What the Rs 500, Rs 1000 ban means for India's event industry
As India tries to make sense of the PM’s announcement to make Rs 500 and Rs 1000 bills defunct, stakeholders of the event industry are still trying to assess the magnitude of it’s implication.
When it comes to listing cash rich industries, the event industry is a clear topper. Be it vendors, artists, décor companies or event planners, the flourishing industry has developed deep pockets for all. Ironically people are left with no cash to keep in it. With the ban of Rs 500 and Rs 1000 bills, as enforced w.e.f today, the industry, and more specifically the wedding industry, is left quaking in its boots.
This development may just take the ‘Big’ and ‘Fat’ out of the Indian wedding context. While the new Rs 500 and Rs 2000 bills will soon be introduced and may bring some stability to the situation, for now people are left asking the question- What to do with all the cash in circulation over the last three decades?
“Forget future bookings, we don’t know if our current bookings still stand or will be cancelled by the client”, says Dj Khushi, a leading deejay. He says, “Artists largely receive their payment in cash. While I declare my income, I know that most do not. This is supposed to be peak season for artists and the only thing peaking since morning is anxiety. The news has just come in so it may be too early to comment on the extent of the repercussions. Its now only a matter of time for the full-blown effects to manifest.”
Throwing further light on the situation, Nimit Mehta, Founder, R2S Events exclaims, “What about those getting married in the next few days? They will either have to cancel their entertainment or artists will have no choice but to perform at slashed prices”.
“If my current bookings go I have no regrets because in the long run this is for the larger good of the country. The luxury events and social events space will surely take a hit, but thankfully I have my hand in several pies from television to corporate events to writing, says Gitikka Ganju Dhar, a popular event emcee. She is also of the view that this will result in standardization of artist costs which has been a huge challenge for the industry. She exclaims, "Some clients had stupendous amounts of cash that they didn’t know what to do with, therefore unreasonable demands of artists were being met. Now with shrunken pockets of clients, entertainment will finally be enjoyed by all and at affordable prices.”
Possibly India’s largest provider of Stagecraft equipment, Varindar wadhwa, owner of Modern Stage Services, opines, “Wedding industry and real-estate industry will be the most effected by this. Décor companies who do most transactions in cash are surely left in the lurch. A friend has taken cash advances from his clients for upcoming events and now does not know what to do”. Giving a sense of the immediate effects he says, “My team is in Bhopal, Hyderabad and Chandigarh for multiple events and the money they are carrying suddenly has no value”.
A seemingly less affected segment of the event planning industry is perhaps those who work with corporations. Brian Tellis, Chairman of experiential agency Fountainhead, recently aligned with the media agency network of Dentsu, is of the opinion that temporary setbacks and inconveniences are in order, purely from a cash flow and transactional perspective, but ramifications won’t be too pronounced for agencies dealing with corporates. “Dealing in cash is a time-bomb in any case. This is one of the main reasons Fountainhead has stayed away from the weddings domain”, he expresses. Having worked with brands like Mercedes, Honda, Canon and Samsung, CS Direkt’s MD Sanjeev Pasricha says, “While agencies dealing with corporate clients are relatively on safer ground, execution of events will still pose a massive challenge. A lot of vendors do not understand cheque payments or online payments, how they will be paid remains to be seen. But in the larger scheme of things this will surely bring financial discipline in the industry.”
While one could imagine the luxury events space taking the maximum hit, Samit Garg, Founder of E Factor and the man behind India’s most opulent weddings is encouragingly calm and says, “Every problem in life leads people to find a solution. Private social events are momentous occasions, and people would continue to commemorate these moments. This decision is good keeping the macro health of the industry in mind”. Chiming a similar tune, Swati Pandya Sood, Director at Ferns and Petals, says, “In the past a lot of clients have approached us to make payments in cash but we’ve never encouraged it. We are not a “lala” company so we are okay. If anything, this is an opportunity for our industry to work in a structured manner and become organized. Everybody has to keep adjusting according to situations, it is high time we also revise the rules of our trade.”
While this optimism is reassuring, and perhaps the only option, given the foreseeable crisis the industry sits on, we can only hope that the optimistic trajectory does not end up in flames. The ripple effect is inevitable, when and how it hits is just a matter of time.
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