The demonetisation of high currency notes has affected businesses like small traders, FMCG and real estate temporarily, but it will boost the economy in the long run, a trade and industry body said here on Thursday. “Definitely, there is a glut in the market and people don't have money. So, trade, particularly, small traders and industry are getting affected. I feel it's a very temporary phenomenon. Because, it is a shock treatment,” Ravindra Modi, President, Federation of Telangana and Andhra Pradesh Chamber of Commerce and Industry (FTAPCCI), told PTI.
“Unless, it would have been like this, it would not have got the desired effect also,” he added. Describing demonetisation move as a ‘very good step’ to bring out black money, he, however, said the government needs to address the issue of cash crunch and common people getting affected by it.
The demonetisation would, however, boost the GDP growth in the long term at least up to one per cent, he said. “Then in long term, this will affect very positively. It will add at least one to 1.5 per cent to GDP growth. Although, they are claiming 1.5 to 2 per cent. Definitely, it will increase,” he said. The banks are now flush with money in the wake of demonetisation and it will give a push to the economy with lending increasing substantially as a consequence, Modi said.