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Shruti @vyasshruti
, 12 tweets, 3 min read Read on Twitter
2 years from #Demonitisation Thread
As an MSME entrepreneurship I have seen a huge change on ground.
Most of my 50+ staff preferred cash salary.
In the months after demonetisation we could convince everyone for salary in bank accounts via NEFT .
Most had accounts already.
Many opened accounts and even took ATM cards which thy hadn’t earlier .
Many have since applied/gotten smaller housing loans etc due to the maintenance of bank accounts and salary entry.
Before GST & demonetisation I would have many people asking for goods without bill.
During the demonetisation I would get calls from many people to adjust their cash on my books. The long term effect however was the scare that it created. The demand for no bill has dropped drastically. GST made it easier for people to claim the credit input .
For example in a recent repair in my office we took bills for smaller goods also like plyboard, fevicol and others . Most these traders never gave bills. But now since whatever is the tax, I will get credit so I ensure I get the Bills. This is happening with many people I know.
The number of Digital payments have increased . Though NEFT was always an option earlier, we also started using it more in past 2 years and have made it a habit. With GST follow up mistakes in invoices and GSTR are informed by our buyers also as the mismatch shows.
Though PayTM benefitted with the demonetisation most, the long term usage of payment apps and UPI is going up. More and more people are paying through e wallets. Most shops I see now have athe PayTM accepted displayed prominently. Shops that never wanted card machines, applied .
With digital payments of salary, it becomes impossible for employers to hide payments and more people had to be added to PR payrolls which increased the formalised work force. The fear for huge cash withdrawals and cash in hand in balance sheets was visible in the business.
More people filed ITR fearing the cash deposits made during the demonetisation excercise. The amount of profit shown in Balance sheets was also increased by many I know to justify their huge deposits. This can easily be crosschecked by ITR data .
Many people closed their multiple firms since with GST it was difficult to file many returns. This means consolidated turnover. The old defunct firms who did not apply for GSt got messages from departments that their TIN number is now suspended. This helped clean up business.
Many people who had to migrate to GST were forced to clear earlier notices/ demands etc. The whole C form collection and deposit drama has thankfully come to a closure. It was a nightmare. It’s simpler to Bill and take credits .
You may argue on the way #Demonestisation was handled but saying it had no impact on Indian business and it’s practices would be silly. It changed the way Indians looked at business, cash and cleaned up the system on a psychological level .
I am no economist but as a Fine Arts person who runs her own business , I have learnt enough to tell that it worked. I understand my numbers and balance sheets enough to believe that it shook people more than we care to admit. Specially the ones with millions in cash.
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