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Currency Demonetisation and Future course of Indian Economy

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nam
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Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 12 Oct 2017 01:21

My personal view is that it is very difficult to say what is happening in unorganized sector.. because.. well they are unorganized. No has the true numbers of how are employed and how many loss jobs in a normal annual cycle.

I read about losses in construction due to demo. How about jobs losses during the monsoon season which hugely effects construction .. of well anything?
This happens every year.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Katare » 12 Oct 2017 01:45

Well, the problems with Indian economy are well understood -

Land, Labor and infrastructure.

Both UPA2 and NDA2 have chosen to focus on the third problem- Infrastructure in full gusto! Benefits of infrastructure would achieve full flow only if the other two, the land and he labor, are also reformed.

UPA booby trapped Land pretty good before leaving and Modi lost his nerve by pulling back his legislature on land reforms. This helped him win many state elections but this could come back to bite him in general election. Labor reforms were attempted but with only minor tweaks not with bold reforms that are needed. Privatization is mostly off the table and only disinvestment is being attempted.

It is easy for me to write all this and even whine about it but these are age old mega problems left over from Nehru/Indira era that every govt since than have faced but but all have been very careful in only using small scalpel to carve an elephant. It's been almost 40 years and we have not reached to the main body yet.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Rishirishi » 12 Oct 2017 03:17

Katare wrote:Well, the problems with Indian economy are well understood -

Land, Labor and infrastructure.

Both UPA2 and NDA2 have chosen to focus on the third problem- Infrastructure in full gusto! Benefits of infrastructure would achieve full flow only if the other two, the land and he labor, are also reformed.

UPA booby trapped Land pretty good before leaving and Modi lost his nerve by pulling back his legislature on land reforms. This helped him win many state elections but this could come back to bite him in general election. Labor reforms were attempted but with only minor tweaks not with bold reforms that are needed. Privatization is mostly off the table and only disinvestment is being attempted.

It is easy for me to write all this and even whine about it but these are age old mega problems left over from Nehru/Indira era that every govt since than have faced but but all have been very careful in only using small scalpel to carve an elephant. It's been almost 40 years and we have not reached to the main body yet.


I dont think privatisation or labour law is such a great deal. Most sectors now have to compete with private sector. Rail, coal and power distribution remains with GOI. I doubt if privatisation of Rail is such a great ide. No one has managed to building solid Railways by privatisation.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Kashi » 12 Oct 2017 05:39

Rishirishi wrote:No one has managed to building solid Railways by privatisation.


All Railway in Japan is privatised including the Shinkansen, though the system was conceived and set up during JNR, the publicly owned company. Nearly all local railways too are private, who own everything from rolling stock to tracks to stations.

On the other hand, railways in Britain are also under private ownership.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby yensoy » 12 Oct 2017 10:06

Rishirishi wrote:No one has managed to building solid Railways by privatisation.


I understand what you are trying to say. But on a side note, do you know which is the biggest example of a "solid Railway" built by privatization?

Our very own Indian Railways. These were built as crown monopolies - costs of their construction would be borne from funds raised internally, contributions from kingdoms and backstopped by the imperial government. Risks were borne by the imperial government too. Profits, of course, were sucked off to London. In that sense, they were private; and reflected the worst of the combination of colonialism and crony capitalism.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 12 Oct 2017 16:53

Katare wrote:Well, the problems with Indian economy are well understood -

Land, Labor and infrastructure.



I would say the problem is we don't produce anything worthwhile.

The same land, labor, infrastructure did not stop growth of IT. Bangalore has horrible infrastructure.

Companies are set up in Mumbai, rather than in some remote place,because of the existing ecosystem.It is probably the most expensive real estate in India. You can have multi floor manufacturing units if land is an issue.

Tatas have large manufacturing units, employing 100s of thousands.

Just like growth of IT triggered easier labour laws & education, infrastructure( office & transport) and demand for offices in most expensive places.

We need to produce something worthwhile. Something the world wants.. like Indian BPO & IT. Chinis do this very well.
Last edited by nam on 12 Oct 2017 17:54, edited 1 time in total.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 12 Oct 2017 17:38

yensoy wrote:
Rishirishi wrote:No one has managed to building solid Railways by privatisation.


I understand what you are trying to say. But on a side note, do you know which is the biggest example of a "solid Railway" built by privatization?

Our very own Indian Railways. These were built as crown monopolies - costs of their construction would be borne from funds raised internally, contributions from kingdoms and backstopped by the imperial government. Risks were borne by the imperial government too. Profits, of course, were sucked off to London. In that sense, they were private; and reflected the worst of the combination of colonialism and crony capitalism.


Sidenote continued:
http://arunsmusings.blogspot.com/2015/0 ... india.html

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Katare » 14 Oct 2017 09:31

nam wrote:
Katare wrote:Well, the problems with Indian economy are well understood -

Land, Labor and infrastructure.



I would say the problem is we don't produce anything worthwhile.

The same land, labor, infrastructure did not stop growth of IT. Bangalore has horrible infrastructure.

Companies are set up in Mumbai, rather than in some remote place,because of the existing ecosystem.It is probably the most expensive real estate in India. You can have multi floor manufacturing units if land is an issue.

Tatas have large manufacturing units, employing 100s of thousands.

Just like growth of IT triggered easier labour laws & education, infrastructure( office & transport) and demand for offices in most expensive places.

We need to produce something worthwhile. Something the world wants.. like Indian BPO & IT. Chinis do this very well.


Actually IT industry growth is the prime example of Land, Labor and infra bottleneck. The IT industry needs none of the three and that is why it thrived. If it needed roads, rails, ports, electricity, or if it was under unionized labor while competing against chinese cheap imports or if it neede thousands of acres of farm land it would not have fared any better. Mostly it needed a large horde of young engineers and office buildings with networked computers.

For similar reasons we are world leaders in gems/diamond/jewelry industry. Like IT It also does not need or use either of the three stressed bottle neck of indian economy.

We'll make worth while things when we'll have tools and ecosystem to build world class stuff until than its going to be IT, jewels and likes.

Modi could have tackled these problems in his first year and he did grab the bull by horns but quickly retreated under political considerations. If he comes back to power, ( i have a hunch he'll figure a way out) we can expect some actions again in 2019-20. Until than it is ram bharose bus, chali to bhagi nahi to lagao dhakka.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Katare » 14 Oct 2017 09:42

Rishirishi wrote:
Katare wrote:Well, the problems with Indian economy are well understood -

Land, Labor and infrastructure.

Both UPA2 and NDA2 have chosen to focus on the third problem- Infrastructure in full gusto! Benefits of infrastructure would achieve full flow only if the other two, the land and he labor, are also reformed.

UPA booby trapped Land pretty good before leaving and Modi lost his nerve by pulling back his legislature on land reforms. This helped him win many state elections but this could come back to bite him in general election. Labor reforms were attempted but with only minor tweaks not with bold reforms that are needed. Privatization is mostly off the table and only disinvestment is being attempted.

It is easy for me to write all this and even whine about it but these are age old mega problems left over from Nehru/Indira era that every govt since than have faced but but all have been very careful in only using small scalpel to carve an elephant. It's been almost 40 years and we have not reached to the main body yet.


I dont think privatisation or labour law is such a great deal. Most sectors now have to compete with private sector. Rail, coal and power distribution remains with GOI. I doubt if privatisation of Rail is such a great ide. No one has managed to building solid Railways by privatisation.


Totally disagree, in my opinion, take it for whatever it's worth, you couldn't be wronger. Labor is the bigget millstone, legacy of Nehru/Indira era, hanging on Indian economy's neck. Until it's cut down we'll not realize our potential in manufacturing. There is no room tor if's and but's on this one. Privatization is not one of the three fundamental problems of economy but still anyone who in 2017 thinks govt is more efficient in running bussinesses than private sectors is still living, atleast partially, in 1960s.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 14 Oct 2017 21:37

The problem with government run enterprises is that for political reasons they are never allowed to fail. The private sector achieves its "efficiency" through a ruthless survival of the fittest. Most businesses eventually fail. Of course, in a crony capitalist system, politically favored private businesses don't fail and this is no more efficient and less accountable than a proper public sector.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Katare » 15 Oct 2017 03:09

You are right. Airindia is running losses over 30k corers. PSU banks need more than Rs2 lakh corer of capital that govt does not have. Organized Labor won't allow disinvestment below 50% and govt can not cough up that kind of moolah which means not enough money to lend so whole economy is screwed.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby jpremnath » 15 Oct 2017 13:17

People pining for privatization of all PSUs ignore the sad state of corporate india..of course private companies revolutionized Telecom and sat television sectors. And they provide employment in numbers that govt and PSUs can never match. But we dont realise that vast majority of private companies are inefficient and poorly run. The quality of their products and services are shoddy to say the least. Innovation or R&D is zilch. We think they are in a survival of the fittest fight..but no..you can see the glaring inefficiencies and lethargy in their marketing, supply chain management, product quality and customer service...

How many world class companies or products can we list?Biocon and himalaya maybe.. and probably some more....But the remaining are really terrible...TCS, Infy and the lot are glorified labour contractors. Airtel is a poor version of vodafone. The whole TATA group is a sarkari org in private overall..Adanis probably run their ports better but they are the poster child of crony capitalism and run the whole show on debt... If you think we can give railways and other strategic sectors to private firms and see them blossom we are living in a fools paradise..just look at the british, their attempts to do this on railways is a failure. Trains dont run on time, costs go up, so does losses...Govt should withdraw from doing business, but it should be from sectors which are not strategic..like air india,

The steps to reform corporate india like the new sebi guidelines in works will hopefully improve the way their boards are run. We need a vibrant private sector but corporate india is not mature enough yet to take control of the country's lifelines like railways, petroleum and defence..

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Re: Currency Demonetisation and Future course of Indian Economy

Postby chetak » 15 Oct 2017 14:06

yensoy wrote:
Rishirishi wrote:No one has managed to building solid Railways by privatisation.


I understand what you are trying to say. But on a side note, do you know which is the biggest example of a "solid Railway" built by privatization?

Our very own Indian Railways. These were built as crown monopolies - costs of their construction would be borne from funds raised internally, contributions from kingdoms and backstopped by the imperial government. Risks were borne by the imperial government too. Profits, of course, were sucked off to London. In that sense, they were private; and reflected the worst of the combination of colonialism and crony capitalism.


sashi tharoor on the subject of Indian railways...........

The railways were first conceived of by the East India Company, like everything else in that firm’s calculations, for its own benefit. Governor-General Lord Hardinge argued in 1843 that the railways would be beneficial “to the commerce, government and military control of the country”. Ten years later, his successor Lord Dalhousie underscored “the important role that India could play as a market for British manufacturers and as a supplier of agricultural raw materials”. The vast interior of India could be opened up as a market only by the railways; lab­ourers could be transported where they were needed and its fields and mines could be tapped to send material to feed the ‘satanic mills’ of England.

In its very conception and construction, the Indian Rai­lways was a big colonial scam. British shareholders made absurd amounts of money by investing in the railways, where the government guaranteed returns on cap­ital of 5 per cent net per year, unavailable in any other safe investment. That was an extravagantly high rate of return those days, possible only because the government made up the shortfall from its revenues, payments that of course came from Indian, and not British, taxes.

These excessive guarantees removed any incentive for the private companies constructing the railways to economise—the higher their capital expenditure, the higher would be their guaranteed return at a high and secure rate of interest. As a result, each mile of Indian railway construction in the 1850s and 1860s cost an average of £18,000, as against the dollar equivalent of £2,000 at the same time in the US. In the event, it was 20 years or more before the first lines ear­ned more than 5 per cent of their capital out­lay, but even after the government had taken over railway construction in the 1880s, thanks to the rapacity of private British firms contracted for the task, a mile of Indian railway cost more than double the same distance in the equally difficult and less populated terrains of Canada and Australia.

It was a splendid racket for everyone, apart from the Indian taxpayer. In terms of a secure return, Indian rai­lway shares offered twice as much as the British government’s own stock. Guaranteed Indian railway shares abs­orbed up to a fifth of British portfolio investment in the 20 years to 1870—the first line opened in 1853—but only 1 per cent of it originated in India. Britons made the money, controlled the technology and supplied all the equipment, which meant once again that profits were repatriated. It was a scheme described at the time as “private enterprise at public risk”. All the losses were borne by the Indian people, all the gains pocketed by the British trader—even as he penetrated by rail deep into the Indian economy. The steel industry in England found a much-needed outlet for its overpriced products for railways in India: steel rails, engines, rail wagons, machinery and plants. Far from supporting the proposition that the British did good to India, the railways are actually evidence for the idea that Britain took much more out of its most magnificent colony than it put in.

Nor was there any significant residual benefit to Indians. The railways were intended principally to transport extracted resources—coal, iron ore, cotton and so on—to ports for the British to ship home to use in their factories. The movement of people was incidental, except when it served colonial interests; and the third-class compartments, with their woo­den benches and absence of amenities, into which Indians were herded, attracted horrified comment even at the time. And also questions in the toothless legislatures: there were 14 questions on this issue in the legislative assembly every year between 1921 and 1941, and 18 more annually in the Council of State. The yearly averages for 1937-1941 were 16 and 25 respectively. Mah­atma Gandhi’s first crusade on his return to India was on behalf of the third-class traveller. Yet, third-class passengers became a source of profit for the railways, since British merchants in India ensured that freight tariffs were kept low (the lowest in the world) while third-class passengers’ fares made up the railway companies’ principal source of profit. No effort was made, in laying railway lines, to ensure that supply matched the demand for popular transport.

Nor were Indians employed in the railways. Disc­rimi­natory hiring practices meant that key industrial skills were not effectively transferred to Indian personnel. The prevailing view was that the railways would have to be staffed almost exclusively by Europeans to “protect inv­estments”. This was especially true of signalmen, and those who operated and repaired the steam trains, but the policy was extended to such an absurd level that even in the early 20th century all the key employees, from dir­ectors of the Railway Board to ticket-collectors, were white men—whose salaries and benefits were also paid at European, not Indian, levels and largely repatriated back to England. Moreover, when the policy was relaxed and expensive European labour reduced, there was a continuing search for the most ‘British-like’ workers. Thus came the long-lasting identification of the Anglo-Indian community with railway employment, since at first it was these Eurasians who were trained to do the jobs that only Europeans had been ass­umed to be capable of doing previously. In keeping with British notions of eugenics, and since the Anglo-Indians were not a very large community, ‘martial’ Sikhs and pale-skinned Parsis were then employed as well, although they were only put in charge of driving engines within station yards and emp­loyed in stations with infrequent traffic.

Double standards prevailed in other ways: whereas in Britain it was common practice to ensure the merit-based promotion of firemen to drivers, or of station-masters of small rural stations to large stations, this did not happen in India because these junior positions were occupied by Indians, whose promotion would have be to posts otherwise occupied by Europeans. By 1900, in the regulations for pay, promotion and suitability for jobs, or what we would today describe as the human resource management rules, employees were subdivided into “European, Eurasian, West Indian of Negro descent pure or mixed, Non-Indian Asiatic, or Indian”. On employment, the local medical officer would certify the race and caste identity of a candidate and write it on his history sheet—thus determining his future pay, leave, allowances, and possible promotions, as well as place in the railway hierarchy for the rest of his career.

Racism combined with British economic interests to undermine efficiency. The railway workshops in Jamalpur in Bengal and Ajmer in Rajputana were established in 1862 to maintain the trains, but their Indian mechanics became so adept that in 1878 they started designing and building their own locomotives. Their success increasingly alarmed the British, since the Indian locomotives were just as good, and a great deal cheaper, than the British-made ones. In 1912, therefore, the British passed an Act of Parliament, explicitly making it impossible for Indian workshops to design and manufacture locomotives. The Act prohibited Indian factories from doing the work they had successfully done for three decades; instead, they were only allowed to maintain loc­omotives imported from Britain and the industrialised world. Between 1854 and 1947, India imported aro­und 14,400 locomotives from England (some 10 per cent of all British locomotives produced), and another 3,000 from Canada, the US and Germany, but made none in India after 1912. After Independence, the old technical knowledge was so completely lost to India that the railways had to go cap-in-hand to the British to guide them on setting up a locomotive factory in India again.

This is far from being a retrospective critique from the comfortable perspective of a 21st century commentator. On the contrary, 19th-century Indians were quite conscious at the time of the abominable role of the railways in the crass exploitation of their country. The Bengali newspaper Samachar wrote on 30 April 1884 that “iron roads mean iron chains” for India—foreign goods could flow more easily, it argued, killing native Indian industry and increasing Indian poverty. Nationalist voices like those of G.V. Joshi, G.S. Iyer, Gopal Krishna Gokhale and Dadabhai Naoroji were raised publicly in the 1890s, pointing out how limited the benefits of the railways were to India, how the profits all went to foreigners abroad, and how great was the burden on the Indian exc­hequer. And there are other examples to show how the interests of Indians were never a factor in railway operations: during World War I, several Indian rail lines were dismantled and shipped out of the country to aid the Allied war effort in Mesopotamia!

On the whole, therefore, the verdict of the eminent historian Bipan Chandra stands. British motives in building railways in India, he wrote, were “sordid and selfish—the promotion of the interests of British merchants, manufacturers and investors—at the risk and expense of Indian revenues”; their “essential purpose” being to “assist British enterprise in the exp­loitation of the natural resources of India”.

Quod erat demonstrandum.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Mollick.R » 15 Oct 2017 17:03

Key points from the article............

1. The Index of industrial production (IIP) rose 4.3 per cent in August, reversing a contraction in June and faster than a 0.9 per cent rise in July.

2. There was more cheers for Modi. India's annual consumer inflation in September marginally eased to 3.28 per cent from a year ago.

3. India's trade deficit narrowed to $8.98 billion in September, its lowest in seven months.

4. Merchandise exports rose sharply in September, belying fears of a slump due to disruption and working capital issues brought on by the introduction of the goods and services tax.

5. Exports climbed 25.67 per cent in September, exceeding an 18.1 per cent increase in imports, helping to narrow the trade deficit to $8.98 billion from $9.07 billion in September 2016.


https://economictimes.indiatimes.com/news/economy/policy/its-a-happy-diwali-for-pm-narendra-modi-new-data-offers-short-reprieve/articleshow/61078792.cms

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Mollick.R » 15 Oct 2017 17:05

Even though words of Gora Mem of IMF , doesn't matters much still posting

Describing the two major recent reforms in India - demonetisation and Goods and Services Tax (GST) - as a monumental effort, Lagarde said it is hardly surprising that there "is a little bit of a short-term slowdown" as a result.

"Turning to India...we have slightly downgraded India; but we believe that India is for the medium and long-term on a growth track that is much more solid as a result of the structural reforms that have been conducted in India in the last couple of years," IMF Managing Director Lagarde said.



https://economictimes.indiatimes.com/news/economy/indicators/indian-economy-on-very-solid-track-imf-chief-christine-lagarde/articleshow/61087784.cms

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 24 Oct 2017 16:39

Most of the story is behind a registration wall.
https://www.bloomberg.com/news/articles ... y-minister

India Unearths $1 Billion of Suspicious Cash in Corruption Crackdown
By Shruti Srivastava
October 24, 2017, 1:09 AM EDT October 24, 2017, 5:49 AM EDT

Investigations may see up to 450,000 directors disqualified
More than 200,000 companies have been deregistered in probe

India is intensifying its crackdown on dubious companies after it unearthed over $1 billion in suspicious cash deposits as part of its investigations into corruption and efforts to boost foreign investment, a minister said.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby A_Gupta » 24 Oct 2017 16:43

https://economictimes.indiatimes.com/ma ... 198230.cms
While the government has already deregistered over 200,000 companies and restricted their bank accounts, it is now working on limiting property transfers to trace any further generation of black money, said P.P. Chaudhary, junior minister for corporate affairs, in an interview on Oct. 18 in New Delhi.

The ministry is probing deposits of over $1 billion made by around 20,000 companies during the cash ban last year, while its Serious Fraud Investigation Office is investigating 1,505 companies for allegedly violating the Companies Act. It is examining another 809 listed companies, found untraceable by SEBI, to check their status, existence of their offices and directors, the minister said.

"Our purpose is to increase compliance so that investors' confidence increases in Indian companies," Chaudhary said. "This will also attract foreign investors who would be sure that the companies they are investing in are genuine. We will have to curb shell companies if we want to increase confidence of investors in India."

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 27 Oct 2017 01:50

This article is a great example of hand-waving masquerading as serious analysis: One year of demonetisation: Economy shaken, GDP hurt, trust in government undermined
In summary, demonetization 'destroys peoples trust in government', 'destroys the value of cash', 'damages the banking sector'. In reality it does the opposite in all three cases.

Trust is a two way street, and it's been heavily misused by the government *and* the people. Until demonetization. The fact that the entire exercise could even be carried out to conclusion on schedule is a testament to the trust the process engendered. You cannot get ~700 million adult people to do your bidding just by telling them to. They have to feel it's worth the effort. If they didn't feel so, they can simply assert an action of civil disobedience, forcing the government to continue to keep the older notes legal tender. But that didn't happen. Considering the absolute numbers - by a long distance the greatest note return/exchange in the history of mankind, involving the equivalent of ~$220 billion in currency, the action was done smoothly.

Destruction of value of currency is just woefully off the mark. When there's less currency in circulation and the activity is actually officially trackable, it *enhances* the value of currency, not destroys it. Inflation is what destroys value of cash. Demonetization is deflationary, not inflationary.

The banking sector has been enhanced by demonetization. It now has an extra $220 billion in additional deposits that were out as cash backing the informal economy, but no longer is. Together with a host of additional laws, government has a better picture of who hold how much illicit wealth. Of course they can keep hiding it, but the moment they try to move it, it shows up on the radar.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Rishirishi » 27 Oct 2017 05:09

Are we going to experiance capitalflight now ?
https://timesofindia.indiatimes.com/business/india-business/indians-now-no-2-in-london-realty-deals/articleshow/61192425.cms

between August 2016 and July 2017, Indian participation amounted to 22 per cent of all real estate transactions in prime central London (made up of the royal borough of Kensington & Chelsea, along with the borough of Westminster). "It has been noted recently that there has been an upturn in Indian buyers, making up about a fifth of all buyers at nearly 4 billion pounds out of a total 18 billion pounds," said Durrani in a recent interaction with journalists.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Katare » 31 Oct 2017 03:25

From ICICI bank's second quarter results - Solid growth in digitization of trade and economy

Debit and credit card transactions continued to grow at a healthy rate. The
number and the value of debit card transactions at point-of-sale terminals
increased year-on-year by 64% and 63% respectively in Q2-2018. Credit
card transactions increased year-on-year by 40% and 45% in terms of
number and value respectively in Q2-2018.
Over 5.0 million Unified Payment Interface (UPI) Virtual Payment Addresses
have been created using the Bank’s mobile platforms till September 30,
2017. Further, the Bank had acquired over 145,000 merchants till
September 30, 2017 on ‘Eazypay’, its mobile payments application for
merchants.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Aditya_V » 31 Oct 2017 16:14

Rishirishi wrote:Are we going to experiance capitalflight now ?
https://timesofindia.indiatimes.com/business/india-business/indians-now-no-2-in-london-realty-deals/articleshow/61192425.cms

between August 2016 and July 2017, Indian participation amounted to 22 per cent of all real estate transactions in prime central London (made up of the royal borough of Kensington & Chelsea, along with the borough of Westminster). "It has been noted recently that there has been an upturn in Indian buyers, making up about a fifth of all buyers at nearly 4 billion pounds out of a total 18 billion pounds," said Durrani in a recent interaction with journalists.


Nope this is Capital which flew out earlier and is being invested in Dubai, London etc. This is not happening out the RBI USD 250K limit on Tax paid money.


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Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 07 Nov 2017 01:15

Demonistation would become Indian version of "Elvis is alive".The chattering classes will talk about it for years, telling everybody it failed.. It has been a year, people have moved on. Government have got what it wanted. It was a win-win situation for GoI.

A perfect example is the recent announcement of 14k+ crores deposited by shell companies. GoI got the data it wanted. All punters left a wonderful trail.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Manish_P » 07 Nov 2017 20:21

Doing the rounds on Whatsapp

Conversation between Aadhaar, Apple and Samsung

Aadhaar - I have Biometric information of people who possess me

Apple - I too have the same

Samsung - I have it too. what's new in that?

Aadhaar - Oh. But then why do People criticize me. I only take it once from the people

Apple - I take finger print and eye scan daily and People love giving it and pay Rs 40-50k to buy me

Aadhaar - OMG Why ? But they say Some one can steal these biometric from me. Don't they say that about you ?

Apple - I actually save every information on IPhone backup Server But they love me because I am costly. Indians love Costly status symbols

Aadhaar - They say I am not secure despite of the fact I am encrypted

Apple - Oh come on, Don't you remember when FBI took data from us? It's not about encryption, I give all data to US Intelligence services

Samsung - Me too. My cousins like Vivo , Xiaomi, Oppo, Xolo all do the same and Chinese take it happily

Aadhaar - But they say foreigners helped create me

Apple & Samsung - Hehehe Do we look Indian to you?

Aadhaar - But then why am I the Only one cursed at?

Apple and Samsung together - It is because you are Indian and possessed by Indian People who feel inferior and abuse their own Government as an excuse. You become that Excuse. We are proud brands of our Countries for which Indian people pay 40K- 50K and happily give all details like address, GPS location, Contacts, Biometrics, basically every damn thing and then proudly post on Facebook - Hey, This my New iPhone/Galaxy

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Dipanker » 08 Nov 2017 07:38

Cash still king as digital payments inch up slowly

CHENNAI: If demonetisation was a push for a cashless economy, it has been working very slowly. Reserve Bank of India data shows the usage of wallets, non-UPI banking apps and Aadhaar-enabled payments has been slow to catch on, while that of debit cards has fallen. The UPI payments have been growing, and a significant chunk of them are mobile-based.
Overall, electronic payments stood at Rs 200 trillion in August — an increase of 5 per cent over August 2016 but 0.7 per cent lower than at the peak of demonetisation in December last year (Rs 201 trillion).

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Re: Currency Demonetisation and Future course of Indian Economy

Postby SaraLax » 08 Nov 2017 10:00

Dipanker wrote:Cash still king as digital payments inch up slowly

CHENNAI: If demonetisation was a push for a cashless economy, it has been working very slowly. Reserve Bank of India data shows the usage of wallets, non-UPI banking apps and Aadhaar-enabled payments has been slow to catch on, while that of debit cards has fallen. The UPI payments have been growing, and a significant chunk of them are mobile-based.
Overall, electronic payments stood at Rs 200 trillion in August — an increase of 5 per cent over August 2016 but 0.7 per cent lower than at the peak of demonetisation in December last year (Rs 201 trillion).


Where there is a will - there is a way. Communists and anti-nationalists won't agree with this statement when it comes to DeMon.

Demonetisation ground report: A year on, Tiruppur is still counting gains from note ban
India’s knitting hub, Tiruppur, has come a long way since demonetisation – mostly for the better. Companies are happy to transfer wages to bank accounts instead of having to handle currency worth tens of lakhs of rupees. And many workers have started getting provident fund payments since wages are being transferred to banks.

Garment makers vividly recall the initial chaos after the sudden scarcity of cash following scrapping of Rs 500 and Rs 1,000 notes as legal tender, but looking back many of them view the change positively. “Earlier we had this cumbersome procedure of mobilising about Rs 40 lakh in cash every week to pay wages,” said D Arun, partner at Ahill Apparel, which employs 1,800 workers and clocks exports of about Rs 100 crore a year. “Though we had a tough time making workers open bank accounts, as many did not have proper documents, the cash payment has virtually stopped and everything is through bank now. Tiruppur accounts for exports of Rs 26,000 crore a year and has 1,100 garment making units, of which about 200 are large entities with thousands of workers. The majority are micro, small and medium enterprises (MSME) employing 400 workers on average.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 09 Nov 2017 01:41

Fake firm run to transact Rs 4,000 cr unearthed due to demonetisation
The government has unearthed cash transaction of upto Rs 4,000 crore by a fake company which had more than 2,000 bank accounts, Defence Minister Nirmala Sitharaman said here today.

"We have spoken in public about an operation of fake shell companies. One such fake company had about 2,000 bank accounts," she said.

The company did not disclose any detail of how it generated income. But it came to light that the company had 2,000 bank accounts, she said.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby hanumadu » 09 Nov 2017 01:57

The shell company would have acted on behalf its 'clients' to deposit/launder money. The govt can shut down the company and go after the directors. But the money would now be with the clients. How to track all their clients and recover that money? I doubt the company maintained records or if the clients even gave their true names.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 09 Nov 2017 02:24

The squeeze begins:
Income tax dept to issue 100,000 notices for huge deposits after note ban
The Income Tax Department is set to issue notices to about 100,000 entities and individuals, who deposited huge cash in banks post demonetisation and whose tax returns have been picked for a detailed probe into suspected discrepancies, official sources said on Tuesday.

Issue of notices will begin this week, they said.

In the first tranche, notices will be issued to 70,000 entities who deposited over Rs 50 lakh in cash in banks but chose not to file tax returns or respond to the relevant Income Tax Department advisories, the sources said.

These notices will be issued under Section 142 (1) of the I-T Act (inquiry before assessment), they said.

Similarly, about 30,000 scrutiny notices will be issued to those whose deposits and tax returns were found to be starkly "deviant" from their past behaviour or their accounts showed huge monetary transactions post demonetisation, they added.

As many as 20,572 tax returns have been selected for the scrutiny procedure by the department post demonetisation, declared by the government on November 8 last year.

The rest of the scrutiny notices will be issued in due course, they added.

This action will be followed by the taxman issuing similar notices by next month to those individuals and entities who have made deposits between Rs 25 lakh and Rs 50 lakh post demonetisation.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Vineetmehta_del » 09 Nov 2017 16:15

hanumadu wrote:The shell company would have acted on behalf its 'clients' to deposit/launder money. The govt can shut down the company and go after the directors. But the money would now be with the clients. How to track all their clients and recover that money? I doubt the company maintained records or if the clients even gave their true names.


I feel that the money from shell company accounts to other company accounts are being tracked. i know Gujarat zone IT is doing the same on specific cases.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby hanumadu » 09 Nov 2017 21:43

Vineetmehta_del wrote:
hanumadu wrote:The shell company would have acted on behalf its 'clients' to deposit/launder money. The govt can shut down the company and go after the directors. But the money would now be with the clients. How to track all their clients and recover that money? I doubt the company maintained records or if the clients even gave their true names.


I feel that the money from shell company accounts to other company accounts are being tracked. i know Gujarat zone IT is doing the same on specific cases.


But if it was cash, the trail ends with the shell company.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Raveen » 09 Nov 2017 22:31

hanumadu wrote:
Vineetmehta_del wrote:
I feel that the money from shell company accounts to other company accounts are being tracked. i know Gujarat zone IT is doing the same on specific cases.


But if it was cash, the trail ends with the shell company.


No, it ends with the Board of Directors - arrest them and they'll all sing

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 09 Nov 2017 23:21

Indeed. People assume too much honour among thieves while also assuming that the law is ineffective/corrupt/whatever. It is quite ironic. These are people who, when their arm is twisted, will sell out everyone else to save their own behinds.

Some of the worst press I've seen are the ones claiming '99% of cash was deposited, so demo has failed!'. Classic example of not knowing what they're talking about. That's 99% of cash that previously circulated opaquely, which GoI now has a paper trail for! The amount of raw deposit data and analytics ability GoI now has control over is incredible. Action is gated by the lack of enforcement manpower to actually carry out the amount of work to be done, as well as GoI's political imperatives to act at the right time.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Sachin » 09 Nov 2017 23:34

Suraj wrote:Indeed. People assume too much honour among thieves while also assuming that the law is ineffective/corrupt/whatever. It is quite ironic. These are people who, when their arm is twisted, will sell out everyone else to save their own behinds.

You said it sir!! Off late I noticed lots of busting of "fake currency" & "hawala business" in Kerala. There were some stories about DRI and other agencies giving more lucrative deals to "whistle blowers". These folks started ratting on their own colleagues. 48 hours back, a group of Keralite forgers were picked up by Kerala Police CID men, from Bengaluru. This was based on a information received from Kerala. Criminals, by nature would ditch each other if the situation warrants (it is like a Taquiah). This is especially true among the low rung criminals (thieves, smugglers, couriers of smuggled goods etc.). They generally do not have a "wide vision" on what disaster their action would lead to.

Some of the worst press I've seen are the ones claiming '99% of cash was deposited, so demo has failed!'. Classic example of not knowing what they're talking about. That's 99% of cash that previously circulated opaquely, which GoI now has a paper trail for! The amount of raw deposit data and analytics ability GoI now has control over is incredible. Action is gated by the lack of enforcement manpower to actually carry out the amount of work to be done, as well as GoI's political imperatives to act at the right time.

A counter question I have is; if 99% of cash was deposited and if they were all genuine "white money" they should have all gone back to the market now. But the same folks who talk about "99% of cash coming in" are the one who cries that economy has taken a big time hit.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 09 Nov 2017 23:59

Sachin wrote:A counter question I have is; if 99% of cash was deposited and if they were all genuine "white money" they should have all gone back to the market now. But the same folks who talk about "99% of cash coming in" are the one who cries that economy has taken a big time hit.

'The economy' is a combination of the formal and informal economies. Those complaints almost all pertain to the informal economy. Try challenging anyone who starts whining that by asking 'you mean the informal economy, right ? The one where no one pays taxes or reports their income ?' Get them to defend that.

Considering the volume of cash that triggered 'deposits in excess of known wealth' flags and notices, the burden of proof is on the depositor to prove that the money is white. Sure, there are those who simply transact a business with high velocity of daily cash transactions. If they've been running their business properly, they'll have no trouble proving that.

There are lots of small businesses that were operating informally, but are now willing to 'follow the rules'. I think GoI needs to let them off with a one time slap on the wrist in exchange for an undertaking to report income and pay taxes going forward. There are plenty of real big time crooks, and their non-cash wealth in real estate, gold and other property is what GoI should hunt down. Such actions will show justice not just being done, but politically, "seeing as being done".

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Re: Currency Demonetisation and Future course of Indian Economy

Postby hanumadu » 10 Nov 2017 00:38

Suraj wrote:There are plenty of real big time crooks, and their non-cash wealth in real estate, gold and other property is what GoI should hunt down. Such actions will show justice not just being done, but politically, "seeing as being done".


My concern is this process should be done before the 2019 GE. If congress comes back, it has a vested interested in not pursuing these cases as it will show DeMo in a positive light.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Sachin » 10 Nov 2017 12:19

Suraj wrote:Those complaints almost all pertain to the informal economy. Try challenging anyone who starts whining that by asking 'you mean the informal economy, right ? The one where no one pays taxes or reports their income ?' Get them to defend that.

You mean ask any one why they (or their friends - the whiners) dodged the taxes? ;) :lol: . They will have 1000s of reasons. One commie might even say that he is not paying tax because Modi & BJP is ruling the country. He may pay tax, if CPI(M) and Polit Bureau runs the country. But you are right, the people who seem to have got hit are people who did medium to big business; but only using cash.

There are plenty of real big time crooks, and their non-cash wealth in real estate, gold and other property is what GoI should hunt down. Such actions will show justice not just being done, but politically, "seeing as being done".

+1. Unless that is done, every one would just say that "Nothing happened to Ambani & Adaani; but only my poor friend who was a petty smuggler lost every thing". More incidents like what is happening to D.K Shivakumar should start happening in various parts of the country. I see some fire work happening in TN as well (Jaya TV raid).

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Prasad » 10 Nov 2017 12:22

Until people see crooks thrown in jail, IT raids will only get so much traction. Remember, even with Sasikala, it took a SuSwamy to fight for years in the courts to finally get a sentencing. 2G, Coalgate etc etc need to be seen to fruction and associated crooks thrown into jail. CBI hasn't even arrested PC's son let alone get anywhere in the case. 3 years and counting btw. If they're not jailed, people will ask questions and rightfully so.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Aditya_V » 10 Nov 2017 13:14

Prasad wrote:Until people see crooks thrown in jail, IT raids will only get so much traction. Remember, even with Sasikala, it took a SuSwamy to fight for years in the courts to finally get a sentencing. 2G, Coalgate etc etc need to be seen to fruction and associated crooks thrown into jail. CBI hasn't even arrested PC's son let alone get anywhere in the case. 3 years and counting btw. If they're not jailed, people will ask questions and rightfully so.


5 star jail time with frequent bail for 1 figure head the crooks are willing to do, they will make themselves martyrs. What is important to seize their money power and financial assets off their networks- or at least stop their access to it, once their money power is gone their families have to search to do an honest living, it is worse than jail time for these folks.

When they have the Judicial system in thier pocket, trying to get them to jail will not be the best way to get this done.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby JayS » 10 Nov 2017 14:52

Suraj wrote:
There are lots of small businesses that were operating informally, but are now willing to 'follow the rules'. I think GoI needs to let them off with a one time slap on the wrist in exchange for an undertaking to report income and pay taxes going forward. There are plenty of real big time crooks, and their non-cash wealth in real estate, gold and other property is what GoI should hunt down. Such actions will show justice not just being done, but politically, "seeing as being done".


Couldn't agree more. I suppose GOI has already given assurance than no checking of books before 1st July will be done for those coming under tax ambit through GST for the first time. A similar rebate is given for small folks with perhaps only a few lakh rupees of unaccounted cash during demonetization. Only a handful of people in India would turn up all-clear if we remove corruption overnight and implement every damn rule and law strictly. Modi knows he cannot go against majority of folks. That would be a political suicide. And going against big fish is not easy under current system where the C-system patrons still man key posts everywhere. I see only option for going big time against big crooks in short time frame, and that is initiating a purge. But this is also a path very unlikely be followed by BJP. Modi will keep doing structural changes making it more and more difficult to carry out business as usual and force the majority to fall in line. But only issue is people need to see the change in real life in reduction in bribes or corruption or improvement in government functioning. Or they need at least a "dil ko thandak" moment seeing some real big crooks decimated. I somehow do not see either of the two happening. BJP cannot keep stretching the perception that things are changing. Soon people will want real feel of the change. I see a lot of restlessness in people around due to lack of feel of the change that supposedly should have happened in real life yet and thus they are very easily being swayed by propaganda in MSM. In this T20 era results are expected in double quick time. People supported demonetization because it was seen as a masterstroke against corruption. Though it will have significant impact in long term, it hasn't really changed much on the ground for common man. Hope BJP/Modi understands this.


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