Experiencing the effect of demonetization on service sectors in India

摘要

Like freedom of India, the demonetization reform was also unveiled in India during the midnight by the Indian Government and it was declared that one thousand and five hundred rupee notes would no longer be legal tender effective from 8th November 2016. At the same time, the Reserve Bank of India issued new two thousand rupee notes and new five hundred rupee notes on November, 10, 2016. This initiative was taken by the Central Government with the aim of preventing corruption, reducing black money and counterfeit currency notes. There was a significant impact on the entire Indian economy system and it was urged the citizens to switch to alternative modes of payment due to non-availability of hot currency i.e., e-payments, hence people faced many problems in all transactions after demonetization especially in service sectors. This paper performs a questionnaire based survey by collecting the necessary data from 629 beneficiaries/customers of service sector organisations in Chennai, the capital of Tamil Nadu state, India during November-December 2017 to measure the effects of demonetization after a year. Confirmatory Factor Analysis (Structural Equations Model) was used to analyse the relationship between the effect, sustainability and the impact on the customer satisfaction. The study found that demonetization based on Adoptability, Implementation, Readiness and Acceptance of new payment methods significantly influenced the customer satisfaction under service sector. The effects of different factors such as Approach, Availability, Time, Delivery and Infrastructure also had significant contribution towards the customers’ satisfaction.