Currency Demonetisation and Future course of Indian Economy

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Karan M
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Karan M »

If enough 100's and 10's are put into the banks along with 500's, 90% of complaining would stop. The RBI/MOF as usual GOI babus and implementation mechanism are fraction of what Modi wants to deliver. Its his constant challenge and will remain for a decade at least. Public sector inability to scale and private sector unwillingness to (when they have to, they can move mountains). The entire 500/100 rupee issue apparently per reports happened due to RBI incorrect forecasting of impact of withdrawing existing 500Rs notes followed by chalta hain attitude displayed by MOF plus technical issues at Dewas and other places where notes were to be made.

Right now i bet Modi is getting hour by hour reports of deliveries of notes, and per moneylife report (basically GOI skeptic site), even IAF transports are getting bank notes to places. He is making the entire mechanism respond of GOI, with zero publicity.

I have my fingers crossed but believe he can do this and deliver by the beginning of Jan, people will remember this positively come 2019.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Picklu »

Karan M wrote:.....

I have my fingers crossed but believe he can do this and deliver by the beginning of Jan, people will remember this positively come 2019.
This is my worst fear. If things go back to pre nov 8th situation after all the hardship of mango people ......

Precisely the reason I want NaMo to do more to remove the BM generation part.

A corrupt govt employee who accumulated 5 crore BM even if retains 1 crore has 1 crore (and outside jail free time) too many. He would still maintain his life style above and beyond his legal means and common folks would curse
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Karan M »

Picklu saar, you usually have your finger on the zeitgist as they say, so I definitely take what you say seriously. Only thing though he has to be careful of overdoing the hardship part. Rumor mongers will have a field day claiming tax raids on everyone, your family gold etc will be taken etc. IMHO, he will basically reform GOI processes and then hopefully do + measures like that amazonizing GOI purchases etc. But then again, how would I know. Would never have predicted this demonetization.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by SRoy »

We will go back to pre Nov 8, situation.

Because

1. Peoples habit have not changed, Many are simply not realising and are are not ready accept when understood, that free flow cash would lead to accumulation, and in turn would fuel black market transactions.

2. GoI has no plan to accelerate cashless (or less-cash if you wish) market place.

PS: Just saw someone talking of UPI app on android. Whoever came out with that idea need to hanged by their testimonials. Neither would I buy a new phone just for UPI nor would I suggest older folks to ditch their reliable feature (semi - smart) phones for the same
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Sicanta »

SRoy wrote:We will go back to pre Nov 8, situation.

Because

1. Peoples habit have not changed, Many are simply not realising and are are not ready accept when understood, that free flow cash would lead to accumulation, and in turn would fuel black market transactions.

2. GoI has no plan to accelerate cashless (or less-cash if you wish) market place.

PS: Just saw someone talking of UPI app on android. Whoever came out with that idea need to hanged by their testimonials. Neither would I buy a new phone just for UPI nor would I suggest older folks to ditch their reliable feature (semi - smart) phones for the same
Feature phones too are taken care of by NPCI.

http://swarajyamag.com/technology/no-sm ... bile-phone
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

I would give people more credit than that. These are the same people patiently waiting in lines across the country. The same people who, despite all the media and opposition FUD, understand the big picture about BM because it hurts them, and has hurt them and the 2-3 generations before them. The same people who are making history's largest demonetization exercise proceed far ahead of schedule. I know that there are frayed tempers and grumbling, and I'm not ignoring that. I'm stating that despite all that, the raw rate at which cash is flowing into the system is far faster than anyone would have estimated at the outset, and that certainly includes me as well. The people deserve credit for that, and that includes the banking personnel who are doing a very difficult rush job knowing that their work is ignored and only their failures are being highlighted at this point.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Picklu »

^^ That is one of the point of worry Suraj. Cash is coming back way more than expected. Then where is the BM? If it is coming back to the banking system, then it means that the mofos who were enjoying it before, will continue to enjoy part of it after as well.

And that would not be liked by most of the mango folks like me. Because a large part of the mofos have not 'earned' it, whether tax/commission paid on it or not.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by nachiket »

Picklu wrote:^^ That is one of the point of worry Suraj. Cash is coming back way more than expected. Then where is the BM? If it is coming back to the banking system, then it means that the mofos who were enjoying it before, will continue to enjoy part of it after as well.

And that would not be liked by most of the mango folks like me. Because a large part of the mofos have not 'earned' it, whether tax/commission paid on it or not.
That is the problem of uninformed mango folks then. Once the money is deposited, an IT audit done and taxes+fines paid, the leftover money is no longer BM and government has no authority to confiscate it. If the money wasn't legitimately "earned" that fact will come out during the IT audit or it won't depending on whether that person has found a good enough way to explain it. There is nothing more that the government can do.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Karan M »

Are picklu saar, remember our heated debates post 2014. wasn't it you who made the very point, revenge can wait, but first modi has to deliver? i think till 2019 it will be all that. after that bigger danda. india won't be the same, for better or worse time will tell. hopefully most of his moves will work out.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

Picklu wrote:^^ That is one of the point of worry Suraj. Cash is coming back way more than expected. Then where is the BM? If it is coming back to the banking system, then it means that the mofos who were enjoying it before, will continue to enjoy part of it after as well.

And that would not be liked by most of the mango folks like me. Because a large part of the mofos have not 'earned' it, whether tax/commission paid on it or not.
Well, you tell me, how does the government handle popular psychology ? People respond to scarcity of cash by hoarding more of it. Take habal for example - he screams about liquidity and keeps 100xRs.500 with him at the same time. Instead of people collectively spending cash to ensure every person can obtain cash from various sources where they are transacting in cash in small amounts, people hold it and demand GoI print more cash. All that new cash also gets absorbed, part of it into BM.

IMHO, in the short term this is unavoidable. I have mentioned this issue several times in this thread, but it's clear people can't work collaboratively by and large. It's hard to explain that the easiest way to ensure access to cash is to spend cash, not save it. Anyone who withdraws Rs.20000 and spends a few hundred or thousand a day still makes the rest of that cash inaccessible to everyone else until he gets to spending it, forcing GoI to print more.

This is why, IMHO, GoI went for the Rs.2000 . BMers will for sure build up their supplies again. The 2000 is an easy bait - they need fewer notes than for 1000 or 500. My understanding is that the utility of the 2000 is to target BMers. A few years from now, 2000 will be demonetized. It will not be possible to exchange it at all, but can only be deposited. It will get back a significant part of the BM 'froth' that has built up again slowly in this process.

The demonetization process was never going to be perfect. Before one blames RBI and GoI, also remember that popular behavior to cash scarcity itself is part of why the process is not perfect. No one's perfect here - not the people and not GoI. Various analysts projected an approx 90% effectiveness, which in itself would be excellent. But by and large this is an incredible exercise, being executed significantly better than anyone would have guessed beforehand, considering we're way past the half way mark already.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by nachiket »

Picklu wrote: A corrupt govt employee who accumulated 5 crore BM even if retains 1 crore has 1 crore (and outside jail free time) too many. He would still maintain his life style above and beyond his legal means and common folks would curse
The government can only punish these people to the extent of the law depending on what can be proved against them. Any further wishes for revenge cannot be granted by the government.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Picklu »

^ That is the hope bro, that is the hope.

In this particular case though, getting rid of BM is the delivery. While taking away the storage is important first step, catching the generation of BM is part and parcel of it. That is not revenge.

The reason I am saying this is again from personal experience. The ask for bribe has actually gone up in namma bengaluru and it is all white now.

As Nachiketji says "whether that person has found a good enough way to explain it" is exactly the way it is going and obviously that is not being liked by people who are facing so much hardship.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

Picklu, the story isn't over. When the demonetization process started, the shrieks were that the fatkats were converting it into gold and land, so only mango men are hurt. Turns out that's wrong, mango men despite the inconvenience support it, and lots of fatkats are indeed burnt badly. As for land, Modi followed it up by asserting that once DeMo winds up on Dec 31, the Benami Act will be enforced. He further followed that up by asking for gold ownership to be declared so its provenance is known through records, with a useful amount left as lenience to account for basic gold ownership.

The larger point here is that GoI is not really clueless. There are implementation issues at various levels, but they 'get' the big picture. It would be reasonable to expect that a massive dragnet against government personnel will follow to unearth new black money accretion .

Also, did you install the NaMo app ? It sends you an email from Modi asking for feedback on demonetization. I recommend using it. I did.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Picklu »

Suraj, I completely understand the psychology and hoarding part. Which is why I am for more measures against the BM generation itself rather than just targeting the storage.

Your explanation of DeMo so far is to make the storage difficult for the BM holder which is a bit of a deterrent no doubt but enterprising folks would figure out a way to do it in above board manner. The scrutiny of wealth by the tax man alone can not catch the public facing BM holders beyond a point because these BM holders are relatively small fry in the larger scheme of things but they are large in volume and irritate the public most.

I am sure the gov is not clueless and working out various schemes to catch these buggers.

Just personally, I would like to see
a. these other measures targeting non business BM holders coming out sooner
b. the firm push to the hold out among merchants in the digitized camp
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

Government cannot afford to take on the entire administrative structure for its corruption, at a time when they're being tasked with executing DeMo . It would necessarily have to follow DeMo. Basic execution maxim - don't start another fire while you're busy combating a really big one.

Success of any effort is a result of executive control over administrative structure. In our system, the executive is strong, but administrative execution mechanism requires careful handling. Modi spent 2 years shuffling people around to enable him to do the big plans he had. He cannot compromise it by having elements of that structure act against him in the middle of the greatest economic reform action executed in India since liberalization.

We are currently in the middle of the storm. It's just another month of riding it out. I think things will get better, simply because we have one of the best executive power groups in the world, in the form of the Modi PMO, running our country. Once DeMo is over, I think we can expect a more direct action against systemic corruption within the admin structure.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Rishirishi »

The real cool thing would be if Modi already has printed a mountain of Rs 500 rupee notes. After the 31st he demands back the RS 2000 notes within 4 days. After that the the mountain of Rs 500 notes are released. Guess it will be wish full thinking.

In retrospective i think it would have been better to only demonetise RS 1000 rupee note and only given them 5 days to hand it to banks.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Picklu »

And last but not the least, "lot of fatkats burnt badly" is just equally hearsay, same as "lot of BM holders have converted completely in WM without significant loss".

I am sold in the long term planning of this gov anyway. Also, I understand the importance of keeping faith patiently and not to add to the shrill voices of mejriwals so would keep quite but mango people would need to see actual proof of burning post 1st Jan to retain the credibility else "15 lakh in everyone's bank account" would come back louder.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Picklu »

nachiket wrote:
Picklu wrote: A corrupt govt employee who accumulated 5 crore BM even if retains 1 crore has 1 crore (and outside jail free time) too many. He would still maintain his life style above and beyond his legal means and common folks would curse
The government can only punish these people to the extent of the law depending on what can be proved against them. Any further wishes for revenge cannot be granted by the government.
You are telling me that fine by TT is the way to attain compliance in Indian Railway. I am telling you, its not. We would also need the automated access controlled entry and exit systems, so to speak.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

Picklu wrote:And last but not the least, "lot of fatkats burnt badly" is just equally hearsay, same as "lot of BM holders have converted completely in WM without significant loss".
This isn't hard to quantify actually. At least not the cash value. It will be known post Dec 30 when RBI reports how much of outstanding cash was not deposited back. How does 1-2 lakh crore (my estimate) sound ? The drop in price of RE is a picture of how much economic value in black money was destroyed by DeMo. Granted it's a paper loss at this point, but what's more, it's not the end of the story, since the BMer selling that property one day will face additional tax and penalty for non-disclosure of BM in the purchase. In this regard, the Benami Act prosecutions will give a picture of how much of the real estate value held in black was lost as paper value and subsequently taxed or penalized further. These are all 'really big numbers' (e.g. 10s of lakh crore), and it's just a question of whether it's 'big enough for Picklu' :)
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Re: Currency Demonetisation and Future course of Indian Economy

Post by UlanBatori »

How does 1-2 lakh crore (my estimate) sound ?
Somewhere I read that the COST of replacing old currency with new was like 12 lac crores. Didn't make much sense, but seems like the old dictum:
You lose 3 cents on every item you sell, but you make up on Volume
I am :?: :?:
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

Rs.12 lakh crores is ~$180 billion. It should be easy to guess that such a claim is off by about 2 orders of magnitude.

Rs.1-2 lakh crore not being deposited by Dec 30 does not mean GoI loses that money. It means the opposite - they gained 1-2 lakh crore in free money with no stakeholder in the form of a depositor placing a liability on it.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by vina »

Got an email yesterday from my dad with some customer id and other details , etc.. So called him back. What he was trying to do was register with the Electricity Discom website to pay bills online. HE, the all cash, I don't need no stinky cards guy, I don't do online anything guy (he calls and asks, how do I get xyz from Amazon, so I order it for him online and it gets delivered home), I get cash and hence spend cash guy, the all deposits only and no withdrawal guy (all his ATM cards expire, bank guys plead with him to use it at least once a year and withdraw Rs 100, but no..), the only time he does anything electronic with the bank is to check the balance and accounts (to see if his pension is deposited properly) guy.

Looks like this time, my parents don't have cash on hand to pay the electricity bill (Rs 5000 approx, in TN I think the billing is bi monthly), so they wrote a cheque and the Discom guys told him that they normally don't accept personal cheques , but this time, they would , but in future, they will need to write a letter along with the cheque and do some stuff in "triplicate and have it laminated" etc to accept it.

So, they came back home and tried signing up for online payment with the Discom, and since they ran into some issues with that, sent that email to me. I signed up for them and the Discom sent the activation link to them , and I called my mom and told her to go ahead and pay using the debit/atm card. That is when she told me the story about the cheque and letter in future business and that they plan to do pay online going forward, and in fact, that will be the FIRST time, they will be using their ATM/Debit cards to do ANY transaction other than withdrawing cash from the ATM!

Now, it might seem small, but believe me, that is a massive behavioral change. After paying that electricity bill online, my parents will NEVER again go with cash and pay in the counter .. It is just too inconvenient and idiotic to do so. I never saw the point in lining up to do that. Same with BSNL bill, same with all the cooking gas and any other stuff that can be done online.

And today, I will ask them to sign up with a wallet with one of the banks with which they have an account and teach them to use the embedded visa/mastercard online to make transactions..

If I can convince them to apply for a credit card, that will be immense. The banks have been trying to sell one to my dad for 25 YEARS now, without success. Maybe NaMo's , DeMO would make that happen! :eek:
Last edited by vina on 03 Dec 2016 05:45, edited 2 times in total.
durairaaj
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Re: Currency Demonetisation and Future course of Indian Economy

Post by durairaaj »

^^Possibly numerical conversion error.

The cost of demonetisation for the RBI was 12 thousand crore as doing the rounds in news.
It is not 12 lakh crore.
However this cost does not include the cost incurred by defence forces in transporting and damages to bank etc...
This is only for paper and printing.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

Even 12,000 crores for cost of printing is WAY too high. The rough cost of printing a Rs.10 note is under Re.1 . Rs.500 is about Rs.2.50 and Rs.1000 costs just over Rs.3 to print. Let's go with Rs.3.5 for the new 2000 note. Say the new notes are printed 60:40 ratio. The total printed currency value would be Rs.1,44,00,00,00,00,000 and Rs Rs.2,70,00,00,00,00,000 , or Rs.41.4 lakh crore, or way more (>2x) than the entire cash previously in circulation, including all the 100s and lower denominations.

In other words, the estimates don't make any sense. They're off by an order of magnitude, considering GoI probably won't print more than 2-3 lakh crore worth new cash, based on estimates for demonetization of between 65-75% . Rs.1200 crore is a better estimate.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by gashish »

DeMO execution - many who are complaining about this are not able to appreciate the complex logistics of largest DeMo execution ever.

I did read a post or article few days ago on this board on the sheer numbers involved (of cash, printing paper and distribution, atm calibration etc) in this exercise. Not able to locate that post. If anybody can point to it, would appreciate...thanks!
Last edited by gashish on 03 Dec 2016 06:06, edited 1 time in total.
durairaaj
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Re: Currency Demonetisation and Future course of Indian Economy

Post by durairaaj »

Your calculation makes sense.

In another news article, RBI has already printed 3 lakh crore worth of 2000 Rs in Mysore. Thats why the number of errors in 2000 Rsnotes are minimal. But there is no mention of the amount of 500 Rs notes.

RBI should consider bringing in more low denomination notes from early next year and restrict the higher denomination ones.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by shiv »

SRoy wrote:We will go back to pre Nov 8, situation.

Because

1. Peoples habit have not changed, Many are simply not realising and are are not ready accept when understood, that free flow cash would lead to accumulation, and in turn would fuel black market transactions.

2. GoI has no plan to accelerate cashless (or less-cash if you wish) market place.

PS: Just saw someone talking of UPI app on android. Whoever came out with that idea need to hanged by their testimonials. Neither would I buy a new phone just for UPI nor would I suggest older folks to ditch their reliable feature (semi - smart) phones for the same
None of the UPIs are working well. Only PayTM seems to be consistent.

But there is one thing that does not require a smart phone provided your mobile no is registered with your bank account

On any mobile dial *99# and give it a try..
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Re: Currency Demonetisation and Future course of Indian Economy

Post by shiv »

Why do I get the feeling that there is a deliberate act of slowing the introduction of Rs 500 notes?
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Re: Currency Demonetisation and Future course of Indian Economy

Post by vina »

shiv wrote:None of the UPIs are working well. Only PayTM seems to be consistent.
True. The banks have not pushed UPI and neither is that ecosystem in place yet. But going forward, UPI will be the way to go and all the wallets (irrespective of who you have it with) will become interoperable and have UPI in them.

Ajay Shah / Ajay Shah (a very very smart Madrassa Ejjukated cookie.. I love his contribution to the package "zoo" , a time series package in R, a statistical software package.. I use it extensively) wrote about opening UPI and IMPS interfaces out to tech companies. Right now it is by the banks, for the banks and they simply don't allow anyone else to touch it fearing loss of business. Now it will be pried open and now you will see a wave of signing from the merchants site and also a huge push from the banks and govt.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Marten »

And of Rs 100? They ought to push more in soon. Maids were saying the running rate for 2000 was 1800, meaning they lose 200 for each big note. That is a horrible cost for someone who earns 4/5 of those big notes. This multiplied by millions of people will result in Pappu 2019.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Gus »

shiv wrote:Why do I get the feeling that there is a deliberate act of slowing the introduction of Rs 500 notes?
I think so too. They will drag it out until Dec 31 before going full fledged on 500. They are gambling that hoarders be forced to come clean or hoard 2000. Enough hints are there that 2000 is temporary.

Reminds me of those discovery channel type videos where predators herd prey into kill zone. Result is to be seen, but the intent is to block all other ways except declare
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Re: Currency Demonetisation and Future course of Indian Economy

Post by arvin »

I feel 500 is a mirage or just a rafale to be acquired in very limited numbers. Limit of 2000 is also to discourage people from using cash. Even after dec 30 I feel limit of 2000 at ATM would be enforced but with 100s and 50s. My speculation is like 500, flow of 2000 would be gradually reduced by next year end or earlier and probably by next year end we would be having only 100,50,20,10,5,2,1,0.5.

I wont be surprised if namo reintroduces chavanni aka 4 anna aka 25 paise.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Kakkaji »

Here come some concrete figures and estimates:

Rs 2.5 lakh crore won't come back into banking system: SBI
In a report, the Economic Research Department of State Bank of India (SBI) said "around Rs 2.5 lakh crore on a conservative basis will not be coming back into the system".

As per the SBI analysis, the market estimate of Rs 14.18 lakh crore currency -- excluding cash with banks -- is based on March 2016 data while in reality it should be based on data available as on November 9, a day after demonetisation was announced.

SBI noted that going by data as on November 9, the amount of high currency denomination notes was Rs 15.44 lakh crore (excluding cash in the banks), an increase of Rs 1.26 lakh crore compared to the March figure.


It stated that RBI has published twice the deposited and exchanged notes data with banks in November with a gap of 9-days. SBI said: "If we closely look at the data, the daily working day average deposited/exchanged at banks has declined significantly from Rs 605 billion (November 10-18) to Rs 501 billion (November 19-27) -- a decline of 17 per cent."

In total, between November 10-27, Rs 8.44 lakh crore were deposited and exchanged in banks, the report said.

"All these estimates put together show that total money coming into the system in the form of high denomination will be around Rs 13 lakh crore (as against Rs 15.44 lakh crore high value notes as on November 9)," it added.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Karthik S »

So that's 2.5 lakh crore and 50% of undocumented money is net income to the government in the short term.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Kakkaji »

arvin wrote:I feel 500 is a mirage or just a rafale to be acquired in very limited numbers.
No.

The reports say that the highest volume printing press, the RBI printing press in Mysore, is only now switching over to printing the Rs 500 notes, starting Monday. Until now, the two smaller capacity GoI printing presses were printing the Rs 500 note since early November.

One of the stories mentioned that it is a 21 day cycle from start till the newly-printed notes are ready to be shipped out. So the estimates are that the big volumes of Rs 500 notes will not hit the market till later this month.

People are asking why did the Govt not start high-volume printing of Rs500 notes earlier, instead of the Rs2000 notes? If the Govt had done that, it would have tipped off the BM hoarders that the existing Rs500 notes are about to be replaced. Rs2000 note was the perfect ruse IMHO. The BM hoarders with sources inside the RBI must have been eagerly awaiting these higher denomination notes, so that their own stash in future needs smaller suitcases to carry and store. :wink:

I think the pain should start subsiding towards the end of this month. By the end of March there would be enough currency in circulation to take care of the legitimate cash transactions.

JMT
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Kakkaji »

Some posters have mentioned above that Indians do not like paying any tax. I can empathize with that.

When I was growing up in India, I thought it was foolish to pay any tax to the Govt, as it would only be stolen by the politicians and bureaucrats. Remember when Rajiv Gandhi himself admitted that only 15 paise out of every Rupee spent by the GoI reaches the intended beneficiaries? I thought people were justified in not paying tax, as the Govt was not providing any value for tax money to the people.

When I came to the US, I saw the nice roads, libraries, responsive Police and emergency services, and I thought people are getting value for their money, so I did not mind paying tax. Now I tell my friends and relatives from India that I don't mind paying tax here as I get value for my money. Of course I take as many deductions that I can take, but I do not grudge the tax money leaving my hands at the end.

So, in my personal opinion, if the tax rates are reasonable (not like 90%+ rates during Indira Gandhi period) and the people trust the Govt will provide services and not steal it, the people's mindset will change towards paying taxes.

In India, the NaMo Govt is the first one in my memory where the PM has personally put so much emphasis on making sure that the tax money is spent, without leakage, for the benefit of people. I would not mind paying taxes to such a Govt.

The one fear I have is, once NaMO brings all the income above ground, and then he loses power, the Congress and others will have a readymade pot of gold to loot from. :eek:

JMT.
Sachin
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Sachin »

Suraj wrote:
shravanp wrote:btw, Lok Sabha passed IT Amendment Bill and opposition is crying their lungs out. Is this a money bill or would it be subject to Rajya Sabha's atrocities?
Money bill. It'll pass without a hitch.
The opposition was whining that even in Lok Sabha the bill was not debated upon, and just passed using voice vote (with the voices of commies and other riff-raffs getting ignored completely).
Subdas
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Subdas »

This demonitization is nothing but "computerisation of payment system". Think how these kind of computerization reforms initially panned out - from banking to telecom. There was lot of opposition and fear mongering but eventually the human urge for improvement driven change say them rolled out and delivering endless benefits to the majority. The same will happen in this reform.
Yagnasri
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Yagnasri »

JohnTitor wrote:One idea for reducing the use of cash in real estate transactions would be to fix the taxes, stamp duty etc based on the average price of the area. For instance, if properties in a certain part of Blr, KL cost 5000 /sqft then the tax could be collected as a % of this. This means that irrespective of the actual transaction cost, the "right" amount of tax would need to be paid. It would also mean that the larger the property, the higher the tax. But this would only work if a regular survey of the average transaction price is conducted - perhaps once a year or something like that.
This is now OT I think. But such systems is already in place, and Stamp Duty and registration charges will be charged like that only. But in reality, most of the time the real price of the property will be more that the base price as per the respective state Gov. Here the solution is to do away with both these items of payment and take a formal expense amount for registration say Rs. 1000 and register the document. To cover the loss of revenue property tax may be taken at a small higher rate.
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