When I logged onto Twitter at 19:45 on 8th November 2016 and saw a tweet that said “The Prime Minister of India, Narendra Modi, is about to address the nation,” I had no idea that the industry my grandmother thinks I am a part of was about to change in 4 hours.
For those of you who may not be aware of the Indian Government's move in the fight against corruption, black money and fake currency - here are the main points:
1. Currency notes of Rs 500 and Rs 1000 denominations will not be of any value beginning November 9
2. New notes of Rs 500 and Rs 2,000 would be released and circulated November 10 2016 onwards 3. People can deposit notes of Rs 1000 & Rs 500 in their banks from November 10 till December 30, 2016
4. Those unable to deposit Rs 1000, Rs 500 notes by December 30 for some reason, can change them till March 31, 2017 by furnishing ID proof along with a declaration form.
5. Currency notes of Rs 1000 and Rs 500 will be just paper with no value
6. Cashless fund transfer won't be affected by this move
The process of planning events in general has not really changed in several years. The process has, by large, remained the same for the last few years. People ask for recommendations from others who may have used these services recently - it used to be at the community temple or park previously, while now it is done on ‘PMIT’ groups on Facebook. Then there are calls, meetings & negotiations - after which depending on the kind of service provider there’s a discussion about the payment mode and here comes the magic question “How much in cash?”
The event-planning industry has always been one that has helped a lot of people get rid of their black money. Especially in a country like India where each of us have attended at least one big, fat Indian wedding.
You see, here’s the thing about fragmented markets - they are hard to track and have players who have not been part of the tax systems at all. For example, there are several priests who may not even have a PAN card or worse, may not be willing to share their PAN card or bank details for fear of accounting for their income. Service providers like pandits who only offer services may not run up humongous bills, but on the other side there are caterers, decorators, venues and event management companies whose income so far has been via large cash transactions. These are transactions that they are happy to be part of since there are no taxes levied on such income.
Let’s look at venues. As one of the founders of an event-planning marketplace startup I spent a lot of time meeting several stakeholders and asking them to come and become part of the platform we were building. Nobody was ruder than venue managers. There were several who kicked my co-founders and me out as soon as they heard the term ‘online payments’ or ‘startup.’ I don’t really blame them for the latter. Jokes aside, these very people are now forced to legitimize all their transactions. The surcharge on venue bookings which existed on busy and auspicious dates was almost always dealt with in cash and will now have to be dealt away with or legitimized.
The introduction of these new rules incentivises the issue of invoices and receipts. On the flip side, however, consumers may feel the pinch when there are taxes amounting to almost 15% being levied on the services.
Apart from personal events such as housewarming ceremonies and weddings, there are corporate events that take place in large volumes. These range from team dinners to company outings and everything in between. The lack of accountability and proper invoicing allowed a new breed of middle-men to thrive in this environment. These middle-men who are usually part of the “planning committees” at organisations would deliver bloated bills to their bosses and pocket the difference after coming to an understanding with the vendors or event managers. This move makes it almost impossible to pull off such stunts because now the vendors will be very particular about the billing and the taxes to be paid.
Will there be people who will try to circumvent these rules? Most certainly. Gold biscuits. Foreign currency.Ultra-long-distance Railway tickets. There will always be people who try to find ways around the system. On the whole, though, this is a welcome move and startups such as mine who are in the space and have been trying to digitise and legitimise payments in the space will find it easy to put our foot down and also compete on a level playing field. There is hope that this new-found transparency will lead to a better, reformed event-planning industry and technology startups like ours are in a unique position to help both the service providers as well the consumers with this transition.
At Eventosaur, we're thrilled at these changes since it makes it easier for us to be choosy about the vendors we work with and the customers we serve. To make it super convenient for our users, we've added multiple ways to pay for our event services including credit cards, debit cards, net banking, PayTm, OlaMoney, FreeCharge, MobiKwik and JioMoney thanks to our friends at Instamojo. Together, let's build a cleaner and better India. Jai Hind!