Demonetisation pain seems to be over: IndAsia Fund Advisors

Financial advisory major IndAsia Fund Advisors on Wednesday said that subsiding demonetisation pain might eventually lead to a splurge in spending on items that were deferred during November and December 2016.

"Firstly, the demonetisation pain seems to be over," Pradip Shah, Chairman of IndAsia Fund Advisors, said in an interview to BTVi.

"There is optimism that the distribution of cash in the country, the availability of cash and therefore the velocity of circulation of money will dramatically improve than what we have seen in November-December, and so things will be back to normal."

"Possibly there will be a splurge in spending on items that were deferred in November-December. That's the optimism."

According to Shah, India is expected to maintain its position as the fastest growing large economy in the world.

"For the next several years, we will continue to do well because of the past investments and the changes made by PM (Narendra) Modi and his government. That momentum will continue," Shah said.

However, he cautioned that external factors like possibility of imposition of a "blanket tariff" on imports in the US can come as a shock to the system.

"What can be a shock to the system would be the externalities, for instance Trump coming on January 20 and putting a blanket tariff on imports. That could be very disruptive of international trade and India, which is interconnected with the world," Shah elaborated.

"...In the next six months, even after Trump' actions it will be obvious to the world that India is a better investment destination. It has a large domestic market, it has not done anything foolish and I think people will find their way back to the Indian markets."

--IANS

ppg-rv/vt