Demonetization and Freakonomics

Demonetization: Hits weddings in trouble

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The demonetization drive has had massive impact on wedding celebrations all over India. 

JK Rao, a junior-level postal department staff from Palakonda in Srikakulam district, said “I had borrowed Rs 2 lakh in Rs 500 and Rs 1,000 denominations for my daughter’s wedding. After demonetization, I went into a big shock. I could not converse the money and had to cancelled the preparations.”

Some of them even expressed difficulty in offering cash to the couples. D Naresh Kumar Varma, a software engineer from Hyderabad, had come to the city to attended a marriage ceremony. “I came to the city with a few Rs 500 and Rs 1,000 notes to enjoy the wedding of my friend. Now, I am finding it difficult to exchange the notes as most of the banks are out of change after a while. I cannot even deposit the cash as I do not have a bank account here,” he added.

Meanwhile, some of the people who could lay their hands on the new Rs 2,000 currency note surprised wedding couples by presenting them with the same.

Demonetization: Put India’s weddings in trouble

Marriages Planned in the next few weeks are the most affected due to Prime Minister Narendra Modi‘s Demonetization. Indian Weddings are all about big money as people tend to spend most of their life time earnings on the marriages of their children. Payments and gifts in marriages are all in Cash.

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A whopping numbers of Marriages due in November and December  were postponed due to the acute cash crunch as all the wedding related business are refusing the accept old denominations.

Muhuraths (Manifested Time) which can not be postponed are making sure that the wedding expenses are downsized.

The Freakonomics is playing an effective role in Dowry ‘As per the new trend, the bride’s families are giving the dowry in Cheques. In cases where the bridegroom families are refusing cheque payments, bride families are assuring them that they will give cash later on and take back the cheques. Relatives who are attending the marriages are also offering gifts in the form of cheques as they want to preserve the limited cash they have.

Much of India’s rural economy is powered by cash transactions with few people having bank accounts or operating one even if they have an account.

Milina Bose, whose daughter is getting married in five days, worried she would not have the cash to cover the large expenses associated with an Indian wedding.

“My daughter’s wedding is in December month and we are really worried about how to arrange the money for such a big occasion. Bank officials are saying that they will give the money only after furnishing the Wedding card and the presence of bride is also required at Bank, who is working in Bangalore and was supposed to be present at home within the week of her marriage, how will we make our purchases?” she said.

The currency move, announced by Prime Minister Narendra Modi, aims to bring billions of dollars worth of unaccounted wealth into the mainstream economy and curb corruption.

Ordinary people who do not have access to the banking system are the hardest sufferers also the small traders and businessmen who largely deal in cash.

RBI permits withdrawal for wedding expenses, if wedding before Dec 30

Couples looking to get hitched and fretting over the massive wedding expenses without a penny in their hand can heave a sigh of relief; that is as long as the wedding is before December 30. With a limit of Rs 2.5 lakh imposed for wedding expenses, only one person will be allowed to withdraw money for the wedding as long as the couple proves that the service providers being paid do not possess a bank account.

“With a view to enable members of the public to perform and celebrate weddings of their wards it has been decided to allow higher limits of cash withdrawals from their bank deposit accounts to meet wedding related expenses. Yet, banks should encourage families to incur wedding expenses through non-cash means,” Reserve Bank of India chief general manager vijay Kumar said.

RBI issued a notification to banks outlining the guidelines to be followed by banks while disbursing funds for wedding purposes.

The notification states that an individual can withdraw the stipulated amount out of the balance at credit in the account as at close of business on November 8.

This means that if an individual had less than Rs 2.5 lakh as on November 8, the person would not be able to withdraw Rs 2.5 lakh even as additional funds had been deposited after the demonetization drive was announced by Prime Minister .

RBI has cautioned banks to permit withdrawals only from Bank Accounts which are fully know-your-customer compliant.

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Popular Indian TV actor Shakti Arora too was gearing up for his big fat Indian wedding with girlfriend Neha Saxena. But now, thanks to demonetization, his wedding has been postponed.

Shakti reveals to a portal, “I had withdrawn cash to pay to the wedding organisers, caterers and other staff as I had to give them an advance. However, they are refusing to take the old currency now. It will take me a long time to exchange the old notes with the new ones. I have no idea when we will get married now. It’s definitely not happening this year.”

How can you tell an honest tax payer that you have no access to your funds? The government has created a situation of financial emergency, anarchy,” senior Congress leader Anand Sharma said.

He said there could not have been a more cruel joke on the people of the country and the government needs to take note of the situation on the ground. “Lakhs of marriages have been cancelled. Who will take responsibility for this?”

A Freakonomics Case Study will only put the responsibility on someone’s head.

sources:

http://www.patrika.com/news/gwalior/girl-marriage-cancelled-due-to-lack-of-cash-in-demonetization-1449681/

http://www.medianama.com/2016/11/223-live-blog-demonetization/

Read further:

Why BJP Govt’s Demonetization Move Is An Absolute Disaster

https://arresteddevelopments.wordpress.com/2016/11/24/why-bjps-demonetization-move-is-an-absolute-disaster

Demonetisation Loot And Plunder Says Manmohan Singh

https://arresteddevelopments.wordpress.com/2016/11/24/demonetisation-loot-and-plunder-says-manmohan-singh

The cash crunch may paralyse economic activities in India

https://arresteddevelopments.wordpress.com/2016/11/20/the-cash-crunch-may-paralyse-economic-activities-in-india

Demonetization may leads to Riots On The Streets in India

https://arresteddevelopments.wordpress.com/2016/11/19/demonetization-may-leads-to-riots-on-the-streets-in-india

Rupee Falls To Near Record Low

https://arresteddevelopments.wordpress.com/2016/11/25/rupee-falls-to-near-record-low

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https://arresteddevelopments.wordpress.com

Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

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