One month of demonetisation: Mixed reviews from the print industry

This sudden demonetisation, which sucked out over 80 percent of the currency in circulation, has hurt the Indian economy with the RBI itself downgrading the growth forecast for this fiscal to 7.1 percent from 7.6 percent earlier.

The short-term pain of demonetisation is now evident. Long queues in front of banks, cashless ATMs, and reduced small trade market activities bear testimony to it.

The demonetisation scheme has received mixed reviews from the printing industry. The chief executives in the print and packaging space that PrintWeek India spoke to say, even though the sector will record a short-term plunge, things will return to normalcy by the second half of 2016.

Munish Aggarwal
Managing director, Edelmann India
First reaction: Oh! Mr Modi has done another blunder!
Impact on the business: Our business has been severely affected. The monthly sale is down by 40%.
Industry in 2017: If the sales trend remains like this, we fear that the P&L shall be on lower side. Accurate forecast shall be available by the end February 2017.

Ankit Tanna
Director, Printmann Group
First reaction: I was shocked at first. But after investigating it in detail, I am happy with demonetisation move.
Impact on the business: No negative impact. It's business as usual for us.
Industry in 2017: The unorganised print sector will be hit hard. For the organised print and packaging segment, the first quarter might have below average results. After that business will return to normal.

Balaji Rajagopalan
Executive director - technology and channels, International Business at Xerox India
First reaction: Wow! A great move… It’s must for cleaning up the system.
Impact on the business: It has impacted the cash flow, the effects of which seem to be short term. Therefore, there is a slowdown in business for jobbers and small businesses.
Industry in 2017: It looks like recovery has already begun; we can expect things to normalise by H2 2017. One thing is sure, with this move, the country is set on a path of growth. The cashless environment will help to curb generation of black money.

K Sachindranath Udupa
Operations director, Quenby Transfers India
First reaction: I was surprised with this courageous move. I expected a lot of people will protest this move.
Impact on the business: The impact is temporary. It’s true that a lot of small-scale business have affected particularly the vegetable vendors. The situation is normal now in our area and it has no impact on our business. We have suffered more because of Brexit.
Industry in 2017: I don't think there will be a major impact on P&L for the printing industry. The percentage of cash in print business is minuscule. The industry will not have any trouble with banking transactions.

Ajay Aggarwal
MD and CEO, Insight
First reaction: I had predicted this would happen and it did happen.
Impact on the business: Almost negligible. In fact, it is good for organisations like us. We will not have to face unhealthy competition that deploys unethical means of business.
Industry in 2017: For the calendar year 2017, I feel the print and packaging industry will bounce back much stronger.

Vasant Goel
Director, Gopsons Papers
First reaction: Wow! It’s a wake-up call for India.
Impact on the business: No real impact as yet. For book printing companies, the full year impact on P&L cannot be ascertained correctly now as we are working on forward load and have capacity booked until March.
Industry in 2017: The cash flow may get impacted in short and medium term. The sales may also get impacted. These are expected to recover in Q2 and Q3. Having said that the long-term impact will be positive.

More than 30 days have passed by since the announcement. As yet, there's no clarity on the ground. Many traders and small business owners plus export houses in our industry have been affected. What's been the impact on your business? Write to us at kirshna.naidu@haymarket.co.in