Skip to content

Impacts of Demonetisation on Indian economic climate?

Impacts of Demonetisation on Indian economic climate?

Demonetization is a generations’ memorable expertise and is going to be one of the vital financial routine of our time. Its have an effect on is felt by way of every Indian citizen. Demonetization affects the economy by means of the liquidity part. Its influence shall be a telling one due to the fact almost 86% of foreign money worth in circulation was once withdrawn with out changing bulk of it. Consequently of the withdrawal of Rs 500 and Rs one thousand notes, there took place massive gap within the foreign money composition as after Rs one hundred; Rs 2000 is the one denomination.

Absence of intermediate denominations like Rs 500 and Rs a thousand will cut down the utility of Rs 2000. Easily, this may occasionally make Rs 2000 less useful as a transaction foreign money although it may be a retailer price denomination.
Demonetization technically is a liquidity shock; a surprising discontinue in terms of currency availability. It creates a main issue the place lack of currencies jams consumption, funding, construction, employment and so on. In this context, the endeavor may produce following brief time period/long run/, consumption/investment, welfare/growth affects on Indian economic system. The intensity of demonetization effects evidently is dependent upon the duration of the liquidity shocks
.Following are the main influences.
1. Demonetization just isn't a tremendous catastrophe like global banking sector concern of 2007; but even as, it'll act as a liquidity shock that disturbs economic events.
2. Liquidity crunch (brief term influence): liquidity shock approach people aren't capable to get adequate quantity of popular denomination notably Rs 500. This currency unit is the favourable denomination in everyday life. It constituted to practically forty nine% of the earlier foreign money give in terms of price. Bigger the time required to resupply Rs 500 notes, better will be the duration of the liquidity crunch. Current experiences indicate that each one security printing press can print handiest 2000 million units of RS 500 notes by using the end of this year. Nearly 16000 mn Rs 500 notes have been in circulation as on finish March 2016. Some part of this have been crammed via the brand new Rs 2000 notes. Closer to finish of March roughly 10000 mn units might be printed and replaced. All these point out that currency crunch can be in our economic system for the subsequent 4 months.
3 Welfare loss for the currency utilising populace: Most lively segments of the population who represent the ‘base of the pyramid’ makes use of foreign money to fulfill their transactions. The day-to-day wage earners, other labourers, small merchants and so forth. Who stay out of the formal economy makes use of cash on the whole. These sections will lose sales within the absence of liquid money. Money stringency will compel firms to reduce labour cost and hence reduces earnings to the terrible working classification.
There can be a trickle up outcome of the liquidity chaos to the greater sales folks with time.
4. Consumption will be hit: When liquidity shortage strikes, it is consumption that's going to be adversely affected first.

Consumption ↓→ production ↓→ Employment ↓→ development ↓→ Tax sales ↓
5. Lack of progress momentum- India risks its function of being the quickest growing largest economy: reduced consumption, sales, funding and so on. Could cut down India’s GDP growth as the liquidity affect itself could last three -4 months.
6. Affect on financial institution deposits and interest fee: Deposit within the short term may upward push, but in the long term, its effect will come down. The financial savings with the banks are surely liquid money individuals saved. It's difficult to count on that such able cash once saved of their palms shall be put into financial savings for a long term. They saved this money into banks just to convert the ancient notes into new notes. These usually are not voluntary savings aimed to get curiosity. It's going to be transformed into lively liquidity by using the savers when full-fledged new foreign money give take location. This means that new savings with banks is simplest transitory or short-term deposit. It may be encashed by the savers on the suitable time. It's not crucial that demonetization will produce huge financial savings within the banking system in the medium time period. Lots of the savings are received by using biggie public sector banks just like the SBI. They'll curb curiosity rate within the brief/medium term. However they can't follow it in the long term.
7. Affect on black cash: best a small component to black money is actually saved in the form of cash. Traditionally, black earnings is saved within the type of bodily assets like gold, land, structures and so forth. Consequently the quantity of black money countered by demonetization depend on the amount of black money held within the type of cash and it'll be smaller than anticipated. However more than some thing else, demonetization has a big propaganda influence. People are now a lot convinced about the have to battle black revenue. This sort of nationwide attention and urge will encourage government to return out with even strong measures.
Eight. Affect on counterfeit foreign money: the actual influence will probably be on counterfeit/false currency as its circulation shall be checked after this activity.

Demonetization as a cleaning undertaking could produce several excellent matters in the economic climate. Even as, it creates unavoidable earnings and welfare losses to the bad sections of the society who gets income founded on their everyday work and people who doesn’t have the digital transaction tradition. Total financial activies might be dampened within the short time period. But the unmeasurable benefits of having extra transparency and lowered volume of black money routine may also be pointed as long run advantages

Six Real-time Marketing Ideas from #Demonetization of Rs 500 and 1000 . Notes

Six Real-time Marketing Ideas from #Demonetization of 500 and 1000 Notes

We were expecting breaking news on the American Elections. We sure as hell did not expect this – Our beloved PM Narendra Modiji announcing the demonetization of the 500 and 1000 Rupee notes

The impact it had was definitely BIG. It set the Twitteratis in a frenzy, with constant tweets, hilarious memes and endless opinions. The media house talked of it non-stop and everyone tried to understand the move – and how it affected them.

Thank you @Allindiabakchod – we definitely needed this meme.

What also happened is that a lot of brands capitalized on it! Big news – means Big Impact. And if you can use it to convert the audience to customers, well that is called successful real-time marketing! (News-jacking is similar and you can use news-jacking for successful content creation).
What made them successful though? Will it work for you as well? Well, that is what we are going to discuss here -so that next time such big news hits, you can be ready!

Real-time marketing hack #1 Be quick to respond
Big news also becomes old news quite fast. Though your audience may never stop talking about it, you get a very small window of opportunity, after which, your audience’s enthusiasm on that topic flags.
It is no longer interesting, and they in turn are no longer interested.
When the demonetization exercise was announced around 9:00 PM on the 8th Nov, the first response I noticed was by Paytm

Check out the time stamp on the post. It was a mere 3 minutes from when the news became public. It was quick, it was witty and it was loved by the Twitteratis.
They did not wait to come up with an offer. They did not wait to publish an indepth analysis. They got the news and they reacted – adding their two cents to the topic that had the attention of their audience. We have to give it to them folks – @Paytm totally nailed that one!
And let us not forget the brands that immediately followed. Box8 came up with a great offer that was started within the hour:

Cool right?
Oh, don’t get me wrong, a lot of other brands came up with offers as well – but by the time they rolled in, the public had serious offer ennui. For eg, consider this offer message I received:

It is still a nice offer, but the chances of me converting for that offer is pretty low. By then, I had already been inundated by a LOT of such messages and frankly, this one did not excite me in the slightest.
Better late than never is good. But with news-jacking, the later you deliver, the lesser your chances of converting.

Real-time marketing hack #2 Be prepared
Where real-time marketing is concerned, the unexpected always happens. You can expect one of three scenarios.
Scenario 1
Big news happens; You use it to market your brand and then you expect to have happy customers and great engagement. And you get it! Your name is on Twitter for all the right reasons.

Scenario 2
But hey, it can backfire as well. Consider what this brand went through – they had set up a nice offer, tweeted about it and were all set to receive customer praise. Unfortunately, a unhappy customer took them to task for failing to deliver on their offer (literally).

The saving grace here is that the brand anticipated an emergency and handled the situation. Whoever was monitoring social media then kinda saved the day.
Scenario 3
This is the worst possible case. You have absolutely nothing to do with what is going on, but still get flamed. That is what this tweet is all about:

Ouch! Unfair isn’t it? Well, it can still affect your brand image and you need to do damage control.
Your audience are witty. They are clever (and sometimes mean). They can easily pull up your past boo-boos to have a good laugh. Remember to watch out for it and defend your brand accordingly.

Real-time marketing hack #3 Nail customer service
Ground breaking news almost always creates confusion. The prospect is left wondering about “Is your brand adopting the change too? How can I proceed then? Why can I not just use the old way? What should I do now?” etc.
In short, they do not know what to expect from you, which means it is upto you to set their expectation straight.

Short, simple and to the point. Uber announces their stance and gives you a work around as well. That means no unhappy consumer complaints and difficult negotiations. More importantly, the consumer is informed and no longer in a dilemma – a direct win for customer service.
Now could also be the time to win customer loyalty – by going the extra mile to provide great customer service.
For eg. this is the message I got from my bank the very next day:

As a customer, I appreciated their gesture no end. The simple forethought of changing their business operations to accommodate our needs was effective in ensuring brand loyalty. Yes, it costed them man hours and they probably did not get the ‘Best Employer’ award that day. But they sure did win a lot of good will from us customers!

Real-time marketing hack #4 Include traditional media

Focusing on your brand image and impact in the digital world does not mean that you can forget about the print media. The good old newspaper is still going strong and can reach a far wider audience than what you can imagine.
If the breaking news makes the most sense to you and can hugely impact your brand, then you should definitely make every effort you can to connect with your prospects across every channel.
The demonetization of the 500 and 1000 Rs notes directly impacted online transactions. More people abruptly shifted to digital wallets and depended more on electronic transactions. Players in this field like Paytm and FreeCharge of course took full advantage of the winds blowing their sails!
Less than 48 hrs after the announcement, the front and back page of The Times of India newspaper carried bold ads:

Notice how Paytm appreciates the PM for such a bold move – and doesn’t focus on self promotion on the first page. Having an image of the man behind such a huge reform immediately attracts attention and instantly set it apart from other ads.
Not to lose out on the mind-share, FreeCharge – another online payment app opted for full size advertisement as well.

In their ad, not only did they target the buyers, they spoke to the vendors as well – businesses that could not accept money and were not online yet. They articulated the problem of ‘needing cash’ for businesses and delivered a powerful message – to use their App! Kudos guys, great move!

Real-time marketing hack #5 Standout from competition
If you think you have noticed an opportunity, then rest assured that your competition has as well and is working as hard as you are to capitalize on it.
In this case, it behooves you to introduce a differentiating factor in your ads so that you get noticed. Like I already mentioned, the demonetization announcement opened up a slew of offers being thrown at the public. However, two copies caught my attention:
The first one was this Ola ad. the first page is the usual life-size offer proclaimed because of the circumstances.

The second page however educated the audience on how exactly to start using Ola Money. It was actionable, it provided an incentive to join and also highlighted multiple other advantages of moving to Ola Money. In short, it provided a complete conversion package.
Imagine an average citizen who does not have Ola Money yet and is deeply affected by the demonetization recall. This ad directly speaks to him! Since a lot of the audience who subscribe to the print media fit the exact profile of the above mentioned average citizen, they scored a definite win right there!
The age old way to hasten conversion is by making the process as simple as possible. Quick, hassle free and least effort guarantees better conversion rates. Here is an ad that used these aspects to differentiate itself – FreeCharge.
Check out this screenshot I took while clicking a picture of their ad in the newspaper:

Notice the highlighted URL on top? Well the end of the page has a scanning code that when scanned by your mobile automatically gives you a URL to download the App. That means, no searching on GooglePlay and installing. The minute you read the Ad and you are convinced about it, you can whip out our phone and instantly install. Great way to boost conversions!

Real-time marketing hack #6 Be relevant
Have you noticed a common thread in all the ads above? They addressed a common problem, yes (that arose because of the big, breaking news). But they also framed their headlines and their ad language in such a way that the reader can immediately make the connection as to how the product could solve their problem. “Cash”, “Note”, “Unwanted” etc were a recurring theme that the reader could immediately identify with.
Using such relevant language in regular offers can improve the conversion rates of your ads. So when I got these two emails in my Inbox today, I had no doubt that they were referring to the demonetization issue at hand.

The highlighted text show you that they have kept their offers very pertinent to the situation at hand – without referring to it directly!
So, I have one more example to talk about when it comes to relevancy and I promise you that it is equally interesting.
While this breaking news was happening in India, across the pond, a monumental election was taking place. Yes, I mean the one in America.
Since we do not make political comments here, I shall reel myself in with a herculean effort and instead talk of this:

Good move Uber!
And I am sure you realize the obvious – this offer would not have made a lick of sense in India or in any other country for that matter. Remember that the news you want to base your offer on may have global consequences, but it’s immediate effects are still geographically limited. To translate, even if the whole world was talking about the US elections, having an offer anywhere but inside the US would not have been relevant at all.
So, what real-time marketing efforts have you come across? Do you have more to add? Comment and let me know!