Currency Demonetisation and Future course of Indian Economy

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venkat_r
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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 22 Nov 2018 22:34

Well for that..

Is there even one article that showed that black money had been tackled or the fake currency notes have been handled - please post rather than making these condescending comments.

Anything, be it political, social or any other benefits - including what the perona of the people that deservedly were affected by this demonetization ?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby hanumadu » 22 Nov 2018 22:50

Plenty. Look at the increase in tax payers, tax collections and digital payments. Any increase in them automatically leads to a decrease in black money.
If you want to bolster your case here, at least stop trolling here with idiots like Dhruv Rathee and The Wire.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 22 Nov 2018 23:00

Want to understand who were the people that should have been affected? I am making one categorization, pick one group to discuss, as I want to seriously understand what this carpet bombing was all about and who this was supposed to bomb and who are the casualties

I am just making a list, there might be some overlap..

Low income - labor force, agricultural laborers, vegetable vendors, Daly wage workers, ...

Medium income - salaried class, private job holders, some vendors, shop keepers,

Upper middle class - more salaried class, traders, merchants, petrol bunk owners, real estate agents, some political class, small business, professionals like doctors or lawyers who charge cash fee

Big businessmen, big politicians, ..

Please add in who did it affect and why do they deserved it?
Last edited by venkat_r on 23 Nov 2018 02:10, edited 1 time in total.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 22 Nov 2018 23:07

hanumadu wrote:Plenty. Look at the increase in tax payers, tax collections and digital payments. Any increase in them automatically leads to a decrease in black money.
If you want to bolster your case here, at least stop trolling here with idiots like Dhruv Rathee and The Wire.


At least I posted some links to begin with, and if you do not like the people, ignore them, but you should have enough to counter their arguments- till now I have not seen anything that says this has handled black money other this vague logic that somehow this increase in tax payers, and digital payments is going to take care of it in the future.

If you are saying that the benefits are in the future and no benefit in the present because of the demonetization, that is an argument too, I do not want to put the words for you or twist your words, but just asking to clarify.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Supratik » 22 Nov 2018 23:27

venkat_r you are trolling. There is plenty of information over years in the Eco forum to show what the goals were and what were the outcomes. Where is your data? Just quoting far-left websites and videos is not going to do. Show us the data.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 22 Nov 2018 23:59

Supratik, have to respectfully disagree as it is not trolling nor is it my intention - may be I have not looked hard enough, but did not find anything that says that black money has been taken care of or the fake notes have been handled.

If you have please post on these and educate me, willing to learn and understand.

As this demonetization is not initiated by me and I am not the data collecting agency, I can only quote the ones that have some data, even put up something from Wikipedia- an open source which anyone is free to edit if they have good sources. It is the job of the govt To post the proof of demonetization some facts that can stand up to scrutiny.

Having an opinion is not a crime and I do have an opinion now and it is not in favor of demonetization I admit but I am keeping an open mind and want to understand what the truth is. If most people are convinced here, please help me see the light and to convert to that point of view, sincerely want to understand the truth, not sure what else I can say to convince someone here that I want to learn.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 23 Nov 2018 02:08

Here is the speech of Dr.Manmohan Singh on demo
https://youtu.be/Q-d-yP5Fqik

And original prime minister’s speech declaring demo
https://youtu.be/DjiFCLb7hOI

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Re: Currency Demonetisation and Future course of Indian Economy

Postby pankajs » 23 Nov 2018 08:02

Where is Dr. Manmohan Singh's speech on Coal scam or CWG scam or many such economic events under his PMship?

If he claims to be fair and balanced he should start from his own period. I am open to listen and learn from the great economist on Coal, etc scams.

Else it is simply partisan politicking at best. Nothing wrong with that. As a political person he is entitled to his politicking. Only such partisan politicking confirms his and Congress desperation.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby rpartha » 23 Nov 2018 11:56

Venkat_r, question is, what is that you wanted out of demonitization? Did you expect all the people will declare their black money and all the corrupt will go to jail? I think you wanted only politicians to go to jail but if you think you want justice then every one one of us - including low and middle income should be jail as we all cheat at certain level. So why only politicians to be in jail? Even if something like that happened, it would have destroyed the Indian economy. Think about it - every one of the biv spenders behind the bar...

To me, Demonitization put the fear in the m8nds of people. Remember this - Jayalalithaa government put about 20000 govt employees behind the bar and suspended 100000 employees. Every one got their job back after that. So you can argue, it did nothing. But if you had dealt with govt employees before and after that you would have seen the perceptible change in their behaviour and work that gets done in govt offices. So it is about the mind set that government can and will do something. Also people who went black market route lost 20 to 30% in commission. If govt addresses the tax structure further then it will address the black money even further. Pls don't think only top 100 politicians and business men have black money. Everyone has it. It's just the amount that varies. What we needed was change in thinking and system. In that way, I would think Demonitization addressed it.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Gus » 23 Nov 2018 14:03

my CA cousin who runs his own company..I could not even meet him for almost two months now. he's terribly busy with IT filings as volume has tripled for him. Spoke with him and he was telling that companies have to report turnover properly as everything is linked. earlier, they'll report higher turnover and lesser profits, to cheat on income tax. but on the VAT side, they'll maximize their credits. Now they cannot do that and discrepancies are caught by the system and no room for arbitration/interpretation and "Adjustments".

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Pratyush » 23 Nov 2018 15:37

Venkat, what do you mean by effected by demonization. What kind of effects you are seeking and the absence of which means that demonization failed. Once we have a clear understanding of the frame of reference. We can have a discussion.

Else at best you are talking past the other members. At worst you are trolling.

It helps to have a clearly thought out position that can stand scrutiny. And not just repeat opposition talking points that cannot stand scrutiny of any reasonable observer.

Take your pick.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Supratik » 23 Nov 2018 19:55

venkat_r, as I said there is enough information on this forum about demonetization collected from various non-political sources. You are not a kid that you have to be spoon-fed. Quoting political sources without generating data just becoz it suits your agenda is fooling no one. if you have useful data show us.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 28 Nov 2018 09:54

pankajs wrote:Where is Dr. Manmohan Singh's speech on Coal scam or CWG scam or many such economic events under his PMship?

If he claims to be fair and balanced he should start from his own period. I am open to listen and learn from the great economist on Coal, etc scams.

Else it is simply partisan politicking at best. Nothing wrong with that. As a political person he is entitled to his politicking. Only such partisan politicking confirms his and Congress desperation.


If you have an issue with Manmohan’s policies, please start a new thread on that - give some explanations to the pieces he raised if possible and he is the economist that our country has been banking on for some decades now, so let’s not dismiss his views on this particular matter

Please do not go down the road of character assasination if you do not agree with a paticular person’s views - does not help the discussion or the analysis

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Re: Currency Demonetisation and Future course of Indian Economy

Postby prasannasimha » 28 Nov 2018 09:58

Want to know one real effect of demonitization. It is possible now to get both buyers and sellers for real estate in full white. Previously near impossible .

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 28 Nov 2018 10:07

rpartha wrote:Venkat_r, question is, what is that you wanted out of demonitization? Did you expect all the people will declare their black money and all the corrupt will go to jail? I think you wanted only politicians to go to jail but if you think you want justice then every one one of us - including low and middle income should be jail as we all cheat at certain level. So why only politicians to be in jail? Even if something like that happened, it would have destroyed the Indian economy. Think about it - every one of the biv spenders behind the bar...

To me, Demonitization put the fear in the m8nds of people. Remember this - Jayalalithaa government put about 20000 govt employees behind the bar and suspended 100000 employees. Every one got their job back after that. So you can argue, it did nothing. But if you had dealt with govt employees before and after that you would have seen the perceptible change in their behaviour and work that gets done in govt offices. So it is about the mind set that government can and will do something. Also people who went black market route lost 20 to 30% in commission. If govt addresses the tax structure further then it will address the black money even further. Pls don't think only top 100 politicians and business men have black money. Everyone has it. It's just the amount that varies. What we needed was change in thinking and system. In that way, I would think Demonitization addressed it.


Partha, glad that you asked that question “What is that you wanted out of demonetization” - pretty fundamental!

It is not what I want, but what did the government want out of it ? The stated outcome was getting rid of black money, but that did not happen. If that was the objective, then what happened to that objective and results show from RBI data that 99.3% of the cash came back into the system. If that is not the objective, then what is this carpet bombing all about?

Also, you stated that “we all cheat” at certain level, so did this demonetization make all the people or a lot of people who had more than normal cash as criminals? What I fail to understand is who did this demonetization help? I cannot think of one single segment of people other than some vague references.

Also, the job of the government is to build the confidence of people in economy and in stability, not to induce fear. I cannot fathom something like this can be pulled off in any country with decent civil society, unless there is economic chaos in the country.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Aditya_V » 28 Nov 2018 10:17

But much of that money has come in and is being taxed, if you had gone through the posts Direct Tax collections in 2015-16 which were 7.4 Lac crore jumped to 10.05 Lac crore in the 2017-18 Re and Indirect Tax collections without customs has jumped to 8.06 lac crore in 2017-18 RE from 5.04 crore in 2015-16. Meaning people have come in to the Direct and Indirect collection net, they cant go back to the old ways again without it being glaringly obvious, thats why GST collection without the cash cows of Petroleum and Alcohol are now more 1 lac crore a month. Definitely the amount of black money in circulation has come down dramatically and most people who should be paying taxes are paying taxes.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 28 Nov 2018 10:21

Pratyush wrote:Venkat, what do you mean by effected by demonization. What kind of effects you are seeking and the absence of which means that demonization failed. Once we have a clear understanding of the frame of reference. We can have a discussion.

Else at best you are talking past the other members. At worst you are trolling.

It helps to have a clearly thought out position that can stand scrutiny. And not just repeat opposition talking points that cannot stand scrutiny of any reasonable observer.

Take your pick.


I am a nobody on demonetization, let’s forget about what I want from it, and discuss what it was intended for. Lot of people standing in the lines and lots of lost opportunities for the small scale traders and the cost of reprinted notes etc.. let’s see what was it done for and if it achieved that. - let’s discuss what was the government’s objective in doing the demonstration- which is eradication of black money, did that happen? If not that what else should be the objective of the demonetization? Removing fake notes, terror funding, what else?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 28 Nov 2018 10:40

Aditya_V wrote:But much of that money has come in and is being taxed, if you had gone through the posts Direct Tax collections in 2015-16 which were 7.4 Lac crore jumped to 10.05 Lac crore in the 2017-18 Re and Indirect Tax collections without customs has jumped to 8.06 lac crore in 2017-18 RE from 5.04 crore in 2015-16. Meaning people have come in to the Direct and Indirect collection net, they cant go back to the old ways again without it being glaringly obvious, thats why GST collection without the cash cows of Petroleum and Alcohol are now more 1 lac crore a month. Definitely the amount of black money in circulation has come down dramatically and most people who should be paying taxes are paying taxes.


Glad you posted some figures, and can you also please post the links?

Here is a link to the analysis on the RBI report that came out
https://thewire.in/economy/how-successful-was-demonetisation-four-takeaways-from-the-rbis-annual-report

Quote from that article “Now, even if 100% of demonetised currency returned to the system, it does not mean all of this cash was ‘white’ or money that was generated through wholly legal means. It is the job of the income tax department and various investigative agencies to determine how much of it is ‘black’ or illegally obtained and which depositors need to be examined for trying to cheat the system.”

On the propagation of high value notes

“Before demonetisation, Rs 500 and Rs 1,000 notes accounted for 86% of the currency in circulation.

Overall, the value of banknotes in circulation increased to Rs 18.04 lakh as at the end of March 2018, a 37.7% year-on-year increase. There was, however, a 2.1% increase in the volume of banknotes.”

Read the article or go through the RBI report that it has taken the data from if you have more time.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 28 Nov 2018 10:58

Aditya_V, Here is some inwwformation I found on the tax base increase

https://www.ndtv.com/india-news/did-demonetisation-increase-tax-base-not-really-1772370

https://www.livemint.com/Politics/C4Q8mpskSbfEzmG8ZWBY9H/Can-we-measure-demonetisations-impact-on-income-tax-collect.html

https://economictimes.indiatimes.com/markets/stocks/news/did-cash-ban-help-raise-tax-base-itrs-rising-but-not-tax-collection/articleshow/65896757.cms

These articles give the picture that is contrary - just read them as I am not going to post them in full

“But reaching a conclusion on the basis of buoyancy is "a very dangerous thing to do", adds Pant. "The tax buoyancy has been seeing a fluctuating trend in the past 10 years. One can say the current rise in DTB is because of demonetisation. Calendar 2017 was bad, as the economy was recovering from demonetisation, coupled with base effect. Calendar 2018 would show bumped-up numbers. Chances are the 2019 numbers may be low. So, DTB alone is not sufficient to judge tax collection," he cautioned.
..
But reaching a conclusion on the basis of buoyancy is "a very dangerous thing to do", adds Pant. "The tax buoyancy has been seeing a fluctuating trend in the past 10 years. One can say the current rise in DTB is because of demonetisation. Calendar 2017 was bad, as the economy was recovering from demonetisation, coupled with base effect. Calendar 2018 would show bumped-up numbers. Chances are the 2019 numbers may be low. So, DTB alone is not sufficient to judge tax collection," he cautioned.


And
“Rising ITRs and direct tax buoyancy may paint a rosy picture. But they do not really say much. The real giveaway is the low increase in the tax-to-GDP ratio, which suggests tax collection has not really been up to the mark. “

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Re: Currency Demonetisation and Future course of Indian Economy

Postby pankajs » 28 Nov 2018 11:23

venkat_r wrote:
pankajs wrote:Where is Dr. Manmohan Singh's speech on Coal scam or CWG scam or many such economic events under his PMship?

If he claims to be fair and balanced he should start from his own period. I am open to listen and learn from the great economist on Coal, etc scams.

Else it is simply partisan politicking at best. Nothing wrong with that. As a political person he is entitled to his politicking. Only such partisan politicking confirms his and Congress desperation.


If you have an issue with Manmohan’s policies, please start a new thread on that - give some explanations to the pieces he raised if possible and he is the economist that our country has been banking on for some decades now, so let’s not dismiss his views on this particular matter

Please do not go down the road of character assasination if you do not agree with a paticular person’s views - does not help the discussion or the analysis

What you write is incredible! If asking is character assasination then that is exactly what your are doing by asking questions.

Surely, asking for an account of the various scams under his PM ship is not character assasination just as raising questions on demo is not.

If not then why must we spare the great economist Dr. Manmohan Singh'a tenure? Or is it is and does not support your narrative now that Dhruv Rather has been shown for the propogandist that he is.

After all the great economist Dr. Singh hasn't yet given a proper explanation of the various scams under his term. His words stand greatly diminished till he answers for his 10 years in office.

Doesn't the good book say only someone is pure is eligible to throw stone at others. Let the great economist come clean on his role in the coal scam and then we can listen to him.

Till then the great economist is JUST another politico and his words will be treated as those of other politicos. Nothing wrong is being a politico.
Last edited by pankajs on 28 Nov 2018 11:36, edited 2 times in total.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby nandakumar » 28 Nov 2018 11:25

Let us get one thing out of the way. Every expert committee since the famous Wanchoo Committee has conceded that any war on black money ought to involve demonetisation of high denomination currency as one of its components. While it would be nice if all the ill gotten and tax evaded money stored in high denomination notes didn't come back neither the Governments of the past and by extension the present one as well was not naive enough to think that this would happen. A good chunk of it was expected to masqurade as clean money and come back into the system. What has altered the situation since Wanchoo Committee days is the increasingly sophisticated ways by which money can be made to look clean or make the round trip back as export proceeds. Also look at it from the perspective of a tax evaded or a corrupt politician. Between 100% certainty of losing your entire currency hoard (if the notes were not tendered) and 100% probability of losing only 30% or for that matter, even 10% probability that you could get away with 50% of such wealth by litigating your way out of trouble by tendering the notes, what would you choose? It is no brainer. Ten times out of ten you would choose to tender. So to look for evidence of success (demonetisation) in the percentage of unreturned notes is naive. Also remember, there is no scientific way of flushing out counterfeit notes from the system in a wholesale manner. If anyone genuinely believed that this was a serious problem from a national security perspective what choices did the country have?
The long and short of it is this. You need alternative measure of success. If we can establish that something good has happened in the last two years and the extent of it is unprecedented in comparison to the past and lastly nothing significant from a policy perspective comparable to demonetisation has happened in the last two years then that good thing can only be attributed to demonetisation. I know people might say correlation is not causation and so on although one can make out a persuasive case even for that, but without getting into that you will to say demonetisation must have had something to do with it. Now what is that something? It is the performance on tax collections at the Centre. Between April -Sep 2016 and Apr-Sep 2018 direct and indirect tax collection combined have grown in excess of 50%. That gives an annualised average growth rate in collection of 25% (Source: cga.gov.in). It hasnt happened in the past. So what could have made that possible?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby pankajs » 28 Nov 2018 11:29

venkat_r wrote:
Aditya_V wrote:But much of that money has come in and is being taxed, if you had gone through the posts Direct Tax collections in 2015-16 which were 7.4 Lac crore jumped to 10.05 Lac crore in the 2017-18 Re and Indirect Tax collections without customs has jumped to 8.06 lac crore in 2017-18 RE from 5.04 crore in 2015-16. Meaning people have come in to the Direct and Indirect collection net, they cant go back to the old ways again without it being glaringly obvious, thats why GST collection without the cash cows of Petroleum and Alcohol are now more 1 lac crore a month. Definitely the amount of black money in circulation has come down dramatically and most people who should be paying taxes are paying taxes.


Glad you posted some figures, and can you also please post the links?

Here is a link to the analysis on the RBI report that came out
https://thewire.in/economy/how-successful-was-demonetisation-four-takeaways-from-the-rbis-annual-report

Quote from that article “Now, even if 100% of demonetised currency returned to the system, it does not mean all of this cash was ‘white’ or money that was generated through wholly legal means. It is the job of the income tax department and various investigative agencies to determine how much of it is ‘black’ or illegally obtained and which depositors need to be examined for trying to cheat the system.”

On the propagation of high value notes

“Before demonetisation, Rs 500 and Rs 1,000 notes accounted for 86% of the currency in circulation.

Overall, the value of banknotes in circulation increased to Rs 18.04 lakh as at the end of March 2018, a 37.7% year-on-year increase. There was, however, a 2.1% increase in the volume of banknotes.”

Read the article or go through the RBI report that it has taken the data from if you have more time.

Wire.in is propoganda similar to the analysis done by the propogandist Dhruv Rather based on selective RBI data.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Aditya_V » 28 Nov 2018 11:50

Venkat_r, link for my numbers is from https://www.indiabudget.gov.in/

And in some of the links the comments are against the numbers presented and there are adjusted made without giving a basis for those.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Kashi » 28 Nov 2018 11:58

The liar article also admits that

"[O]verall detection of counterfeit notes was 31.4% lower than the previous year, this was because of a decrease in fake Rs 500 and Rs 1,000 notes, which were of course banned in November 2016."

So demonetisation DID achieve a reduction in FICN, which was one of the objectives.

Also

"In March 2017, the share of Rs 500 and Rs 2,000 currency notes, in value terms, accounted for 72.7% of the total value of banknotes in circulation. This increased to 80.2% at the end of March 2018, according to the report.

Before demonetisation, Rs 500 and Rs 1,000 notes accounted for 86% of the currency in circulation."

So the proportion of hig-value banknotes DID come down from 86.2% to 80.2%, a FULL one and a half year after demonetisation, despite increase this year.

The currency to GDP ratio is now 10.7% as compared to 12.1% pre-demonetisation levels.

So what's the debate here?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby pankajs » 28 Nov 2018 12:10

That is exactly what Dhruv Rathee, Wire.in and the rest are saying. There should be no debate! We should just accept whatever twist they impart to the data and their version of the data, analysis, commentary and conclusion.

If you ask a reverse question or want to ask for an account of their own doings before you listen to their complain against another it is called character assassination!

Jai ho. Jai ho!

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Kashi » 28 Nov 2018 12:59

Pankajs I understand where you are coming from. But I would say it'll be far more impactful to dissect the claims being made, while at the same time not shying away from questioning the credibility of the "messanger".

For example you did a great job when you pointed out that Rathee or whatever he's called was being "economical" with the truth when he posted digital payments data for just four months before claiming that digital push had failed. Of course, examining the data till present clearly showed that the post-Demo jump in digital payments had been on a steady increase after a few lurches.

Likewise, I recall MMS standing up in the parliament and claiming that DeMo would lead to a 2-3% CONTRACTION in the GDP. Now I am no economist or even a mathematician, but correct me if I am wrong, I understand contraction to imply, reduction or shrinkage in quantity. That is if you had 100 of something and after sometime you find that you have only 95 of those, that would imply that your assets have contracted with the passage of time time.

We all know that GDP GROWTH did slow down for a couple of quarters owing to DeMo, soon followed by GST- it rebounded soon thereafter. Once again, it was not DeMo alone that contributed to the slow down, there were many other factors that have been discussed to death here.

Look at the operative word- growth. Growth by itself implies an increase, so if the rate of increase slows down, it still means an increase, albeit on a smaller scale. Suppose one had 100 of something and were expecting an increase of 10, but ended up adding only 7, you still have 107 now as compared to 100 earlier. I do not believe that we need an economist or a mathematician to tell you that an increase in numbers is definitely not contraction.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Karan M » 29 Nov 2018 19:53

venkat_r wrote:
pankajs wrote:Where is Dr. Manmohan Singh's speech on Coal scam or CWG scam or many such economic events under his PMship?

If he claims to be fair and balanced he should start from his own period. I am open to listen and learn from the great economist on Coal, etc scams.

Else it is simply partisan politicking at best. Nothing wrong with that. As a political person he is entitled to his politicking. Only such partisan politicking confirms his and Congress desperation.


If you have an issue with Manmohan’s policies, please start a new thread on that - give some explanations to the pieces he raised if possible and he is the economist that our country has been banking on for some decades now, so let’s not dismiss his views on this particular matter

Please do not go down the road of character assasination if you do not agree with a paticular person’s views - does not help the discussion or the analysis


Let me see, so far.. you have quoted one AAP propagandist. One ex BJP guy with a severe case of "I was not given a ministerial berth". One website which is but a propaganda channel for the Indian Left. Now you are quoting another gent from the opposition who literally gave the BJP the country on a platter thanks to his incompetent stewardship.

And you think acting like a mouthpiece for these guys is equal to making an argument? That you are somehow debating?

I am really puzzled. Do you really think people can't look through your political agenda and biased "sources"?

Up your level of contribution beyond trolling.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby rpartha » 01 Dec 2018 01:41

venkat_r wrote:
rpartha wrote:Venkat_r, question is, what is that you wanted out of demonitization? Did you expect all the people will declare their black money and all the corrupt will go to jail? I think you wanted only politicians to go to jail but if you think you want justice then every one one of us - including low and middle income should be jail as we all cheat at certain level. So why only politicians to be in jail? Even if something like that happened, it would have destroyed the Indian economy. Think about it - every one of the biv spenders behind the bar...

To me, Demonitization put the fear in the m8nds of people. Remember this - Jayalalithaa government put about 20000 govt employees behind the bar and suspended 100000 employees. Every one got their job back after that. So you can argue, it did nothing. But if you had dealt with govt employees before and after that you would have seen the perceptible change in their behaviour and work that gets done in govt offices. So it is about the mind set that government can and will do something. Also people who went black market route lost 20 to 30% in commission. If govt addresses the tax structure further then it will address the black money even further. Pls don't think only top 100 politicians and business men have black money. Everyone has it. It's just the amount that varies. What we needed was change in thinking and system. In that way, I would think Demonitization addressed it.


Partha, glad that you asked that question “What is that you wanted out of demonetization” - pretty fundamental!

It is not what I want, but what did the government want out of it ? The stated outcome was getting rid of black money, but that did not happen. If that was the objective, then what happened to that objective and results show from RBI data that 99.3% of the cash came back into the system. If that is not the objective, then what is this carpet bombing all about?

Also, you stated that “we all cheat” at certain level, so did this demonetization make all the people or a lot of people who had more than normal cash as criminals? What I fail to understand is who did this demonetization help? I cannot think of one single segment of people other than some vague references.

Also, the job of the government is to build the confidence of people in economy and in stability, not to induce fear. I cannot fathom something like this can be pulled off in any country with decent civil society, unless there is economic chaos in the country.



So your only point is - government said something that they want to achieve on the night of declaring demonitization and they failed to achieve it. They may have said 101 things after that but you just don't care. Also you just don't care the changes it has made, mindset changes it has made, higher tax collections, the impact of introducing GST, CAs terrified and encourahing the people to declare atleast more if not all etc because your point is - again, it did not achieve what government said on the night of the announcement... also you are not going to put any points to support your view and you are only going to pick on others - because it is very easy to do AND because the government failed to achieve what they have said on the night of announcement... good luck mate... I am done with this argument...

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Aditya_V » 01 Dec 2018 21:51

CA's are not terrified, lot of malpractice done by businessmen are blamed on CA's. These people don't consult they do whatever they like and blame others.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby Gus » 01 Dec 2018 22:44

Biz people demand CA to do things or else they'll take account elsewhere. It's not right to blame one party in a connected ecosystem of tax evasion.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby kiranA » 02 Dec 2018 04:06

Demonetization has been a failure by the stated objectives of the govt which bought up demon , namely - elimination of black money and a one time bonanza for treasury ( Govts own attorney in Supreme Court made the claim they expect lakhs of crores of bonanza). It didn't happen . There are no two opinions about it. Even Modi stopped talking about it. In addition every economist worth his salt said the move was a disaster. Even govts own chief economist Subramanian called it draconian in recent interview. Steve Forbes of famous forbes magazine called it sickening and immoral. Though Forbes opinion was dismissed in this forum it tarnished Indian govt image abroad as Steve is editor in chief of the magazine and twice a candidate for US presidentship for republican party.

But where debate gets so intractable and emotional for demon opposes is that it created so much pain for so many people, standing in lines for nothing is not fun, unable to receive or make payments is not fun, forcing to give up medical care or postponing, deaths etc are not fun, collapse of informal economy and a massive reduction of growth (2 percentage points equals 40 billion USD of lost growth opportunity). Especially when the stated objectives have not been achieved. The opposers focus on effects to Indian people and Indian economy. And creating hardships on a people already so poor through deliberate policy action when there are so many other avenues to attack black money or bring growth simply does not sit well with them morally.

On the other hand for supporters of demon focus on potential indirect benefits (the direct stated benefits are ofcourse a failure) it brings to government such as taxes or (potential) visibility though digital payments and tend to be dismissive of suffering of people or even deny suffering against all evidences by pointing to election results in UP etc. Some even welcome the suffering because they believe black money hoarders suffered "more" though there is no data supporting (after all of the money was laundered to back accounts with a generous help from govt employees and bureaucrats). They have changed the benchmarks for demon success so often and have started linking anything remotely positive to government coffers they can see with Demon. A spike in Digital payments were linked to demon, a brief pause in stone pelting in Kashmir was linked to demon, increase in tax filings was linked to demon. And now the latest and greatest benchmark against which demon is to measured is something called "formalization of economy". I am an avid follower of economic statistics and I have never ever came upon any index called "formalization of economy" - if it were so desirable there would be one.

In such emotionally charged atmosphere it is difficult to debate. The view points are vastly different - on oneside are economists and others who believe state should facilitate economic growth to improve the lives of people and on otherside are people who are OK with deliberately creating and enforcing hardships on people if it produces significant gains for government finances. I can understand the supporters viewpoint but no significant gains were produced.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby shaun » 02 Dec 2018 09:09

Well , I know one person who lost almost half his "wealth" just to save the other half , still repenting....and pseudo companies getting closed , you will find more such stories in a land of billion.

https://www.firstpost.com/business/govt-cancelled-2-24-lakh-suspected-shell-companies-post-demonetisation-disqualified-3-09-lakh-directors-4194085.html

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Re: Currency Demonetisation and Future course of Indian Economy

Postby hanumadu » 02 Dec 2018 10:25

That guy in MP who said a piece of land he was looking to buy became 20 lakh cheaper after DeMo is a prime example of success DeMo. Hardships were temporary for the vast majority of the people. Prolonged hardships are only for the corrupt scumbags. Anybody who is still crying 2 years after DeMo either ideologically hates BJP/Namo or lost a wad of cash.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby yensoy » 02 Dec 2018 21:59

If you follow Gurumurthy's latest speech (available on youtube), you will see that he said the economy would have collapsed if not for demo; but the argument - at least my understanding of it - was not because of gold and real estate, rather that demo essentially recapitalized bank deposits, and banks finally started lending again. His complain against the status quo is that banks lending power is dictated by the amount of funds which are deposited with it which largely seems to be driven by whimsical FDI dollars coming in.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby VKumar » 02 Dec 2018 22:21

But for the perfidy of bankers, Demo would have wiped out huge chunks of cash. I heard of one businessman who burnt one sack full of cash till his banker helped him.

I think government underestimated the corruption capability of bankers.

Gradually stop printing high value notes - 2000, 500, do not replace these notes. Economy will be forced to go digital.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 02 Dec 2018 23:20

Karan M wrote:
venkat_r wrote:
If you have an issue with Manmohan’s policies, please start a new thread on that - give some explanations to the pieces he raised if possible and he is the economist that our country has been banking on for some decades now, so let’s not dismiss his views on this particular matter

Please do not go down the road of character assasination if you do not agree with a paticular person’s views - does not help the discussion or the analysis


Let me see, so far.. you have quoted one AAP propagandist. One ex BJP guy with a severe case of "I was not given a ministerial berth". One website which is but a propaganda channel for the Indian Left. Now you are quoting another gent from the opposition who literally gave the BJP the country on a platter thanks to his incompetent stewardship.

And you think acting like a mouthpiece for these guys is equal to making an argument? That you are somehow debating?

I am really puzzled. Do you really think people can't look through your political agenda and biased "sources"?

Up your level of contribution beyond trolling.


Yeah right - this is what BRF has come to now, this is a discussion forum, so how did you determine that some one is AAP’s mouth piece? I have even quoted Wikipedia and you have a problem with that?

And you are the guy who is calling names of the guy who has been the prime minister of India for 10 years and a finance minister before and as you are the moderator you want to raise my troll level as I have posted the links and figures ! Nice logic and good going,

Even if someone is the mouthpiece of AAP, is that any criteria for hatred and anything that says that they should not be interested in India? Or is that only the sole prerogative of one party or one group of people? Fail to understand where this is coming from.

The figures are from RBI report and you have a problem with that? And most news sources are quoting from that - pretty interesting - And this kind of forum moderation is pretty appalling
Last edited by venkat_r on 02 Dec 2018 23:32, edited 2 times in total.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 02 Dec 2018 23:21

yensoy wrote:If you follow Gurumurthy's latest speech (available on youtube), you will see that he said the economy would have collapsed if not for demo; but the argument - at least my understanding of it - was not because of gold and real estate, rather that demo essentially recapitalized bank deposits, and banks finally started lending again. His complain against the status quo is that banks lending power is dictated by the amount of funds which are deposited with it which largely seems to be driven by whimsical FDI dollars coming in.


can you give any one economist other than govt appointed one to say that this is a good move? It is like saying 99% of the people are conspiring against us

Take from Amartya sen to Manmohan to Raghuram Rajan to anyone else of repute saying that this is a good move ?
Last edited by venkat_r on 02 Dec 2018 23:35, edited 1 time in total.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 02 Dec 2018 23:24

rpartha wrote:
So your only point is - government said something that they want to achieve on the night of declaring demonitization and they failed to achieve it. They may have said 101 things after that but you just don't care. Also you just don't care the changes it has made, mindset changes it has made, higher tax collections, the impact of introducing GST, CAs terrified and encourahing the people to declare atleast more if not all etc because your point is - again, it did not achieve what government said on the night of the announcement... also you are not going to put any points to support your view and you are only going to pick on others - because it is very easy to do AND because the government failed to achieve what they have said on the night of announcement... good luck mate... I am done with this argument...


Yes, unless you give some valid arguments, on how this benefited India or the people of India, there is an RBI report to read and is there anything that proves with data that this benefited there is no argument- you are welcome to keep your opinion.

Why don’t you tell me what the government said, cashless or digital payments or the terrorism, any others if so please write other than making sweeping statements, and the data from RBI report does not support that.

People can clutch on to the straws by claiming partial statistics, or some small wins, but this is a carpet bombing at a big scale and this level of effort needs better results. If this was so good, then why is every other country not jumping on this bandwagon?

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Re: Currency Demonetisation and Future course of Indian Economy

Postby salaam » 02 Dec 2018 23:44

venkat_r wrote:Yeah right - this is what BRF has come to now, this is a discussion forum, so how did you determine that some one is AAP’s mouth piece? I have even quoted Wikipedia and you have a problem with that?


Registering with a new username and serving old wine in a new bottle aren’t gonna help here.

Nobody invited you to a nationalist forum. You came to paddle your left leaning opinions. If nobody is buying it, stop your trolling and gracefully bow out.

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Re: Currency Demonetisation and Future course of Indian Economy

Postby venkat_r » 02 Dec 2018 23:50

kiranA wrote:
In such emotionally charged atmosphere it is difficult to debate. The view points are vastly different - on oneside are economists and others who believe state should facilitate economic growth to improve the lives of people and on otherside are people who are OK with deliberately creating and enforcing hardships on people if it produces significant gains for government finances. I can understand the supporters viewpoint but no significant gains were produced.


Appreciate your comments, and may be this is a wrong place to debate as people are too charged up on the issue, not sure if it is worth the debate as very little is getting debated and people calling names ls what is left.

Gonna leave this as is for now.


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