Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Are We Done with the Demonetisation Blues?
Wed, 15 Feb Pre-Open

It has been four months since demonetisation was announced. The government has not offered any mathematics or hard proof to show how and why it was good for the economy. One still wonders if it was ever a move against black money or a political ploy before some crucial state assembly elections. But there's enough data reflecting the damage done by the move.

The index of industrial production (IIP) for December 2016 contracted to a four-month low. Most of the brunt came as consumer durables output fell by over 10% YoY. The main reason for this fall was cash crunch led by demonetisation.

Also, the manufacturing sector witnessed a contraction of 2% YoY. As per an article in the Economic Times, as many as 17 out of 22 manufacturing sub-sectors reported contraction in December 2016. The slowdown here was also seen on the back subdued demand led by demonetisation.

Moving on to inflation...

The recent data retail inflation moderated to 3.17% in January. The decline was led by a marked fall in food inflation. While this came as a welcome breather, the same can be expected to rise as the cash situation turn normal. So when consumer spending normalises post demonetisation, we should all be on our guard for rising inflation.

Just Released: Multibagger Stocks Guide
(2017 Edition)

In this report, we reveal four proven strategies to picking multibagger stocks.

Well over a million copies of this report have already been claimed over the years.

Go ahead, grab your copy today. It's Free.

NO-SPAM PLEDGE - We will NEVER rent, sell, or give away your e-mail address to anyone for any reason. You can unsubscribe from The 5 Minute WrapUp with a few clicks. Please read our Privacy Policy & Terms Of Use.

Furthermore, as per the Assocham's Bizcon Survey, demonetisation is said to leave quite a negative impact on SMEs, rural consumption, and job creation in the short-term.

So the above data points suggest that demonetisation shocks are playing out. As things stand at present, there aren't many signs of growth recovery happening. We may have to wait for more clues in the approaching months to assess the full effect of demonetisation.

Nevertheless, it's evident that the government has messed up big time in this endeavor. Demonetisation was a poorly executed policy.

But this is only part of the story.

In his latest book, India's Big Government-The Intrusive State and How It is Hurting Us, Vivek Kaul has exposed the big government's lies. And I'm sure you would want to know the full story as this affects your money and wealth.

Equitymaster readers can get an autographed hardback copy of the book. This will not be available anywhere else. We will post the details of this offer and how you can go about getting an exclusive hardback copy of India's Big Government, in the days to come.

Watch this space!

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

Equitymaster requests your view! Post a comment on "Are We Done with the Demonetisation Blues?". Click here!


Small Investments
BIG Returns

Zero To Millions Guide 2018
Get our special report, Zero To Millions
(2018 Edition) Now!
We will never sell or rent your email id.
Please read our Terms


Jan 19, 2018 (Close)