Demonetization—a step taken to pull out all the unexplainable cash, restrict duplicate currency, and to streamline the currency distribution and tax recovery. These were the factors that were supposed to be emphasized post demonetization call. However, it isn’t yet confirmed that the motive is accomplished or not. Though it was a historic financial decision, but it affects almost shattered the economy of the country as well as the industrial sector are still striving to get through it.
FMCG market was majorly impacted due to cash crunch and limitation of RBI on the transaction. But in this overall act of the currency ban sub segment product of FMCG sector remained unaffected commodity if compared to other products such aerated drinks, confectionaries.
The tax collected through vegetable oils, cleaning materials, food products witness a drastic fall on its graph in November and December. The sale drop resulted drop in tax collection.
Experts claims that industry is on its track right now, but there are still some sectors that are still struggling to come out of the loss. The tough market conditions made the business challenging and unpredictable.
The projected reason behind unaffected cosmetic market can be consumers defocusing on self grooming or prioritizing the basic need to survive in the cash crunched atmosphere. Majority of the cosmetic products are sold over the counter through cash, looking at long queues at ATMs who would purchase some unnecessary products.
On the other side, government forced people to prefer online transactions for the purchase, thus the sale of this non-essential commodity survived the whole period of demonetization. So it would be more convenient to say that the graph of cosmetic commodity remained stable, whereas other products of FMCG sector failed to retain its market stability.