after which things would normalize. 45-50 days is the expected amount of time required for this normalization; this period would include conversion of currency and restart the consumption cycle. Dipped sales, decline in purchases, loss of human time capitals are some of the elements that would occur in this transitory stage. Nanda added that though digitized payments are rare in India, due to the mental peace of mind Indians associate with cash, gradually, the cash component within the structure would reduce. Any possibility of a profiteering venture during demonetization should be treated as an isolated incident- there should, ecologically, no hike in prices as demonetization, in a sense, since demands would decrease, is an anti-inflationary move.

The 7-8.5% consistent growth is the ideal percentage for an economy the size of India. Expectations beyond it would be unrealistic. Since the recovery rate of infrastructure is low, a massive change there, too, is unconceivable.

The accumulators of black money have a lot to fear because of the demonetization move: “All genuine businesses are safe.” Disruptions in everyday schedule of people, though worrisome, are transient. These adjustments, novel but momentary, would set the tone for a developed India.


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