With the Indian government’s sudden decision to abolish certain denominations of currency notes and the current chaos surrounding cash shortages, it is no surprise that sales at petrol pumps have seen a spike in the use of the now-defunct Rs 2000 notes. Nearly 90% of all sales at petrol pumps have been in cash, as customers scramble to use up their Rs 2000 notes before they are rendered unusable. Many people have been seen using the Rs 2000 notes at petrol pumps since they don’t have sufficient change to buy smaller value items.
While the move may be a boon for petrol pumps in the short term, in the long run, it will have serious consequences on the economy, as people become increasingly cautious in their spending and consumption reduces. Petrol pumps and other businesses dependent on a large portion of their cash transactions being made in Rs 2000 notes will now struggle to fill the gap created by their demise.