The Demonetization Drive announced by Prime Minister Narendra Modi on November 8th night brought the entire nation to a grinding halt. The move which aims to combat black money, fake currency, and Terror Funding hit the common man really hard as there is a huge gap between the demand and supply of the old notes. The impact is really big in all the segments and will also certainly have an impact on Andhra Pradesh’s upcoming capital – Amaravati as well.
The impact of the Notes Ban on Amaravati Construction will be partial. It will all depend on how long the cash crunch exists. For an instance, the government’s incomes are on a decline and that will affect the government’s plans in the upcoming capital. However, the long-term effect will be meager as the state government is mostly relying on Foreign Funding for the construction and all the payments by the government will be cash-less. But then construction companies may face the problem but it is still a long way to go.
The industries and various institutions coming up in Amaravati will have a short-term impact on the construction activity but it is purely temporary until the situation normalizes. The big impact will be on the realtors who invested big in the lands here. They will have cash crunch to start the construction as the transaction in this segments are mostly in Black. Also, the Real Boom will be at all time low with the purchasing power of people affected very badly. The prices are expected to go down which will impact the realtors but will benefit the prospective buyers.
Farmers who have sold their lands at premium prices and sitting on hard cash will have a very tough time converting the old currency as they are all big amounts. Most of these transactions are all of the unaccounted money. Finally, the impact of demonetization will have a very little impact on Capital Construction and a big impact on private expansion. Again, that will all depend on how long this cash crunch will exist and when the currency flow normalizes.