Demonetization has taken a toll on consumer durable industry. This industry is extremely dependent on cash and hence there will be a short-term impact of demonetization. The sector is in a state of flux due to demonetization and question mark on GST implementation. The only silver lining to the above two dark clouds could come in form of largesse announced for rural and semi-urban segment and increase in income tax slab in the Budget. However, given the 7^th pay commission hand-outs and good monsoons, demand will pickup. Also, industry players are coming up with innovative finance schemes and offers to lift the demand. About 30-35% of the sales in the sector are through consumer finance and the majority of the interest costs at 80-85% on these financing schemes are borne by the manufacturer, making transactions attractive for the consumer. Industry players expect the impact of demonetization on the industry should be around 2-2.5%. The near-term impact of demonetization could be on the secondary sales but long-term is still positive for the sector. Demonetization coupled with upcoming GST will ensure higher tax compliance for the unorganized segment and create a level playing field for large organized brands in the long run.