VAR TALK
IT Industry gives a Thumbs Up to
the Demonetization Move
The demonetizing move by PM Narendra Modi of discontinuing
Rs 500 and 1000 notes has not only took every Indian by
surprise, but it has been lauded and welcomed by the IT industry
by hailing it as a ‘Masterstroke’ and a bold move -
8th November 2016 will go down in
history as a day that Indians will keep it in
mind for a lifetime. It is on this day that a
major step taken by the present government
and RBI is believed to improve the lifeline
of the crumbling economy for better. The
discontinuing of Rs 500 & 1000 notes will
not only help in the long run for the country
to prosper but also have greater implications
like faster GDP growth, bringing down
inflation and products becoming more
affordable which will fuel the demand and
further growth of the industries.
Applauding the move, Srividya Kannan,
Founder, Director – Avaali Solutions says,
“This is an extremely bold and first of its kind
crack down initiative against corruption, black
money and counterfeit currency. It is indeed
commendable the way that this initiative
has been executed with such perfection
(including timing of the announcement,
keeping such a wide initiative under wraps
until announcement etc.). There is no doubt
that in the mid to long run, this will indeed
have a big impact to remove the termite of
corruption.”
Even though this is not the first time
such a move has been made
by a sitting government,
what is significant this time
is that it is built on the JAM
trinity – Jandhan, Aadhar and
Mobile – making it hard for
the country to regress. The
gradual transition starting
with Aadhaar/ PAN/ Bank
account linking, penetration
of digital wallets and online
services, multiple instances to
declare black money followed
by back end preparation of
new currency, which will definitely bring
evident changes in the governance.
“A full-blown war, not just a surgical
strike, has been declared by the Indian
Government against black money. Out of
the current Indian population estimated
at 123 crore, only a minimal fraction of
2.87 crore individuals filed their income
tax return and even lower, one percent or
1.25 crore, paid taxes in FY 2014-15. With
the PM's announcement, the honest tax
payers will get their fair play. The nation's
biggest crackdown will certainly check
black money and cross-border monetary
transactions of counterfeit currency. This
will curb corruption to a large extent and also
ease the life of common citizens,” suggests
Rajeev Jain, Chief Financial Officer, Intex
48
November 2016
www.varindia.com
Technologies (India) Ltd.
Impact on the IT Industry -
The increasingly growing dependence on
ICT right after this scheme gets into action
seems to be getting clearer. Says Anwar
Shirpurwala, Executive Director – MAIT,
“The move taken by the govt. clearly indicates
that we will be depending more and more
on the ICT. This move has been possible
because of the availability of technology
and multiple means of financial transaction.
This also calls for the Govt to further look
for means of increasing IT penetration, thus
enabling every citizen to use technology tools
and services for cashless transactions. Govt.
should continue to give more emphasis on
technology led schemes and programs for the
betterment of the economy growth."
Opines Satish Kumar V, Country Head DMX India, “This is a welcome opportunity
for the IT industry as the dependency on
the banking & online transactions and
communications is set to grow exponentially.
This development would help hardware/
software/services players to perform smart
business, maintaining a transparent track
record. It is also a boost to the start-up
segment that can now take the cashless
transactions and related shopping /purchase
related experience to new levels of comfort
with their innovative platform & service
idea."
Rohit Agarwal, CEO - Astrum
Electronics India comments, “For the IT
industry, there is not going to be a major
impact as our industry works mostly (around
90%) in bill and there is only less component
of it which is in real cash, if we talk about
branded materials. But those who are not
selling brand and are importing material
from China, it will be big challenge for them
as there 90% business in cash. The main issue
will be at the consumer level as most of the
people are buying in cash and people are not
habituated to use debit and credit card so sales
will suffer in short term. This move will help
brands to grow and help in curbing the fake,
grey market, and Chinese import cash sales.”
Agrees Biswas Nair, Founder &
Managing Director - Inspira Cloudtech,
“This decision will hardly be impacting
businesses in the IT industry as most of
the transactions are done digitally. But,
certainly the largest employee base in the
IT industry may feel the inconvenience in
near future because of the pull out of the
500 and 1000 currency notes."
S Sriram, CEO - iValue infosolutions
too echoes a similar sentiment, “There
won't be much of an impact on the IT
industry as they prefer purchase and sales
through banking system only. Once cleaned
up, further generation of black money
will be dramatically cut down and more
transactions will happen electronically
instead of cash and hence the
counterfeit will reduce."
According
to
Sudip
De, Director - DOEL
International,
IT
and
mobility are pretty settled
business through national
distribution.
“All
cash
businesses would be hit
for sure. Legal distribution
through NDs & RDs would
thrive to topple the grey
market; trade would be hit in
the short term but in the long term people
would learn to do their business through
cheques or net banking. I just hope the
daily wage earners are not hit. Most of
them have not been able to decipher the
entire process clearly and they should be
educated. I prefer sudden jerks and so am
happy the way it has been done.”
With GST likely to be rolled out from
1st April 2017, this demonetisation of
old currency notes will complement the
government's move to ensure higher 'tax
compliance'. “While there may be hardship
for a week or two, thereafter things are
expected to settle down, and people in
general, including businesses, would be able
to get cash when needed through authorised
banking channels,” observes Viren Bavishi,
Director – TAIT.