Key Points
There could be some adverse impact on small businesses, which hold high-denomination notes for managing daily transactions, according to Nomura's India Economist, Aurodeep Nandi.Agencies..
The withdrawal of 2,000 notes would not significantly impact consumption patterns, but certain high-ticket items, like gold, and high-value white goods, may experience a shot in the arm temporarily, economists told ET..
Bhardwaj noted that the withdrawal is unlikely to change patterns of spending in the long run.. "Discretionary spending especially in urban India on some durables and services could see a spurt, in a bid to utilise the stock of 2,000 notes..
"Over a longer term, the sectors with large-ticket cash-based transactions could see more transparency as it could become difficult to deal in large volumes of cash in smaller denominations, which will be overall beneficial for the economy by way of higher tax collections and better compliances," he pointed..
Madan Sabnavis, chief economist, Bank of Baroda also noted that there may be a temporary disruption for cash-incentive activities like elections, real-estate, social functions like marriages, but overall the move is not expected to have any impact on the economy...
