As per a recent survey conducted by the State Bank of India – India’s leading nationalised bank; it has been revealed that the small businesses have seen a gradual drop in the business market due to the demonetisation. With as many as 30 percent respondents claiming that their business has dropped by half, around 23 percent of the respondents claim that the drop in their small businesses was about 40-50% after demonetisation struck the country.
The main reason behind this downfall in the small business sector accounts to the supply of only 2000 INR currency denomination notes without the proper flow of 500 INR denomination notes in the nation. This has resulted in great chaos as there was a lack of proper flow of the currency notes in the market to provide change to the 2000 INR denomination notes. Even after all the chaos and hassled environment, the survey revealed that as many as 63 percent of the respondents support the cause of demonetisation for the betterment of the condition of the entire nation.
The State Bank of India in its Ecowrap report said that the overall downfall in the business is less than 50 percent of the majority of the small businesses which have been impacted by the move of the demonetisation. The informal roadside vendors and the business owners of the construction sector have been hit the worst. There has been witnessed less drastic impacts in the chemist shops and the automobile industry which permitted digital modes of transaction post the demonetisation phase.
As far as the textile industry is concerned, the shopkeepers who had retail business were more affected by the demonetisation move than those in the wholesale business. The jewellery and the gem business have also been hit hard by the declining sales due to demonetisation.