On the eve of 8th November of 2016, an announcement by the Honorable Prime Minister of the Indian democracy shook the entire nation and left ripples all over the world – demonetization of the old 500 and 1000 bills.
In this article, in particular, I will be talking about the effect of Indian demonetization on tourism and travelers, a sector that was most certainly and largely affected by this sudden and unforeseen act.
According to PM Modi’s call for action, denominations of INR 500 and INR 1000 would cease to hold value, effective the very next day. And this set the whole nation in a crazy frenzy.
In a night itself, people from around the world who were traveling in the country were set in absolute horror of the double trouble of –
a) Exchanging their home currency and,
b) Dealing with a national emergency (well, almost) in a strange country.
The worst affected by Indian demonetization, among others, were the travelers who had arrived in the country on the very day the declaration was ringing loud and clear throughout the country.
An irony that could not be overlooked is the fact that everyone who had less than INR 500 or INR 1000 in cash with them were luckier and virtually richer than those with, say, 30k in their bank accounts.
Motive of the Indian Demonetization Movement
Picture Source: TimeNews
This intrepid and most certainly audacious announcement seizes a high rank among the economic decisions ever taken by any Indian government system in the history of independent India.
With economists from all over the world putting their own version of the motives by this demonetization act, few have been made clear and even proved true.
- The memorandum was realized to put a restraint and fight corruption, black money, circulation of fake currency and funding of terror acts.
- While the whole country struggled to put their cash-in-hand to use, it was conveyed that this effect will also take the nation towards an eventual cashless state.
The Indian Demonetization Effect That Ensued
Picture Source: Linkedin
Industry, agriculture, the organized as well as the unorganized sector and, along with that, the tourism industry suffered the blow as well.
If you were in India, traveling or just planning your travel to India, if you were an international tourist or domestic, you would know the mishmash that was created overnight when all your INR 500 and 1000 notes were rendered valueless.
On Travel and Tourism
Before venturing into details, categorizing the travelers in general from all over the world (including the domestic ones) into two broad groups would make it simpler to look at the issue –
- The first are the ones who book their whole travel package starting from flight or rail tickets to shopping in pre-decided destinations and hence, pay the travel agent by card.
- The second is the lot who depend solely on their instincts when it comes to travel and depend on locals for directions and not Google Maps (that explains it, doesn’t it?). They depend on localization and their individual transactions are usually small and hence, paid by cash.
I am guessing it is clear by now as to who suffered the blow the hardest?
There has been a recorded 60% drop in hotel bookings along with complete cancellation of planned holiday’s altogether. For the time being, families dropped weekend trips. What a catastrophe, not going traveling!
How Demonetization Affected
International tourists coming to India or those already traveling in the nation suffered just as much as the locals did, if not more.
I have heard multiple fellow-travelers having hour-long conversations, describing the scenario they found themselves in when the whole nation was set into a frenzy.
- What can be derived from this is that there will be a difficulty in exchanging their home currencies and, if by God’s grace, you have a whole lot of 500 and 1000 denominations, the problem just got aggravated.
- Although, the fact that the old bills for air and railway tickets were accepted until 11th November was a respite for sure.
- With the denomination of the new INR 2000 in the market, the problem of getting change against low-end transactions surfaced.
Know more of RBI India’s FAQs on denomination right here.
Picture Source: Quora
The struggle of Indian travelers traveling out of the country before exchanging their old bills of 500 and 1000 cannot go without notice.
Picture Source: TravelTriangle
- Closed ATMs and banks on the day following the declaration seemed to make things worse. With the set limit on withdrawal of old currency, the exchange would obviously be difficult.
- For those who intended to book their tickets and packages from local agents in cash eventually ended up transacting with bigger tourism and travel brands online.
- With days passing by and India still under the grips of demonetization, newer aspects of its effects on travelers in particular and tourism, in general, are coming to the fore.
If there are questions popping in your mind in regards to demonetisation – NRI’s and Exchange of Rs 500 and Rs 1000 Notes, you can resort to this article.
Picture Source: NewsableAsianetNews
Take my word for it, Indian travelers touring the country heard more stories of ‘demonetization woes’ from fellow international travelers more than anyone else. I myself have a whole treasure trove of it.
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What is funny is that while practically no one else can deter my determination to shop from street-side vendors whenever I go traveling, PM Modi could.
- With a lack of cash, nonacceptance of old bills, shortage of money in ATM’s, unending queues in banks and the prior unpopularity of acceptance of online money and cards in small street-side vendors (whew!), I could not help but not shop.
- What I am trying to convey is that the move not only harmed the small, unorganized sector in my view but also took into reigns the expenditure of the people.
- Nevertheless, it surely gave a lesson on how to save money on travel to travelers from all around the world.
- Staying in home stays in remote villages of the country became a problem given the unavailability of ATM’s, banks, online money transfer facilities.
As adaptable as Indians are renowned to be, this national surprise in disguise of demonetization shook our grounds and eventual chaos (inevitably) ensued.
The struggle of the tourism industry to see through this dark phase and survive was not only visible but even worth the pity.
Read the first-hand experience of the people who managed to survive without demonetized currency right here.
Tips for Travelers and Tourists to Look Past Demonetization and Enjoy Their Travel
The Indian demonetization movement shed its looming shadow on the travel and tourism industry just like it did in every other sector.
Say, the effects of Indian demonetization on real estate practically shunned any investments in the sector for the time being. Luckily, the tourism sector didn’t suffer such a hard strike.
But, the government did provide some respite for travelers. If you’re thinking “How much Indian currency can I carry to India”, keep a check on that since money above a certain limit requires proper validation.
So, how can you battle demonetization during your travels in India?
- Paytm. This one-word solution is all-inclusive and is of angelic nature since even small street-side vendors now accept Paytm.
- Indulge in online transactions as much as you can.
- Stash up on cash before going to any remote village.
- Make bookings online.
- Take Uber and/or Ola instead of the auto rickshaws if they don’t yet have the Paytm facility. Yes, I know you love the local rickshaws, but help it for some time.
- Resort to help from banks. Just remember all of RBI India’s rules and regulations regarding the Indian demonetization and that should help you deal with it.
Just a few more tips help you brace yourself for your next/first/upcoming trip to India:
Lastly, have a devil-may-care attitude and just deal with it. Nothing can and should deter you from making the most out of your stay in Incredible India!
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