Suraj wrote:abhischekcc, some questions for you:
a) did you support Modi's plan to take on black money ?
b) did you understand what taking on the black economy entails ?
c) if you did understand, did you make contingency plans to move to all white transactions ?
a) Only to the extent it destroys FICN and old black money. But the introduction of 2000, 1000, and 500 notes means that corruption will resurface in future. There is no long term plan for fighting corruption, as Modi thinks Congress/others are beaten and only BJP will rule from now on. Hence, BJP can do corruption without restraint.
Hold it right there. We are talking of black money. Not corruption, not business difficulty etc. Not the same things. Let's not conflate them. Black money HAS been destroyed. In fact that's literally what happened - as of midnight Nov 9 2016, every last Rs.500/1000 note of black money is worth Rs.0. As someone (pankajs ?) said, all they are now, is a chit that you have to take to the bank to actually get money. Further, there is no plan to print the same amount of new notes. Not even 10% of the current notes out there.
abhischekcc wrote:b) Sure, it means going after each and every suspect, analysing their expenditure and seeing if it is above known sources of income, and then filing cases against them. This involves going after crores of Indians. I also understand that Modi has tried to sidestep fighting corruption with this hair brained and improperly planned stunt, which he obviously thinks is a 'cunning' plan. His assumption is (assuming he is sincere) - denude people with BM and corruption will end. Haha, corruption will only end if the avenues of corruption are removed.
Again, stop. Black money is not a synonym for corruption. If you claim that, every kirana store person is corrupt . Is that your claim ? No. Now put that aside.
I ask you this very straightforward question
: if they participants in a black economy have the currency they hold being invalidated, what do you think happens to the black economy ? It dies. Anything asset whose value held up by transactions in black money, falls in price.
Before you lose track of the thought process and say 'they'll just buy gold / land / etc', let me restate - not a single Rs.500/1000 old note has any face value anymore. It's a chit. They can't buy things with it. They can unload a little bit to someone more gullible, but not their entire hoard. Every single 'chit' is now something no one wants to deal with, because they either have to go to the bank, or give it to someone who will go to the bank.
You can't divide it in small portions and deposit it anonymously. The total cash float in Rs.500/1000 was approx $250 billion, or Rs.1,65,00,00,00,00,000, i.e. we're talking in crore-crores (whatever that unit is) . A large part of that was 'black money' . The more you divide it, the more effort it takes, and the more time you lose. It can't be swapped with Rs.50/100s . It's mathematically impossible because 86% of the cash float was in Rs.500/1000 and 14% was in Rs.100 or less. Can't. be. done.
c) All my transactions are white
Maybe, but your original complaint was the fall in price of your property. You may have purchased it in 100% white money, and plan to sell in 100% white money. But the RE market has a lot of black money. Any gains in the house price since purchase was backed significantly by demand caused by black money.
Now that money is worth Rs.0 . What do you think happens to the value of assets you hold ? This is why I asked you (b) above - did you understand what taking on black money entails ? You don't have to literally deal with black money, but if you hold assets whose market is dominated by black money, it will fall in price
. On the other hand, all the cash
you hold rises in value . Did you understand that when you supported Modi in this effort, anytime before Nov 8 2016 ?
I ask this question repeatedly, because an understanding of 'action against black money' means that if you support a politician whom you want to act on black money and thing action is imminent, the most logical course of action is to go into cash and unload as many things that you can, whose market is held up by black money. This is no different from selling bonds when you think interest rates will rise.