VIEWS OF MR. M. MURALI, MANAGING DIRECTOR, SHRIRAM PROPERTIES ON DEMONETISATION
India 9 November 2016: The entire country welcomes PM Modiji’s (Narendra Modi Prime Minister of India) revolutionary, bold and courageous step, thus fulfilling his commitment to unearth and weed out black money in the system, which will have significant long term benefits for the economy.
I would say, this is a stern measure taken nearly after three decades against black money to check the huge build-up of unofficial money which had happened over the years. The parallel economy is thus effectively checked.
In my view, this measure will have significant impact and also give a boost to all formal channels of payments which is good for the country’s economy to grow at a faster phase.
In general, there may be transitory deflationary impact on the economy but for the long term growth the present step is a boon. Un-organized trade and services, less organized sectors with high cash economy will face the immediate impact. In the long term, as said, this revolutionary step will bring in several benefits with larger amount of money flowing into the mainstream economy.
As to Real Estate, less organized segment will only be affected. Today, most of the reputed developers have good practices already in place and having everything accounted. In the recent past, the industry has already witnessed several welcoming steps like Real estate bill to bring in more credibility and transparency. The organized real estate sector welcomes Prime Minister’s present step as it will further improve sector’s position on transparency and corruption in the global minds thus enabling further capital flow.
As to the market trend, it may have some transitory impact expecting fall in prices, which of course is already bottomed out because of high input costs. Fence sitters may defer their decision for the time being but will understand the reality and come back soon. However, with this check on black money, we can expect fall in land prices and increased bonafide demand for housing particularly affordable housing.
Overall the present measure is a welcome morale booster for the entire nation and economy. Kudos to Modiji for his brave step!