Currency Demonetisation and Future course of Indian Economy

Akshay Kapoor · Post by **Akshay Kapoor** » 14 Dec 2016 15:33

RajeshG wrote:
Akshay Kapoor wrote:KItna tha ?
Kapoor saab, With respect, there could be more then 2 sides to an issue. But it definitely is interesting that people feel that the only reason somebody might criticise notebandi would be because they have lots of maal. To each their own I guess. Last from me on this. Jai Hind.

Jai Hind Rajesh Ji. Best of luck.

PS - Btw maal is not the issue. Maal Bacha ki nahi is the issue. It's human nature - people spend so much time and effort (especially the great business acumen Ines) trying to convince others only if there is a strong personal hit. Maal to mere paas be hai - mostly white. I have a cousin in IPS he is quite a straight chap and very aggressive even sometimes but in the last 3/4 years he had a posting here he had to take some maal in lacs not crores. Was under too much pressure. looked the other way on a civil matter that was in someone else's jurisdiction. Anyway he has decided to not deposit the majority of his stuff. He is happy that demo is happening and told me yesterday ' am glad this stuff has gone. I was feeling very uncomfortable - not used to it. Thank god Adat nahi padi'

Akshay Kapoor · Post by **Akshay Kapoor** » 14 Dec 2016 15:36

Akshay Kapoor wrote:
RajeshG wrote:
Kapoor saab, With respect, there could be more then 2 sides to an issue. But it definitely is interesting that people feel that the only reason somebody might criticise notebandi would be because they have lots of maal. To each their own I guess. Last from me on this. Jai Hind.

Jai Hind Rajesh Ji. Best of luck.

PS - Btw maal is not the issue. Maal Bacha ki nahi is the issue. It's human nature - people spend so much time and effort (especially the great business acumen Ines) trying to convince others only if there is a strong personal hit. Maal to mere paas be hai - mostly white. I have a cousin in IPS he is quite a straight chap and very aggressive even sometimes but in the last 3/4 years he had a posting here he had to take some maal in lacs not crores. Was under too much pressure. looked the other way on a civil matter that was in someone else's jurisdiction. Anyway he has decided to not deposit the majority of his stuff. He is happy that demo is happening and told me yesterday ' am glad this stuff has gone. I was feeling very uncomfortable - not used to it. Thank god Adat nahi padi'

Both of us sleep peacefully at night. Haan there are some people in the extended family (Retired IAS, IPS types) who do need sleeping pills these days !!

shiv · Post by **shiv** » 14 Dec 2016 17:35

I-T seizes Rs 2.25 cr from a flat in Bengaluru

In yet another startling catch, the Income Tax Department today seized a total of Rs 3.57 crore cash, with Rs 2.93 crore in new notes, from Karnataka and Goa with a huge stash being recovered from a flat here which was guarded by two ferocious dogs and an old woman.

The department said it has detected unaccounted income worth Rs 1,000 crore as part of 36 operations launched till now by it in these two states.

My Bengaluru is beating all your other loser cities hollow in black money and cheating - so there

Sicanta · Post by **Sicanta** » 14 Dec 2016 18:40

Rs 70 cr cash, 170 kg gold seized at airports in India post note ban

http://www.business-standard.com/articl ... 564_1.html

Govt to audit banking tech infra, look at IT act review to tackle cyber crime

http://www.business-standard.com/articl ... 384_1.html

The government plans to review the Information Technology Act to bring in provisions that have rules to tackle cyber crime while looking to audit the technology infrastructure of National Payments Corporation of India for possible holes that could be exploited by cyber criminals.

The government, which plans to strengthen the country's computer emergency response team or CERT-In, with ethical hackers who would respond to cyber breaches across the country, has directed digital payment agencies to report to CERT-in any unusual activity on their platforms. The IT ministry has approved setting up of CERTs in five states and creating 26 new posts in CERT-In.

The government's push for legal backing is also due to the lack of provisions to compensate consumers if they lose money due to a cyber breach on wallets. The IT ministry has already set up a small group of officials under secretary Aruna Sundararajan.

"The Act came into being in 2000. It has, by and large, served us well. Now, as we move towards a digital economy, we are reviewing if there is a need to relook at its architecture, to make it more deterrent for cyber criminals," Prasad said.

The government has formed two teams in CERT-In, one to respond to cyber-attacks and the other to monitor digital payments, which has, in the past one month, seen a 1,000 per cent surge. The ministry has till date issued eight advisories on the usage of different types of digital payments.

hanumadu · Post by **hanumadu** » 14 Dec 2016 18:44

Amit Malviya ‏@malviyamit 2h2 hours ago
Sons of three former UPA ministers caught on CCTV withdrawing huge cash amounts.. http://m.indiatvnews.com/news/india-son ... ort-360846 … Earthquake?

Sicanta · Post by **Sicanta** » 14 Dec 2016 18:51

Rs 2,000 notes a temporary arrangement, will be ultimately withdrawn

http://www.business-standard.com/articl ... 151_1.html

Gurumurthy, who is said to be in the loop all through the demonetisation process, said in an interview with India Today news channel that the Rs 2,000 note was introduced only to meet the demand-supply gap after Rs 500 and Rs 1,000 notes were sucked out of circulation.

He said the banks would be asked to hold back Rs 2,000 notes and replace them with lower denomination notes.

"Obviously, the banks will be told not to return Rs 2,000 notes they receive. Slowly, the banks will accumulate Rs 2,000 notes and replace them with lower denomination notes," said Gurumurthy, a prominent member of the RSS-backed think tank Vivekananda International Foundation.

He said the government would be phasing out Rs 2,000 notes and not demonetising them.

durairaaj · Post by **durairaaj** » 14 Dec 2016 19:02

Is there any update on the earthquake that was supposed to hit Delhi today with its epicenter right under the seat of the enlightened prince. I could not find any news and am afraid that I may miss out some crucial information and be caught unaware.

Subdas · Post by **Subdas** » 14 Dec 2016 19:02

80% of transactions used to be in paper notes and this habit of aam admi is not going to change over night. Before, they needed 1 visit per week to fulfill their cash needs but now they will 4 trips per week. This will ensure that there will be ATM queues for some time to come, may be few years.

Suresh S · Post by **Suresh S** » 14 Dec 2016 19:04

Demonitization and opening of millions of accounts are the crowning glories of Modi govt. I predict a landslide for modi in 2019. This must have been the most risky thing the prime minister has done because it affects everybody. In importance I would almost rank this as going to all out war with shitistan. Who will make that landslide happen, the poor people of India , they may be poor but they are not stupid.

kvraghav · Post by **kvraghav** » 14 Dec 2016 19:06

Either Bangalore is very corrupt or the Badlands of UP and Bihar are too difficult to enforce LAW.

Rishi Verma · Post by **Rishi Verma** » 14 Dec 2016 19:35

Delhi HDFC Branch with 150Cr Deposits

Learned a new term "entry operators"

Some of these accounts saw cash deposits of about Rs 30 crore each between November 8 and 25, which were transferred out to beneficiaries who are suspected to be 'entry operators'.

The term 'entry operator' is used by investigating agencies to refer to individuals and hawala dealers who create shell companies, open bank accounts in fictitious addresses, deposit huge unaccounted income in cash in these accounts and layer it with circular transactions in multiple accounts before the money is finally transferred to beneficiaries

Another entity "Financial Intelligence Unit" of the ED.

The Enforcement Directorate has tracked suspicious cash deposits of about Rs 100-150 crore in the Karol Bagh branch of HDFC Bank after officials surveyed half-a-dozen accounts in the bank based on a tipoff from the Financial Intelligence Unit (FIU) last week.

shiv · Post by **shiv** » 14 Dec 2016 19:56

kvraghav wrote:Either Bangalore is very corrupt or the Badlands of UP and Bihar are too difficult to enforce LAW.

Bangalore is deeply corrupt - but runs because of a layer of very honest people and further funded by honest taxpaying ITvity types.

The depth of corruption in local and state government is astounding. Unscrupulous motherfungers abound. It is a deeply corrupt place. Because of the weather and the money too many people move into Bangalore and are conned into paying humongous amounts of cash for ridiculously overpriced real estate in enclaves that have fancy weshtern names to attract sucker NRIs and wannabes from other places in India. Step outside and you see no link roads, no water supply no nothing - and traffic jams choke up the city

Bangalore needs to fail to get better and our government seems to be doing everything to make it fail. For many decades the government has sold lakes, forests and government land to developers for layouts with narrow roads and no access, power or water - which builders build on and advertise in fancy hoardings.

There are annual meets to attract investment into Bangalore. During last year's meet our state govt stopped all truck traffic from entering Bangalore during the investors meet and dolled up key roads to make sucker investors with bursting pockets think that this is wonderland. Bangaloreans in the state and local govt have no intention to save Bangalore. All they want to do is make money money money money money money money money, make more money make more money from the suckers of Bihar UP and other states.

Bihar/UP are so bad that rich men send their kids for an education to colleges in bangalore - which at last count had 25% of all engineering seats in the country (or some such ridiculous figure). And these Biharis/UPites pay tens of lakhs or crores for those seats so that the government makes money form the people who start these colleges.

Doctors live in Bangalore and are visiting faculty in some of these places for 1-2 days a week. Whene there is an inspection everyone is presesnt to continue the licence for the college. The inspectors get a fat faat envelope.

Welcome to bengaluru

Nitesh · Post by **Nitesh** » 14 Dec 2016 20:12

The value of deposits include the taxes paid to state or municipalities/ water bills/ electricity bills and the loans cleared too, or it is plain deposits only? Does this includes the deposits in Cooperative banks too, because they all have one account in sponsor banks right?
I don't see any news after SBI said that there might be double counting, so is this value free of double counting?

Manish_Sharma · Post by **Manish_Sharma** » 14 Dec 2016 20:21

astal wrote:
Until we know how the additional income will be spent, looking at this from a right wing left wing perspective is speculation.

It is shauryaT's old tactic to use "Dharm" "Dharmikta" or "ideology" as a cover to forward what is convenient to himself.

In Siachin thread, he was continously quoting "gumeet kanwal" as all knowing god on the issue. When the then General Shri V.K. Singh gave interview to Arnab Goswami telling how wrong it will be to vacate the Siachin and exposing the lies of gurmeet kanwal, General had said : ....they (pakistanis) are not on Siachin, its not a mutual withdrawal....

Shaurya brushed aside serving General's views, "....govt will do what it thinks is right..."

Ha haaa, now the govt. is doing what is right, so he brings 'ideology' and economists.

If someone's relations were doing business in 'black' money and suffer gooood very gooood !

If living in switzerland still someone claims to be well wisher of Bharat, but claims that he knows by what tactic the black is being turned white by his relatives still refuses to reveal what do you call such person?

ShauryaT · Post by **ShauryaT** » 14 Dec 2016 20:54

shiv wrote:
The depth of corruption in local and state government is astounding. Unscrupulous motherfungers abound. It is a deeply corrupt place. Because of the weather and the money too many people move into Bangalore and are conned into paying humongous amounts of cash for ridiculously overpriced real estate in enclaves that have fancy weshtern names to attract sucker NRIs and wannabes from other places in India. Step outside and you see no link roads, no water supply no nothing - and traffic jams choke up the city

Bangalore needs to fail to get better and our government seems to be doing everything to make it fail. For many decades the government has sold lakes, forests and government land to developers for layouts with narrow roads and no access, power or water - which builders build on and advertise in fancy hoardings.

There are annual meets to attract investment into Bangalore. During last year's meet our state govt stopped all truck traffic from entering Bangalore during the investors meet and dolled up key roads to make sucker investors with bursting pockets think that this is wonderland. Bangaloreans in the state and local govt have no intention to save Bangalore. All they want to do is make money money money money money money money money, make more money make more money from the suckers of Bihar UP and other states.

Bihar/UP are so bad that rich men send their kids for an education to colleges in bangalore - which at last count had 25% of all engineering seats in the country (or some such ridiculous figure). And these Biharis/UPites pay tens of lakhs or crores for those seats so that the government makes money form the people who start these colleges.

Doctors live in Bangalore and are visiting faculty in some of these places for 1-2 days a week. Whene there is an inspection everyone is presesnt to continue the licence for the college. The inspectors get a fat faat envelope.

Welcome to bengaluru

Not exceptional and a similar story in any other city in India. The need of the hour screams devolution of power and accountability. To expand on this, is to understand the evolution of government structures in our cities and rural districts, their sources of revenue, who is responsible to whom and under what authorities and ask the question, was it ever designed to serve the people? Anyways an OT topic but IMO, the most important to achieve a marked change in governance in India and peoples daily interactions with their living environment. There are enabling things here a central government can do, however so far what we have seen is its energies spent on further centralization. A simple case in point is GST. A third of the Mumbai budget came from the draconian Octroi system. This will now be replaced by discretions from the State Government and other things the city government will do to replace the revenue including fees, stamp duties, property tax, etc. The number of legislators NOT vested in Mumbai far outweigh the number from Mumbai, permanently putting the city at a disadvantage for fund allocations of the state. I am using Mumbai as an example, similar issues for Bengaluru too.

The funny thing is even the CPC / Deng Xiaoping recognized the importance of effective local governance and worked on this issue since the 80's.

Rishi Verma · Post by **Rishi Verma** » 14 Dec 2016 20:58

Pune Bank Lockers Yield 10cr

Owners of the lockers are being tracked

Hopefully like tracking fox with blood hounds.

Marten · Post by **Marten** » 14 Dec 2016 21:30

Aapla Pune mhanje Pawarful people in which case amount is wrong (it should be 10,000cr) or chappalchors like Kalmadi.

Prasad · Post by **Prasad** » 14 Dec 2016 21:47

Rishi Verma wrote:Pune Bank Lockers Yield 10cr

Owners of the lockers are being tracked
Hopefully like tracking fox with blood hounds.

How did they get authorisation to open bank lockers?

ShauryaT · Post by **ShauryaT** » 14 Dec 2016 22:03

RajeshG wrote:Not Shaurya but the "ideology" being referred to is not "hindutva" or "secularism". I think the ideology being referred to is communism/capitalism. The writer is most probably a libertarian.

I am not privy to the author's ideologies. I was mostly surprised by the article and its well referenced view points on a topic I did not expect the author to dwell into. The reason for the surprise is the author is an ex IA officer. A scholar in a non-partisan think tank. He is mostly known for his military historical works and has written an excellent book on the IA's role in WW II - written from an Indian perspective.

Sachin · Post by **Sachin** » 14 Dec 2016 22:20

Akshay Kapoor wrote:Could you pls ask your SHQ - what in her view is the leakage that has happened because of this - 1 pct, 5 pct , 10 pct ? I know no one in the banking system or finance ministry or investigating agencies so some perspective from a real practioner would be very useful. I know it's a very hard question as no one knows yet but just her best guess and her sense of the situation.

SHQ works in a remote/rural branch and not at high position. SHQ's bank have around 70 odd branches in the city. But at her branch, she did say that around Rs.4 lakh worth of new notes, were exchanged for the old Rs.500 & Rs.1000 notes every day, when the "exchange" scheme was opened. Again these exchanges were also done by few rich folks in the locality (which every one knows) using poor people as "mules". But the "mules" came in with the money & with valid ID proofs so nothing could be done. Even then the staff at her branch were hearing rumours of large scale money laundering happening at the higher offices. Currency chests of banks, and RBI were even then considered to be the "leaking points". Assuming that Rs. 4 lakh (in my example) was laundered by one single chap using mules, he would not have been able to get more than Rs. 56 lakhs laundered (the exchange scheme was open only for 14 days). That is not the type of money in new notes which are getting seized these days.

shiv · Post by **shiv** » 14 Dec 2016 22:23

ShauryaT wrote: The need of the hour screams devolution of power and accountability. To expand on this, is to understand the evolution of government structures in our cities and rural districts, their sources of revenue, who is responsible to whom and under what authorities and ask the question, was it ever designed to serve the people? Anyways an OT topic but IMO, the most important to achieve a marked change in governance in India and peoples daily interactions with their living environment. There are enabling things here a central government can do, however so far what we have seen is its energies spent on further centralization. A simple case in point is GST.

You are creating a strawman to bash the centre.

Cities have 1 political representative for 50,000 people compared to 1 per 5000 in villages. Budgets are opaque and political parties vie for power in local government (city corporation) where there should be no political rivalry. The center has very little control over any of this, but GST is actually positive.

Another positive would be conducting local, state and central elections at the same time.

And yes demonetization has, for the moment taken the steam out of the most corrupt and arrogant local and state government officials. The flow of money has been temporarily arrested.

madhu · Post by **madhu** » 14 Dec 2016 22:48

Twitters are showing picks of notes with same serial number... even WhatsApp msg circulating similar... just in case if duplicate notes are printed intentionally, who will be held responsible? Can the blame be pinned?

achoudhury · Post by **achoudhury** » 14 Dec 2016 22:48

Some days back, I did mention in this forum that it seems that GoI has first hand information of Bank Official -Note Changer nexus as raids were so precise. Now it is evident that GoI machinery did pose as customers, snooped on telephone exchanges, etc. But it also points out the fact that GoI may be catching a fraction of infractions. Real fun will only begin when big-data analysis starts on deposits. Not sure if IT department has that sort of analytics team. What GoI needs to demonstrate quickly is take some of the acts to its logical conclusion by catching some big politicos before UP elections and then perhaps get to other offenders. Basically, prioritise cases of few political big wigs over anything else for the time being. People at large want to see real perpetrators being behind bars not these middlemen.

chetak · Post by **chetak** » 14 Dec 2016 23:08

durairaaj wrote:Is there any update on the earthquake that was supposed to hit Delhi today with its epicenter right under the seat of the enlightened prince. I could not find any news and am afraid that I may miss out some crucial information and be caught unaware.

rumor is that pappu has got his hands on some Modi adani(?) recorded conversation that happened a few days before demonetization.

he will of course, put his own spin on it and to protect his eyetalian butt, he needs to speak in parliament for immunity and to protect himself from any legal backlash.

spit and scoot as usual, typical pappu style.

sudeepj · Post by **sudeepj** » 14 Dec 2016 23:21

money: a current medium of exchange ...

At one time all money was gold.
Then, as the state established its monopoly on violence and its staying power, money became a paper 'certificate' or an embossed circular piece of metal.
With the advent on computers, the vast majority of money is just an excel sheet entry in bank mainframes, while the paper money is used by commoners/technology deprived.
As everyone becomes equipped with internet connected computers (some call them smart phones), almost all money will become electronic entries 'in the cloud'.

Its futile to expect that money would stay in its historic form as technology bounds ahead.
Yes, it will make govts. much more powerful in what they can track etc. But a similar increase in power when it comes to other things, such as electronic monitoring of roads, communications etc. has not resulted in any less freedom for citizens. In fact, it has resulted in more.

Therefore, I reject these 'too clever by half' theories that assert without any basis in fact that eventual replacement of paper money is simply a power grab by govts. But dinosaurs will dinosaur.. There are people who are still banging the table about bringing back gold money.

Suraj · Post by **Suraj** » 14 Dec 2016 23:23

shiv wrote:
ShauryaT wrote: The need of the hour screams devolution of power and accountability.
You are creating a strawman to bash the centre.

Yes indeed. ShauryaT, what do you think the situation of a crooked black marketer handing over a lakh to his maid, driver and gardener is ? It's devolution of his power into their hands, and making them accountable for that money

All of it voluntary onlee.

Everytime I see someone start with 'need of the hour', it's almost certain the rest of the paragraph is hot air... It's one of those phrases whose use is as cliched as starting a sentence 'I'm not racist but...'

SaraLax · Post by **SaraLax** » 14 Dec 2016 23:35

ShauryaT wrote:Not exceptional and a similar story in any other city in India. The need of the hour screams devolution of power and accountability. To expand on this, is to understand the evolution of government structures in our cities and rural districts, their sources of revenue, who is responsible to whom and under what authorities and ask the question, was it ever designed to serve the people? Anyways an OT topic but IMO, the most important to achieve a marked change in governance in India and peoples daily interactions with their living environment. There are enabling things here a central government can do, however so far what we have seen is its energies spent on further centralization. A simple case in point is GST. A third of the Mumbai budget came from the draconian Octroi system. This will now be replaced by discretions from the State Government and other things the city government will do to replace the revenue including fees, stamp duties, property tax, etc. The number of legislators NOT vested in Mumbai far outweigh the number from Mumbai, permanently putting the city at a disadvantage for fund allocations of the state. I am using Mumbai as an example, similar issues for Bengaluru too.

The funny thing is even the CPC / Deng Xiaoping recognized the importance of effective local governance and worked on this issue since the 80's.

Sir - You are one deliberate masterful deceiver !! kudos to you !!!.
How can GST be implemented but in any manner other than a centralized manner ?. Give us your expert gyan on how we can go about implementing taxes in any different localized manner (because that was what was already existing) ??

Below I have pasted some hastily collected data on the present government's federalist implementations ... but you know what .. you would pretty well know about these below indicated steps but will still feign ignorance.

Now - How can we even wake up somebody who fakes his own sleep ?.

Nevertheless ... muddle along

... the biggest-ever increase in the share of states from the central divisible pool of taxes—from 32% to 42%—for period 2015-16 to 2020-21, setting up the NITI Aayog that replaces the Planning Commission and letting some chief ministers accompany Prime Minister Narendra Modi on his foreign trips, are drawn from the party’s mission statement as articulated in its manifesto. “India is a country of immense diversity. A highly decentralized federal structure is thus crucial to meeting the varied ideas and aspirations of our diverse people. Power is currently concentrated in Delhi and the state capitals. We believe this power should be genuinely decentralized. BJP has stood for greater decentralization through devolving powers to the states,” said the BJP manifesto.

Besides, as part of the attempt to usher in transparency in the allocation of natural resources in the country, around Rs.3.35 trillion from the auction proceeds of 67 coal blocks would go to the state governments.

The major beneficiaries of such accruals will be the eastern coal-bearing states of West Bengal, Odisha and Jharkhand.

In an earlier interview, coal secretary Anil Swarup said, “In the entire exercise, the central government will get nothing. This is a very unusual exercise where the central government has worked hard, its officers have worked hard, to see that money flows to the states.”

“It is a very unusual thing. It normally doesn’t happen. There are e-auction proceeds, royalty proceeds and upfront payment,” Swarup added.

bharotshontan · Post by **bharotshontan** » 14 Dec 2016 23:46

Not certain if off-topic, just trying to understand the psychology of developing an ethos of zero civic sense at a macro level.

I wonder how much black economy as a cultural norm is a result of the common citizenry still retaining a sentiment of being under occupation. We know of British loot very well, which reduced Indian wealth massively between 1757 and 1947. But the "traditional" India isn't really that culturally affected from British rule, I think the black-reaction to plunder started earlier, it is from medieval history that this has become embedded into the norms.
https://en.wikipedia.org/wiki/Khilji_dy ... ji_dynasty

Alauddin Khilji changed the tax policies to strengthen his treasury to help pay the keep of his growing army and fund his wars of expansion.[29][30] He raised agriculture taxes from 20% to 50% – payable in grain and agricultural produce (or cash),[31] eliminating payments and commissions on taxes collected by local chiefs, banned socialization among his officials as well as inter-marriage between noble families to help prevent any opposition forming against him; he cut salaries of officials, poets and scholars in his kingdom.[29][30]

Alauddin Khilji enforced four taxes on non-Muslims in the Sultanate - jizya (poll tax), kharaj (land tax), kari (house tax) and chari (pasture tax).[32][33] He also decreed that his Delhi-based revenue officers assisted by local Muslim jagirdars, khuts, mukkadims, chaudharis and zamindars seize by force half of all produce any farmer generates, as a tax on standing crop, so as to fill sultanate granaries.[29][34][35] His officers enforced tax payment by beating up Hindu and Muslim middlemen responsible for rural tax collection.[29] Furthermore, Alauddin Khilji demanded, state Kulke and Rothermund, from his "wise men in the court" to create "rules and regulations in order to grind down the Hindus, so as to reduce them to abject poverty and deprive them of wealth and any form of surplus property that could foster a rebellion;[32] the Hindu was to be so reduced as to be left unable to keep a horse to ride on, to carry arms, to wear fine clothes, or to enjoy any of the luxuries of life".[29] At the same time, he confiscated all landed property from his courtiers and officers.[32] Revenue assignments to Muslim jagirdars were also cancelled and the revenue was collected by the central administration.[36] Henceforth, state Kulke and Rothermund, "everybody was busy with earning a living so that nobody could even think of rebellion."[32]

Alauddin Khilji taxation methods and increased taxes reduced agriculture output and the Sultanate witnessed massive inflation. In order to compensate for salaries that he had cut and fixed for Muslim officials and soldiers, Alauddin introduced price controls on all agriculture produce, goods, livestocks and slaves in kingdom, as well as controls on where, how and by whom these could be sold. Markets called shahana-i-mandi were created.[36][37][38] Muslim merchants were granted exclusive permits and monopoly in these mandi to buy and resell at official prices. No one other than these merchants could buy from farmers or sell in cities. Alauddin deployed an extensive network of Munhiyans (spies, secret police) who would monitor the mandi and had the power to seize anyone trying to buy or sell anything at a price different than the official controlled prices.[29][38][39] Those found violating these mandi rules were severely punished, such as by cutting out their flesh.[20] Taxes collected in form of seized crops and grains were stored in sultanate's granaries.[40] Over time, farmers quit farming for income and shifted to subsistence farming, the general food supply worsened in north India, shortages increased and Delhi Sultanate witnessed increasingly worse and extended periods of famines.[20][41] The Sultan banned private storage of food by anyone.[29] Rationing system was introduced by Alauddin as shortages multiplied; however, the nobility and his army were exempt from the per family quota-based food rationing system.[41] The shortages, price controls and rationing system caused starvation deaths of numerous rural people, mostly Hindus. However, during these famines, Khilji's sultanate granaries and wholesale mandi system with price controls ensured sufficient food for his army, court officials and the urban population in Delhi.[30][42] Price controls instituted by Khilji reduced prices, but also lowered wages to a point where ordinary people did not benefit from the low prices.[43] The price control system collapsed shortly after the death of Alauddin Khalji, with prices of various agriculture products and wages doubling to quadrupling within a few years.

Current support for Modi and demonetization, if it remains, will demonstrate that aam janata is truly coming around to "owning his/her state", a sentiment which had previously evaporated for centuries.

chetak · Post by **chetak** » 15 Dec 2016 00:10

this is a truly noteworthy suggestion

Manoj Poosappan ‏@mjpoos Dec 13

@narendramodi Sir,

All liquor shops in India should be made cashless purchase. This will make most people to open bank account. #cashless

37 replies 264 retweets 469 likes

ShauryaT · Post by **ShauryaT** » 15 Dec 2016 00:28

shiv wrote:
ShauryaT wrote: The need of the hour screams devolution of power and accountability. To expand on this, is to understand the evolution of government structures in our cities and rural districts, their sources of revenue, who is responsible to whom and under what authorities and ask the question, was it ever designed to serve the people? Anyways an OT topic but IMO, the most important to achieve a marked change in governance in India and peoples daily interactions with their living environment. There are enabling things here a central government can do, however so far what we have seen is its energies spent on further centralization. A simple case in point is GST.
You are creating a strawman to bash the centre.

I do not know which part of the argument to highlight to make my point on centralization vs devolution of power more clear. GST is only an example, the tip of the iceberg, you have 70 years+ of history here and a lot of bashing that ALL central governments deserve, with few exceptions. Anyways, if you think this is about bashing then no point. The point was about centralization of power, with GST only as the latest example.

Cities have 1 political representative for 50,000 people compared to 1 per 5000 in villages. Budgets are opaque and political parties vie for power in local government (city corporation) where there should be no political rivalry. The center has very little control over any of this, but GST is actually positive.

The majority agree with you that GST is positive and if you think so too, good. The opacity increases with the levels at which accountability is held and the lowest levels of governance are not properly empowered. Shiv ji: I do not know, how much are you aware of this topic and the reams of books and articles on them but this is an entirely separate topic by itself on roles and models of governance. The US, EU & China are three large entities that do offer a glimpse into their contrasting models to compare to compare and contrast. The local governance issues you described have much to do with the model, we have adopted.

Another positive would be conducting local, state and central elections at the same time.

Do not have a view on this topic at this time.

And yes demonetization has, for the moment taken the steam out of the most corrupt and arrogant local and state government officials. The flow of money has been temporarily arrested.

[/quote]The question is not about what it has done now - that part is clear. A day wage earner can be happy that the corrupt ward officer is also suffering, however the day wage earner is also - everyone is. But these are mostly transitory issues and hats off to the Indian people to be patient about this. The critical question to ponder is what happens tomorrow, Jan 1, 2017, 2018... and where in the reform trajectory will demonetization lead to. I am referring to only the economic and reform aspects of the issue not the politics of it.

RajeshG · Post by **RajeshG** » 15 Dec 2016 00:47

http://economictimes.indiatimes.com/new ... 949867.cms

MUMBAI: The premium for illegal exchange of old currency notes has collapsed and money changers are proposing to pay interest on old notes provided the owner agrees to lock in the money for a year or more.

The dramatic turnaround within a few weeks after the currency swap could mean that people with illgotten wealth have either found other ingenious ways of converting their money or have decided to make use of the government’s second amnesty scheme. ET spoke to businessmen, builders ..

Suraj · Post by **Suraj** » 15 Dec 2016 00:55

The press keeps calling the amendment to the IT Act an 'amnesty scheme' . This is not an income disclosure incentive scheme. Declaration is absolutely required in order to preserve capital, since all old notes are worthless. It's simply a system of penalties - voluntarily admitting wrongdoing gets you 50% penalty plus half the remaining capital locked in PMGKY for 4 years. If caught without voluntary admission, it goes up to 90% penalty. Further, you have to prove that the money was legitimately acquired, i.e. any illegal activity means 100% loss plus jail for criminal wrongdoing.

hanumadu · Post by **hanumadu** » 15 Dec 2016 01:08

25% lock in without interest is another 5% off the original amount at 5% interest rate. The effective tax rate is 55%.

Primus · Post by **Primus** » 15 Dec 2016 02:16

hanumadu wrote:25% lock in without interest is another 5% off the original amount at 5% interest rate. The effective tax rate is 55%.

That's actually not too bad, close to what I am paying in massaland. If only people would realize that it is much better to pay and sleep well at night as opposed to losing it all or going to jail.

Suraj · Post by **Suraj** » 15 Dec 2016 02:31

That's 25% locked in for 4 years without interest, after losing 50% as tax+penalty. Working capital is reduced to 25% of the original black money corpus.

ManishC · Post by **ManishC** » 15 Dec 2016 02:55

Donations to Political parties and NGOs seem to be providing a convenient money laundering avenue. Zee had an exposé couple of days ago but does not seemed to have perked anyone's ears.

How are the bagmen of Congoons, JD etc. exchanging huge sums of cash with no questions asked?

disha · Post by **disha** » 15 Dec 2016 04:01

ManishC wrote:How are the bagmen of Congoons, JD etc. exchanging huge sums of cash with no questions asked?

Would you ask questions to a bandicoot if it is walking right away into your well laid trap?

One: It does not seem to be the case outside of Delhi since in AP some CONgoon was also caught trying to embezzle his (or some looted) BM along with a cop. If it was open season., he would have gone straight to his political HQ.

Two: After the political party launders the money., simple accounting will paint a huge target on its back by ECI., all political parties have to provide to the ECI expenditure reports and I believe it has to be certified by CA. A sudden surfeit of 'expense receipts' from October and November 2016 will leave a paper trail. And each of that paper is a minefield that can be exploded at opportune time.

Three: If political party are indeed exchanging huge sums including their stash - then why are they reacting as if their bank is looted? They should be happy - since they can skim off other's BM too!

For example you are a sarkaari babu from octroi with say 10 Cr. Rs. in demonetized notes. You approach the CONgoons and ask them to launder 10 Cr. Rs. First this will expose you to them for future ransom. But for now., they say yes they will return say 8 Cr. Rs in new notes to you. And they hire you as a 'political consultant' or 'ad man' or 'transport provider' or 'goods and service facilitator' and give you a receipt (back-dated) of the goods and services you provided. You think you are happy now., you go and deposit it in bank - it is white already so no declaration other than state that you opened a business. But - the first question is that when did you start the business and how come you made a sudden sale of say 8 Cr. Rs. And if you are the only 'transport provider' then as a sarkaari babu you are toast. Well you may have a benaami business but that falls into the benaami act. And IT has even bigger draconian danda there already!

Now CONgoons go and deposit 10 Cr. in the bank. And they can claim 'donations'. And they withdraw 8 Cr from the bank and gave it to you the sarkaari babu skimming out from octroi. On record., CONgoons have deposited 10 Cr and withdrew 8 Cr for 'bonafide' expenses at a time when there is no major election going on anywhere. You cannot say that the 8 Cr. was paid to 'transport provider' for a earth shattering speech of #Pappu - since #Pappu was caught napping in LS. One lie will lead to another till it ties you up. Further., an investigation from ECI means that CONgoons will run around to clean up the paper trail. Imagine if you are the #Pappu and you visit the CONgoon HQ and say let us start a campaign and the answer comes that nobody is free since everybody is involved in 'Swach Paper campaign for CONgoon' - what is your reaction?

In effect, at the opportune time - your poll machinery is gummed up. While that is happening, NaMo goes one rally after another and you are shivering in your dhotis hoping that the ECI does not create further troubles.

PS: 'you' is third party 'you'.

ManuJ · Post by **ManuJ** » 15 Dec 2016 05:05

Have heard from the horse's mouth that a lot of old denomination money is being laundered through the farming loophole.
This is the kharif crop harvesting season.
Apparently farmers are still accepting payments in the old denominations since all their income is untaxed and transactions are cash based.

KLNMurthy · Post by **KLNMurthy** » 15 Dec 2016 06:16

A personal query:

Am planning to travel from US to Hyderabad later this month. I'll have to exchange USD for rupees before I can pay for a cab, buy some breakfast etc.

Does anyone have any information on the state of the currency exchange at Hyderabad airport? Can i count on reliably being able to exchange even a small amount, e.g, USD 100 for rupees?

thanks for any info.

SSharma · Post by **SSharma** » 15 Dec 2016 06:25

murthy saar, do not count on being able to exchange dollars or any currency at a fair rate.
you would be lucky to be able to exchange them at all, i was at rgia last week, at least the atms were out of cash.

your best bet would be to get a friend to set up an ola account for you and put some cash in it.
you can take the user/pass from him and use the app on your smartphone to get you from point A to B - can book the ride even before you get out of the airport.

whatever INR you are able to procure, save it for emergencies, go as cashless as you can - in a city like hyd you have no excuse for not going cashless.