Currency Demonetisation and Future course of Indian Economy

Gus · Post by **Gus** » 23 Nov 2016 23:23

shiv wrote:
Sachin wrote: 2. CPI(M) plans to have a "nation wide" protest on Nov 28 (Monday). The day has been rechristened as "Aakrosh Divas"
I will work double hours on that day. I will do free consultations

yeah..let's do a nation wide appreciation day for this.

Suraj · Post by **Suraj** » 23 Nov 2016 23:24

The last I checked, Hinduism has been around for a few thousand years before paper money was invented. It will do just fine when it doesn't have to deal with cash to celebrate its best moments. If anything, removing the corrosive effect of unacccounted for money makes it better. All basic hundi payments can be made using upto Rs.100. If you're feeling uber generous, write a cheque to the temple management.

Gus · Post by **Gus** » 23 Nov 2016 23:28

Suraj wrote: GoI does not plan to print cash to replace all the previous cash float. Not even close to it. Maybe 20% of the prior float.

20% is a hunch? did GoI say anything specific?

R_Kumar · Post by **R_Kumar** » 23 Nov 2016 23:29

I think we are digressing. We should keep this thread for Demonetization only. What's the ground report? Are lines getting shorter? Since I don't see any related articles in news paper, my guess is that it's no more an issue any more.

Suraj · Post by **Suraj** » 23 Nov 2016 23:32

Gus wrote:
Suraj wrote: GoI does not plan to print cash to replace all the previous cash float. Not even close to it. Maybe 20% of the prior float.
20% is a hunch? did GoI say anything specific?

GoI is replacing approx 10% of the original float of 500/1000 notes by value. Those notes constituted approx 86% of the original float, so very rough math is new float will be 20% of the original, with the entire float of Rs.100 and below (which constituted 14% of the previous float by value) assumed unchanged. Of course this is quite simplistic, but you get the general idea. It may be 25%, but that's still plenty enough.

Rishi Verma · Post by **Rishi Verma** » 23 Nov 2016 23:41

Visited the trusty Canara Bank ATM. Nobody at ATM. I got my 2000. On the other hand my Corporation Bank still hasn't opened their ATM since day-1.

Right now the only problem I see is non-performing ATMs. Is the gov listening?

Gus · Post by **Gus** » 23 Nov 2016 23:51

http://www.dinamalar.com/news_detail.asp?id=1655321

tamil - says after demonty 21,000 cr deposited in JDY accounts

TKiran · Post by **TKiran** » 24 Nov 2016 00:03

The mullah in front of my business celebrates IED so grand there will be 1/2 km line for eating haleem, so far my celebrations of Dussehra is at least 3 times grander. I will never hang my head in shame in front of mullahs... So Suraj San, Hindus will survive.. Thrive???? I don't know.

Primus ji, can I consider you as liberal progressive Hindu, no I am not suggesting that you are as liberal as some of the journalists, now I am thinking where did I hear the arguments ' Dipavali without firecrackers' ' holi without water' etc... I am just thinking...

Seriously, do you know why dowry is given by the bride's family to groom's family??

I apologize if I am talking tangential. You need a paradigm shift to understand my arguments, I'm still on the topic of black money only. Demonetization -- relevant but not OT. If still the admins think I'm trolling, please inform, I'll delete my posts with unconditional apologies.

Akshay Kapoor · Post by **Akshay Kapoor** » 24 Nov 2016 00:06

Suraj wrote:
Gus wrote:
20% is a hunch? did GoI say anything specific?
GoI is replacing approx 10% of the original float of 500/1000 notes by value. Those notes constituted approx 86% of the original float, so very rough math is new float will be 20% of the original, with the entire float of Rs.100 and below (which constituted 14% of the previous float by value) assumed unchanged. Of course this is quite simplistic, but you get the general idea. It may be 25%, but that's still plenty enough.

Hi Suraj, thanks for some brilliant clarifications not only of the whole exercise but also of how the monetary system and economy works. Are you sure about the this 10 or 20 pct number. Haven't seen it anywhere in govt or RBI statements. Also I was wondering why bring out a 2000 re note ? Won't that make it easier to accumulate new black money unless of course it's very limited but in that case won't it find its way into black and illegal channels again.

As a counter factual I was wondering what would happen if the following were done - demonetise as being done now, but don't bring in new 500 and 2000 re notes. Instead bring in 250 Re note

Suraj · Post by **Suraj** » 24 Nov 2016 00:16

Hi, the whole process is called demonetization. They're taking high denomination cash out of the system. What's the whole point if you simply put back new cash ? It logically reduces to nothing more than a very expensive hassle for zero effect. There was approx 16 lakh crore worth of 500/1000 notes out in the open earlier. Approx 33000 crore were exchanged as of Dec 18, which is 2% of the earlier float. 14% of the original cash float was Rs. 100 or lower denominations. During the same time (Nov 10-18), Rs.5.5 lakh crore has been deposited, or approx $82 billion, or approx 33% of the total value of Rs.500 and 1000 out earlier, and Rs.33K crore (2% of total original float exchanged or withdrawn. By the time all that cash is deposited back in the system, there will be approx Rs.1 lakh crore in 500s and 2000s (and smaller denominations) out. That's an ~80% reduction in cash float in the system. Feel free to nitpick the exact number, but the actual idea is quite straightforward and the data so far bears it out that approx 3/4ths of the previous cash by value will be out of circulation .

Suraj · Post by **Suraj** » 24 Nov 2016 00:17

TKiran: yes please make that the last post on that sidebar. I'll leave that post alone, but no more.

Primus · Post by **Primus** » 24 Nov 2016 00:31

^^^

Kiran Ji, I don't apply any labels to myself - FWIW, my wife and kids think I am a 'fanatic Hindu' so I really don't care one way or the other.

All I can say is that you don't NEED anything to be Dharmic and you certainly do not need water to celebrate Holi (we usually do it dry as it is too cold where I am), or firecrackers to celebrate Diwali (banned by law in our area). Even if you could, you don't need these accoutrements to be festive.

And as for dowry, yes, I am well versed in the history of our culture, probably even more than some here, but I won't debate that for now.

Coming back OT, I don't know what kind of 'paradigm shift' or epiphany of sorts anybody needs to understand that black money is black money, no matter how much you may try to wash it. Tax evasion is theft from society and the nation even if everyone does it. There can be no justification for it and no amount of rationalization will make it kosher.

The question for this moment in history is whether the present government will go down as truly revolutionary in its approach to this malady or will it simply - go down.

g.sarkar · Post by **g.sarkar** » 24 Nov 2016 00:45

http://indianexpress.com/article/india/ ... a-4390751/
Demonetisation: Over Rs 75 crores in pending power bills collected in Haryana
Soon after the decision, defaulters have paid power utilities to the tune of Rs 75 crore in old currencies to clear pending bills.
The Centre’s move to demonetise Rs 500 and Rs 1,000 notes has given some reason to cheer to the cash strapped power utilities in Haryana. Soon after the decision, defaulters have paid power utilities to the tune of Rs 75 crore in old currencies to clear pending bills.
....

Gautam

KJo · Post by **KJo** » 24 Nov 2016 00:47

I am listening to a "Planet Money" podcast about the DeMo by NaMo and the host says some Mohit Dubey from Dilli "saved up" equivalent of Rs 350,000 in cash to prepare for a cousin's wedding. They don't say if it was black or white. Now with the DeMo rule, it is useless.

Is this true? I thought it was useless as long as you could not account for it. If you had 10 cr in the bank and you withdrew it as cash (for whatever reason) in Rs 1000 notes, you could still put all the money back into the bank and not lose it because you have a trail of taking out out from the bank. Hence it is white money, not black.

Is anything wrong with this logic? Looks like some rumors are being spread by furrin agencies.

g.sarkar · Post by **g.sarkar** » 24 Nov 2016 00:50

http://indianexpress.com/article/india/ ... n-4384031/
Arvind Kejriwal gets angry at BBC reporter questioning him on demonetisation
Arvind Kejriwal: 55 people have died in the country since the Rs. 500 and Rs. 1000 notes have been banned. And the BBC is saying we cant link this to demonetisation. This is their honest journalism.
.........

Gautam
BBC in terview in Hindi:
https://www.youtube.com/watch?v=OroTzot75Gg

Hitesh · Post by **Hitesh** » 24 Nov 2016 01:01

shiv wrote:
Hitesh wrote:
You have never been in a small business owner's shoes and small businesses make a huge majority of the Indian economy. They practically live month to month and constantly worry about making enough money to meet the next month's expenses.

They have to go out and get the business which is a lot of work in itself and when they finally get the work, they have to do the work and make sure it is good quality in order to get repeat business.

Try being a doctor. You have to depend on someone to fall sick and come howling to you and then be told that you must empathize with your customer and do your ethical level best for him and also not demand money because "you are like God"

Medicine is the only goddam business in the entire world in which you cannot advertise (by law) and you have to do your best to ensure that your customer never comes back to you again to be called a success.

Easy to think that every other guy is having a nice time, but please stop. If you chose business. Live with it. Make your child a salaried employee

I am a lawyer and I am not allowed to advertise without going through the Florida Bar and it is quite a cumbersome and expensive process. Not worth it if you are not planning to spend tens of thousands of dollars on advertising.

As for repeat business, once you are done with servicing your client to the best of his needs, they never want to see you again and run away from you like the plague. And good luck trying to collect the full invoice of your fees.

Going by your last statement, you have no idea of what is like to run a business let alone a medical practice. You are probably sitting in an ivory tower with no realistic expectations or views of running a business.

Primus · Post by **Primus** » 24 Nov 2016 01:38

Hitesh wrote:

I am a lawyer and I am not allowed to advertise without going through the Florida Bar and it is quite a cumbersome and expensive process. Not worth it if you are not planning to spend tens of thousands of dollars on advertising.

As for repeat business, once you are done with servicing your client to the best of his needs, they never want to see you again and run away from you like the plague. And good luck trying to collect the full invoice of your fees.

Going by your last statement, you have no idea of what is like to run a business let alone a medical practice. You are probably sitting in an ivory tower with no realistic expectations or views of running a business.

Hitesh Ji, I agree, businesses are not easy to run and often you lose more than you hope to gain, you put your home and your wife's earnings, everything on the line. Been there and done that. So I understand the process quite well.

However, at the risk of starting a doctor vs lawyer debate, you do realize that one of the commonest ads on the radio around the nation are those run by large law firms which do not charge anything unless they 'win'. You as a solo lawyer have a hard time and you have my sympathy, but most group practices advertise all over the radio, television, billboards, papers etc. In contrast, doctors typically are not allowed to, except for hospital systems.

This is completely OT, but one of the biggest engines driving the US healthcare crisis is the malpractice laws and since the politicians are all lawyers themselves (majority), things are never going to change. I can tell you dozens of stories that are mind-boggling and can only happen in the US, but let us leave it for now.

FWIW, my nephew is a lawyer too so I do understand it is very hard work and often not rewarding at all.

Suraj · Post by **Suraj** » 24 Nov 2016 01:51

Hi, please stop with all the lawyer / doctor business difficulty talk in this thread.

Akshay Kapoor · Post by **Akshay Kapoor** » 24 Nov 2016 02:47

Suraj wrote:Hi, the whole process is called demonetization. They're taking high denomination cash out of the system. What's the whole point if you simply put back new cash ? It logically reduces to nothing more than a very expensive hassle for zero effect. There was approx 16 lakh crore worth of 500/1000 notes out in the open earlier. Approx 33000 crore were exchanged as of Dec 18, which is 2% of the earlier float. 14% of the original cash float was Rs. 100 or lower denominations. During the same time (Nov 10-18), Rs.5.5 lakh crore has been deposited, or approx $82 billion, or approx 33% of the total value of Rs.500 and 1000 out earlier, and Rs.33K crore (2% of total original float exchanged or withdrawn. By the time all that cash is deposited back in the system, there will be approx Rs.1 lakh crore in 500s and 2000s (and smaller denominations) out. That's an ~80% reduction in cash float in the system. Feel free to nitpick the exact number, but the actual idea is quite straightforward and the data so far bears it out that approx 3/4ths of the previous cash by value will be out of circulation .

Thanks I agree the empirically given deposits and withdrawals till now that's the number that makes sense. But in principle over the next 6 months or a year what's to stop people from withdrawing 4 lac crores of the 5.5 lac crores deposited. Say I have 1 Crore in cash in old notes. I deposit all of them. Then using cheques( assuming I have no tax concerns ) I withdraw 80 lacs. No law against that right ? And withdrawal becomes easier if there is 2000 Rs note.

I guess my question is how can the govt actually limit the high denomination currency in circulation.

Suraj · Post by **Suraj** » 24 Nov 2016 02:51

What's to stop them from withdrawing cash ? How about the lack of actual physically printed cash ?

Akshay Kapoor wrote:I guess my question is how can the govt actually limit the high denomination currency in circulation.

This is entirely within RBIs control to do, and RBI exists by Act of Parliament. They decide what the M0 is, based on the monetary policy framework. Intro reading: https://en.wikipedia.org/wiki/Money_supply .

ManuJ · Post by **ManuJ** » 24 Nov 2016 02:56

I'm sure that by 30 Dec, govt. will announce new measures to curb cash transactions above a certain limit.

Also, once you make a deposit, you have to account for it and pay taxes + penalty if applicable, whether you leave it in the bank or withdraw.
So any money deposited in this period has entered the mainstream and become white, which was the idea behind this exercise.

durairaaj · Post by **durairaaj** » 24 Nov 2016 03:56

These are the some of the rules they can make.
1)They can forbid banks to give cash more than 10,000
2) They allow banks to take amy aount of liquid cash through properly linked legal accounts
3) Any cash transaction above 50,000 must go via banks or online channel
4) Remove 2000 notes slowly from circulation and replace it with 10s and 20s.
5) Make POS a cash vending machine fro debit card
6) decrease online and card transaction cost to be or< 0.1 %
7) all employees get salary direct deposited

All government bills are paid by card or online transfer

hanumadu · Post by **hanumadu** » 24 Nov 2016 04:43

TKiran wrote:

Many people do తూ తూ పెళ్లి... Thoo thoo marriage and think that they too experienced the marriage..

You are insulting all those who don't have the means to spend lavishly on marriage. Then what are all the rituals and customs about? Don't they have any meaning or significance in the absence of a lavish wedding? Who defines the cutoff amount for a sham marriage vs a real marriage? If you ask J Reddy, 99.999999 marriages are sham marriages probably including your own. If you ask Ambani or Mittal, then J Reddy's marriage is a sham marriage.

Sorry boss, if you need black money for a 'real' wedding, I would much rather have people marry in temples than a lavish wedding with ill gotten wealth.

An MLA of my town gave a figure to all business associations to contribute to wards his daughter's marriage. I am sure he did not do a 'thoo thoo' marriage but a grand wedding just like you would approve. But the number of people who cursed the wedding would be far more than the number of people who attended the wedding to bless the couple.

Yagnasri · Post by **Yagnasri** » 24 Nov 2016 04:48

BRF is having too many Telugu people.

Those who are not having 100s, please note you may not get them this week at least. This is from the horse mouth.

Rishirishi · Post by **Rishirishi** » 24 Nov 2016 04:58

Modis gamble may fail.
There is a lot of stress on the farmers now. Specially the vegitable farmers. The demand has radically gone down, so they have to sell their produce at a loss now. It was ok for a week, as they just did not take the vegitables to market, but now it has started to hurt. Money to the farmers do not help, as they have to sell and at least get their investments back.
I think the other parties are hoping for this and have started to slowly agitate.
But the money has started to tricle in and things will hopefully easy by next week.

unfourtunately most people with black money (less then 5cr) may have managed to exchange a lot of it already. At least there is no shortage of brokers willing to purchase old notes in bulk in exchange for new ones. let us see.

An alternative strategy could have been to pring a "mountain" of Rs200 rupee notes (even printed it abroad and flown it in to keep it a confidential. Storing BM in 200's is just not practical.

At the end of the day i do not understand what Modi will achieve. If it fails to make the economy cashless, people will purchase gold with their BM even more.

hanumadu · Post by **hanumadu** » 24 Nov 2016 05:00

TKiran wrote:The mullah in front of my business celebrates IED so grand there will be 1/2 km line for eating haleem, so far my celebrations of Dussehra is at least 3 times grander. I will never hang my head in shame in front of mullahs... So Suraj San, Hindus will survive.. Thrive???? I don't know.

If the mullah was using black money to celebrate EID grandly, then his celebrations will also be affected by the DeMo just like yours will be. If he is not using black money, then he is an example of how you too can run a successful business without resorting to tax evasion. You are equating your thriving to Hindus's thriving. No sir, your black money comes at a cost to the other Hindus - a Hindu's education, a Hindu's health.

Its funny how people are saying how hard it is to run a business, pay salaries and be profitable but in the same breath argue they should be allow to keep black money. Isn't this an oxymoron? If it was so hard to a make a profit, then there is no scope for black money. If you are generating black money itself means you are generating income above the taxable limits. And the more black money you have indicates how well you are doing.

svinayak · Post by **svinayak** » 24 Nov 2016 05:03

Rishirishi wrote:

At the end of the day i do not understand what Modi will achieve. If it fails to make the economy cashless, people will purchase gold with their BM even more.

This is not one person drive.
The previous govts also made many measure to curb fake notes and black money.

Modi has enhanced the approach with new policy and direction.
All transactions are recorded now and the social behavior with money is going to change now.

This business transformation will change the economy in the long run.

hanumadu · Post by **hanumadu** » 24 Nov 2016 05:13

Rishirishi wrote:Modis gamble may fail.
There is a lot of stress on the farmers now. Specially the vegitable farmers. The demand has radically gone down, so they have to sell their produce at a loss now. It was ok for a week, as they just did not take the vegitables to market, but now it has started to hurt.

At the end of the day i do not understand what Modi will achieve. If it fails to make the economy cashless, people will purchase gold with their BM even more.

What is the basis for this statement? If you can back this up with data, then you are doing the naysayer's bidding. That's exactly what they want. Rumours to spread of shortages, loss, low GDP growth, deaths.
So you have already concluded the DeMo is a failure. If it does fail eventually, you are contributing to its failure.

Folks, please spread good news. If you have to spread bad news in the interest of truth and balance, exercise caution and make sure you back it up with sufficient evidence. Don't generalise a one off incident or a single news report especially if it is from MSM, of course unless it is your purpose to derail DeMo. Thank You.

GShankar · Post by **GShankar** » 24 Nov 2016 05:36

my take - this demonetization seems analogous to america's war on terror - a war (or a raid) to justify many others.

Similarly, demonetization is an uber raid on Indian citizens to justify many more. I don't mean by previous statement that the govt. is harassing the citizenry. But implying that to catch a thief, everyone is being 'checked', so pardon the inconvenience.

Now that the govt. is watching almost everything that's going on including hospitals not accepting cash, employers not paying employees, etc. For example, say, 6 months from now if Modi were to enact a law that hospitals can never reject a patient, all these deaths and inconvenience blamed on the govt. will be forgotten and the masses could come to appreciate this.

Similarly the govt. can look at those who can't pay their employees and figure out a way to enforce direct deposit and also introduce some labor reforms. If only the govt. realizes that they can use this to go against many entities to affect good things to common man, politically and also in real world.

so many possibilities but important thing is not to get distracted in the next 2.5 years.

shiv · Post by **shiv** » 24 Nov 2016 06:04

deleted useless waste of space

hanumadu · Post by **hanumadu** » 24 Nov 2016 06:09

The tweet

Business StandardVerified account
‏@bsindia
#demonetisation drives 70% trucks off India's roads http://mybs.in/2TJGujZ

The response

MS ‏@mshet138 16h16 hours ago
@bsindia I m looking after logistics of leading corporate . We didn't face any problem in transportation so far.

Mayur shah ‏@JasMayurshah 15h15 hours ago
@bsindia Do you stand for BullShit ? Totally false news.

deshmerarangrej ‏@deshmerarangrej 16h16 hours ago
@bsindia then how come there is no shortage or price escalation. 70% is quite a large number

Nishith ‏@Nishith1608 11h11 hours ago
@bsindia @barbarindian If India is doing fine with 30% trucks plying, get those 70% off road permanently. Reduces congestion & pollution
0 replies 1 retweet 2 likes

Ravi Rao ‏@samahitharavi 14h14 hours ago
@bsindia but how come there is hardly any change in truck traffic. Is this some different planet you are referring to?

SRAO ‏@VandeMaataram01 7h7 hours ago
@bsindia we get daily 20-25?trucks to our company for transportation of goods; this is simply bullshitting by your media

AA ‏@balanced_tarazu 15h15 hours ago
@bsindia More accurate headlines would be #demonetisation drives black money holding editors and journalists at Business Standard to despair

Acharya ‏@mgvinod 3h3 hours ago
@bsindia Does BS stand for bull shit? I can't quite figure why he needs to withdraw 50k every week? The rest of the story is built on this.

VaK ‏@vak1962 6h6 hours ago
@bsindia Bullshit lies. This news is lying, have personal knowledge of it.

raghavendra ‏@raghavendraudup 7h7 hours ago
@bsindia you cannot run newspaper by spreading agenda driven rumours

Ravi Grover ‏@Ravigrover12 11h11 hours ago
@bsindia If 70% of transport gets crippled then there should be long Q for fuel , grains which is not the case check your data provider .
0 replies 0 retweets 0 likes

shiv · Post by **shiv** » 24 Nov 2016 06:16

TKiran wrote: Seriously, do you know why dowry is given by the bride's family to groom's family??

I apologize if I am talking tangential. You need a paradigm shift to understand my arguments, I'm still on the topic of black money only. Demonetization -- relevant but not OT. If still the admins think I'm trolling, please inform, I'll delete my posts with unconditional apologies.

Yes a paradigm shift is needed, but when you talk about "understanding" what YOU mean, you will also be asked to understand what others mean.

You are calling for a paradigm shift that suits you and you claim that it is the best way to protect not only your way of life but all Hindus. This is an argument that will fail on a thousand counts and is only fuel for evangelists. You also need a paradigm shift in your thinking. No more from me on this.

ManSingh · Post by **ManSingh** » 24 Nov 2016 06:31

Just a random thought. I am not an economics expert.

Now the govt. has a lot of money, esp the money that will never be exchanged and can simply be wiped off the RBI balance sheet. Could this be an intention to prepare for an oncoming destruction of terror infrastructure and its supporters?

Apologies if its the wrong thread.

Rammpal · Post by **Rammpal** » 24 Nov 2016 06:55

Suraj wrote:Hi, the whole process is called demonetization. They're taking high denomination cash out of the system. What's the whole point if you simply put back new cash ? It logically reduces to nothing more than a very expensive hassle for zero effect.

DeMonetization of 0.5k and 1k notes, yes?
To flush out BM rats, yes, ?
Based on intel available to NaMo, I presume.
What has that got Anything to do with printing 2k notes, and 0.5k notes of of a different design.
NaMo et al is probably killing half a dozen mango birds with his Astra stone, and that's about it, i.e.: mass activation of dormant account, clearing unpaid ute bills, and perhaps urging(making them!) folks to go cashless, etc.
Good, no ?
i.e.: where is the evidence to suggest he does not intend to replace notes pulled out ?

arshyam · Post by **arshyam** » 24 Nov 2016 06:57

TKiran wrote:But your celebrations are no match to my celebrations (or at least the literal meaning of it)

Perhaps, and more power to you. But if Hindus celebrating of festivals is based on my d*** is bigger than yours, then there is no difference between dharmic and non-dharmic traditions. Self goal much?

TKiran wrote: I will never hang my head in shame in front of mullahs... So Suraj San, Hindus will survive.. Thrive???? I don't know.

Are you saying that you celebrate at your scale only because of BM, or accounted for cash? Either way, you are implying that next year you won't spend as much for whatever reason. Clearly, that reason is not the pride you speak of, or else, you won't be much bothered by this move.

TKiran wrote:...now I am thinking where did I hear the arguments ' Dipavali without firecrackers' ' holi without water' etc... I am just thinking...

Not Primus, but just a small point to interject here. This past Deepavali was before this demonitization. The local temporary firecrackers stall (company operated) did accept cards and a quite a few people were using it. Of course, next year, they will have more PoS units on hands as a LOT of people will use it going forward. Don't see why not, after all, the rupee itself is a modern concept, while Deepavali has been around for millennia. The 500/1000 notes are even more modern concepts

.

Anyway, all this is going off on a tangent, so will stop adding to it.

arshyam · Post by **arshyam** » 24 Nov 2016 06:59

R_Kumar wrote:I think we are digressing. We should keep this thread for Demonetization only. What's the ground report? Are lines getting shorter? Since I don't see any related articles in news paper, my guess is that it's no more an issue any more.

Saw a Canara bank ATM in BLR yesterday. 3 people in line. Next door Axis bank ATM was closed. Office ATM has lost the crowd it had last week.

shiv · Post by **shiv** » 24 Nov 2016 07:20

The economy is slow and will remain slow. Paradoxically many people "on the ground" are patient and happy. An auto driver yesterday told me that his business has been down 30-40% but he simultaneously said that this must happen.

It is my hypothesis that the businesses that benefited most from the conversion of stashes of black to white through those businesses are the very ones who are going to be hit hardest in the "transaction" segment of black money. Obviously the hoarders are already out cold. I mean that if I had a stash of black money before demonetization I would use that stash in places where the government cannot detect the transaction. There can be thousands of such transactions part from real estate. If I employ a painter or carpenter and pay in hoarded cash that is a black transaction where previously black money joins the general cash pool without any tracking and without the tax benefit that should have gone to the government.

But the idea that "We must pay taxes" is itself seen as a poor business tactic and there will surely be people who say that a person who pays taxes is a poor businessman. Just sayin..

Prasad · Post by **Prasad** » 24 Nov 2016 07:29

At the risk of getting a ban hammer, if you want to preserve Hindu ethos and Dharma, put your money to better use and start lobbying our MPs to get equal status for Hindu institutions - temples, educational institutes, schools. RTE and govt control of temples is killing Dharma slowly and pretty surely and more than some local Muslim celebrating Eid. Spread awareness. Put that money into building a school or hospital or clinic that does constant actual work than blowing up money once a year in fireworks. Think big picture, since you talk about spending more than the other guy. Use your money intelligently rather than rage against govt trying to curb bm.

Ot apart, mother and uncles who all work in banks quite high up are saying that it notices have started going out. First notice is to people to bring docs n supporting data to explain money WITHOUT a CA accompanying them. From what I've heard of such questioning before expect them to turn up quite a few more bm hoarders. Also several bank employees have been caught exchanging old for new for local bigwig. Only a little has come out in the news. As always.

asgkhan · Post by **asgkhan** » 24 Nov 2016 07:41

arshyam wrote:
R_Kumar wrote:I think we are digressing. We should keep this thread for Demonetization only. What's the ground report? Are lines getting shorter? Since I don't see any related articles in news paper, my guess is that it's no more an issue any more.
Saw a Canara bank ATM in BLR yesterday. 3 people in line. Next door Axis bank ATM was closed. Office ATM has lost the crowd it had last week.

I went to my bank in MG Road along with my folks. There was no Q. Did the deposits, withdrawals, exchanged old currency for change in 100s, provided pending KYC docs, withdrew some cash from the ATM.
All tasks for us three, took around 45 minutes.

putnanja · Post by **putnanja** » 24 Nov 2016 08:06

I think 2k notes are stop-gap. I doubt they will make it widespread. Once the currency exchange issue is resolved, there really is no need to print any more 2k notes. My best guess is Rs 500 note will be the biggest denomination. 2k might just be to do exchange more efficiently at this time.