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Globsyn Business School Blog

How does a student of management handle the cash crunch in the current context?


“I first reacted with shock at the announcement because; in the hostel we did not have enough cash in change. We had money, but only in Rs 500 and Rs 1,000 currency notes. I can never forget that night when we didn’t have anything to cook and we couldn’t go out for dinner because cash was not being accepted. On November 10, when the banks resumed operations, I waited for three hours in queue and when my number came I was told that the bank was out of cash, but I got it from another bank at the day end.”

This is what Subrata Deogharia, pursuing PGDM degree from Globsyn Business School, Kolkata said regarding his experience about cash crunch after the ban on Indian currency notes 500 and 1000 were imposed. There must be many students here and elsewhere who faced the same crisis but it also brings to us the vital question about how in the current context management of money has become a burning question.

The policy itself offered the alternative, digitalization. “Though demonetization has got some great benefits, it is not free from disadvantages like initially for few days there is chaos and frenzy among public as everybody wants to get rid of demonetized notes which in turn sometimes can lead to law and order problem and one of the main problem is cash crunch” says Prithviraj Sarkar, Post Graduate Diploma in Management (Finance) from Globsyn Business School. He adds, “According to me, handling cash crunch is tough initially but if we start using alternative forms of cash it will be very efficient and useful to us. This are majorly plastic money like Credit card, Debit card and Prepaid card. With the advent of technology we can also use Net Banking facilities by which money can be transferred from one account to another by National Electronic Funds Transfer (NEFT), Real-time Gross Settlement (RTGS) and Immediate Payment Service (IMPS). And the new addition to this list is E- wallets which is an online prepaid account where one can store money, to be used when required. As it is a pre-loaded facility, consumers can buy an entire range of products from airline tickets to grocery without swiping a debit or credit card. Some of the popular e-Wallets are: Paytm, Freecharge, Airtel, PayU Money, Oxygen, Wallet, Chillr, MobiQuick.”

The digitalization policy is indeed a boon to some but it is also important to understand that India is a country that operates through cash transactions. A angle that many students have now realized with this demonetization policy that things are changing at a fast pace and hence they need to look sharply at their expenditures because currently their source of money is from their parents. And here comes their management skills. It was interesting to know that some students even responded saying that the demonetization policy helped them to be thoughtful about their spending- spending on what you need currently than what you desire.

The entire country is indeed worried about how the income generating people would be acting handling the entire situation. But how do the students genre feel? Are they worried or have they been able to manage their money (whether be cash or in kind)?

A students life is surrounded with a lot of cash transactions on a daily basis. And this was specially evident when another management student from this city expressed her about social work activities which she till now just thought of monthly charity. She says I currently fund the education of a street child close to my house. They are too poor to afford the education of the child and pushing the kid towards child labour. She asks “how will I pay for her education now?” They don’t have Adhaar Card or Pan Cards and also do not have bank accounts. More than the education of the kid the parents are now worried about their own existence, because both of them are daily wage earners. As a student of management she feels that she needs to help them not just with money but also by helping them strategise about their income and money and helping them if they could also be part of the larger initiative of digitalization. She thinks her education till date will be of great help here.

But what about million of such people who are badly affected by this policy that change over night? 300 million residing in India do not have basic identity proof and more than half of the country’s population does not have bank accounts currently. And these people are intricately connected as resource agencies throughout our lives including the lives of students. The tea stall owner outside our colleges to rickshaw puller that drops you home every day, how they are going sustain their income and how their lives is going to affect ours?

A question that would currently go unanswered. While the huge amount of Urban population have supported the demonetization initiative for the right reasons, the majority of India that lives below poverty line is under stress because it is not just the policy that matter but effective resources for carrying out the policy implementation is currently not systematically running in the country.

As students of management or otherwise, we are currently witness to a great economic history in the making which is going to shape our lives in future. It is going to radically effect the way we view money with its nuances, and management skills in such situations specially for a management student would be hugely demanding and challenging- a challenge which would no longer be a choice for a coming generation.