It is reported that on November 9th last year, in an unannounced televised speech, Indian Prime Minister Damodardas Modi announced a policy that shocked the world:

Notes with denominations of 5 and 1, rupees (note: accounting for 86% of the total currency circulation in India at that time) stopped circulating immediately, and existing notes must be deposited in banks or exchanged for new coins within 5 days, otherwise they would become waste paper.

this so-called "financial blitz" against black money, corruption and counterfeit money is undoubtedly a part of Modi's strong reform. But one year later, the reality is not far from Modi's wish.

It caused unemployment and hit the wedding industry hard

Every time Xiaobian noticed that in early 217, ADB, the International Monetary Fund and many other institutions issued optimistic expectations for the Indian economy. However, the recent data released by India shows that the situation is not good:

In the first quarter of p>217, India's economic growth rate dropped to 6.1%, and in the second quarter, it dropped to 5.7%, the lowest in the past three years.

According to Liu Xiaoxue, an associate researcher at the Asia-Pacific and Global Strategy Institute of the Chinese Academy of Social Sciences and a special commentator on overseas websites,

Obviously, the decline in India's economic growth in the first quarter was the result of the government's "waste of money". In November 216, Indian Prime Minister Modi suddenly announced the abolition of the old 5 and 1 rupees banknotes and replaced them with new ones on the grounds of anti-corruption, anti-money laundering and anti-terrorism. Because the Bank of India did not print enough new banknotes, the duration of the "cash shortage" exceeded the government's expectations, which brought unpredictable results to the Indian economy, and many industries that relied on cash settlement, such as retail, transportation and real estate, were hit hard.

The continued economic decline in the second quarter was the result of uncertainty caused by tax increase and reform in the market on top of the influence of waste banknotes.

According to the World Wide Web, the slow economic development also leads to the loss of jobs. It is estimated that from January to April this year, the "Banknote Waste Order" caused 1.5 million people to lose their jobs, which also impacted the labor participation rate, and it has not yet fully recovered. The labor force participation rate reflects the ratio of the employed, willing to work and looking for a job to the working-age population.

Recently, Rahul, Vice President of Indian National Congress? Gandhi wrote in the Financial Times:

In India, it is the small and medium-sized enterprises in India that can really meet the challenge of China, and Modi's reform has dealt a fatal blow to them.

But the Indian government doesn't think that the abolition of banknotes has affected employment. According to the Times of India reported on November 8th, Ravi shankar Prasad, Minister of Information and Communication Technology of India, said at a press conference in Bhopal on the eve of the first anniversary of India's "Banknote Waste Policy" on the 7th that only those who don't improve their skills will lose their jobs after "Banknote Waste". Prasad believes that digitalization has created new employment channels. He said:

"We have provided loans worth 4 million rupees to 8 million people, including small traders, cart vendors and businessmen from lower castes, tribes and ethnic minorities. If each of them hires at least one person, it will naturally generate 4 million jobs. "

India's wedding industry has also been hit hard by the "Banknote Waste Order". The Indian Chamber of Commerce and Industry (Assocham) issued a statement on October 23rd, warning that under the double blow of the "Banknote Waste Order" and the higher goods and services tax, ordinary Indian families may cut their wedding costs, and the output value of the wedding industry may shrink by 1% to 15%.

Every time I learned through Xiaobian, the wedding is more important in the eyes of Indians than buying a house. According to the 215 Indian Consumer Report released by Goldman Sachs, the average cost of Indian weddings ranges from $7,5 to more than $75,. In contrast, the average annual income of urban population in India was only $3,2.

Bank deposits are growing, but cash status is hard to shake

According to the World Wide Web, India's "Banknote Waste Order" also has an optimistic impact. Since November 8, 216, more and more Indians have put their savings into the formal economy, thus expanding the growth of bank deposits. According to the Indian government, this is one of the original purposes of the waste currency policy to gradually lift India's large-scale shadow economy.

According to Mao Keji, a researcher at the India Research Center of Pangu think tank,

The most direct beneficiaries of Modi's "anti-black money movement" are Indian mobile payment companies and internet finance. In his first national speech after the issuance of the banknote abolition order, Modi said that India's policy goal is a "cashless society" and called on the people of the whole country to "use less cash". In India, where credit cards and credit card machines are not popular, the subtext of using less cash is to use more electronic payment. Modi even directly mobilized ordinary people to learn to use APP. In this way, Paytm, India's largest mobile payment and business platform, and MobiKwik, India's second largest payment platform, have all become big winners.

For example, according to Paytm's statistics, at present, 4 million people have started to use Paytm wallets, and the number of transactions per day has reached a record of 5 million, with 3.5 billion dollars to be paid and transferred. The platform funds have increased tenfold, the traffic has increased by 7%, and the number of application downloads has tripled ... But this prosperity is due to the fact that many new users are already using smart phones, and they just transfer the remaining money to mobile payment tools. The bigger problem is how to integrate the huge groups without smart phones, mobile phone signals and power grids into the advanced online payment system. They are the real potential of India.

because the infrastructure based on electronic mobile payment is still not perfect in Indian society, the enthusiasm of local mobile payment has gradually cooled down in India. The owner of a stationery store in Delhi said that at first there were five transactions with electronic wallets every day, but now there are only one or two transactions a month. "People still seem to be used to trading in cash." The boss said. In the gold trading market in Delhi, cash is still the main trading method. Carpil, an Indian gold and diamond dealer, stressed: "I insist on using cash. There have been robberies in shops here, so I don't store a lot of jewelry in shops as before, but I don't accept any checks or shopping cards. I only accept cash. " Piccard believes that customers also like cash transactions, because it can save payment tax.

On November 7th, Indian Finance Minister Allan Jetley wrote on Facebook that the "Banknote Scrapping Order" was "a watershed in India's economic history". According to Shi Ying.com, whether the Indian economy is developing in a good direction or a bad direction is still unknown.