Question

Impact of demonetisation in construction industry

Answer 1

Abstract
Demonetisation of Rs. 500 and Rs. 1,000 notes by
the Government of India is a very bold act and
welcoming one. The hoarding of money by
unscrupulous people led to double pronged impact on
the economy.
First the prices of commodities have gone up quite
steeply due to free flowing of high value currencies
by a handful of few and second the purchasing power
of money in real terms has slid badly to common
people who are the majority and in whose possession
the savings is very reasonable.
To say succinctly, the high value currencies were
stored only in the form of Black Money. Pumping of
this was used for activities which are antisocial and
on things which would shoot up prices of essential
commodities. Right from vegetables to gold, prices
went sky high.
A majority of black money or hoarded currencies
was spent or invested in Real Estate Sector. In fact,
this sector is more commonly known as the platform
for safe spending of hoarded high value
denominations.
Rightly, the bold act of the Government has
brought in very positive results in the Economy.
Introduction
It is a commonly known fact that the Real Estate
Sector is the one where cash transactions play a pre
dominant role. Even the educated people, prefer to do
it more with liquid cash than by going in for explicit
bank loans. The underlying reason is the actual value
of the property can be undermined to the extent of
cash payment and for loan purposes; some other
value or the balance of the property can be given.
The stamp duty can be avoided for the cash given
and the governmental charges are only for the value
spelt out on the document. Moreover, real estate was
considered to be the safe outlet for pumping out the
hoarded money.