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

Post by venkat_r »

Pratyush wrote:I will make no difference to the government if it plans to have another round of demonitasition. It will simply go ahead. No amount of grandstanding by the opposition will help.
Exactly !!! Seems like the govt gave the right impression to the people and on top of it people love it too as it has removed the black money from the market.

As all the articles posted in this thread prove that demonetization was good for the economy, I say let the govt do it again.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

A_Gupta wrote:http://www.livemint.com/Money/EopbIW2tq ... ising.html

"In December, steel consumption rose by 5.2% over a year ago and by 17.1% over November, according to data collated by the government’s Joint Plant Committee (JPC)."

Since these numbers are counter-intuitive from the demonetization POV, the analysts believe that this has simply gone into inventory.
That doesn't make sense. 'Consumption' means utilization of production rather than inventory buildup. Not all aspects of black economy are black. RE transactions may be black, the workers may be paid cash off the books and without any consideration for minimum wage, employment laws, overtime etc, but the feedstock going into construction is paid for and constitutes black money turning white.

One potential consequence of demonetization is an accelerated effort to build capital infrastructure using black money . E.g. builders rather than trying to hide, build more, and take the liability for their cash out of their hands, in exchange having more real estate that they subsequently transact in white. This constitutes an instance of black economy turning white, which in turn will show up as increased GDP growth.

Added: I also checked worldsteel data, which is only available upto Nov 2016 at this point. Indian production in November, supposedly worst hit by DeMo, was steady at above 8 million tonnes, as it's been every month since June 2016.
nandakumar
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Re: Currency Demonetisation and Future course of Indian Economy

Post by nandakumar »

The JPC is a producers' body. In the pre liberalisation era they would make allocation of who gets what quantity of steel. Now it is just like any other industry association, collecting production data. So technically the steel plant output could be leading to stock yard inventory build up or even dumped on distributors and counted as sales.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by durairaaj »

I wish the government gives tax benefits to those who pay through Rupay/etc... credit / debit card or via digital transaction. In South Korea, the government gives tax benefits to the amount paid though creadit and debit card. The tax page infact lists monthwise our transactions to credit, debit, pension fund, insurance, medical bills, etc... with no other paper work reqd.

also the RBI shall consider enabling all POS has cash giving option as in Wal-Marts in USA. This will increase the turnover of cash and reduce the cost of ATM establishment for the banks.

To people who are in contact with high places: Please do suggest these options up there. Sending emails to PMO does not lead to any results other than replies calling us to support PM NaMo.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by KLNMurthy »

I am back from my trip to India; thanks again to everyone who provided advice and information about the demonetization.

As promised, here are my personal experiences and impressions.

Landed in Hyderabad December 28th; travelled to Andhra Dec 30-Jan 2nd; stayed in Hyderabad till Jan 13th.

Summary: Personally, I would say I was only mildly inconvenienced by the demonetization and cash crunch, nothing that prevented me from accomplishing what I needed to accomplish. People both higher-up and lower-down on the economic ladder than myself seem to have been affected more. There was anecdotal evidence of significant level of demonetization-related corruption that came to my attention, though I didn't go around actively looking for the evidence. I heard a good deal of grumbling but no demonstrations or street riots. I would say there will be significant long-term impact, not all of it positive.

Data points:

-- I went prepared with Ola Money and PayTM, both loaded with a couple of thousand rupees. I also begged about Rs. 1800 in 100 rupee-notes from friends and relatives.

-- At Hyderabad airport on Dec 28th, no ATMs were working. When I tried to convert foreign exchange, I was told that the limit was only USD 70, that too at a much lower rate than market rate; basically they took USD 70 and handed me two 2K notes.

-- For transportation in Hyderabad, Uber was my salvation till the Uber & Ola strike that started on Jan 3rd. After that, I could only use cash as cab companies and auto drivers mostly didn't support digital payments, or didn't want to, since they needed to access cash for their own expenses. One cab company booked my cab with an assurance that the driver will take PayTM, but apparently told the driver the exact opposite, namely that I would pay in cash.

--I was told that there was no chance at all in Andhra of using any kind of digital payments, even less so than in Hyderabad. I managed my Andhra trip by having relatives fronting me the cash and reimbursing them through bank transfer.

-- In general, PayTM was quite lame and useless for my purposes. A few small businesses like xeroxing shops etc., did take PayTM, but most of the time the businesses either didn't take it, or the PayTM app would just time out repeatedly. I suspect that PayTM is under-resourced in terms of servers and bandwidth. Some vendors, like the guy who sold visitor passes at the airport, told me that, if they took PayTM instead of cash, that would massively slow down their service rate, since they have a lengthy queue of customers. That made sense to me; where speed of a transaction is critical, there is still nothing like exact change cash.

An ironic data point was that, on the same day that the Finance Minister was in the headlines touting digital payments, the Income Tax department's state headquarters in Hyderabad told me that they were unable to accept digital payment for a Rs. 160 fee; when I mentioned the irony of the IT department, which is an arm of the Finance Ministry, not supporting digital payment, they just shrugged and grinned.

--The small retail shop owner in my locality told me his business was off by 30-40%, due to his low-income customers not having enough disposable cash due to demonetization; according to him, those who get paid in cash aren't getting enough work and hence enough cash.

--Multiple cab drivers reported a drop in business and earnings, as well as problems accessing cash for their expenses. Many had real concerns about being able to meet their car payments and feeding their families. (To be fair, this was not entirely due to the cash crunch; there is currently a glut of cabbies in Hyderabad due to a lot of people flocking to become Uber and Ola drivers following "incentives" offered by those companies).

--When I went to my bank on Deceber 28th, I could withdraw my weekly quota of Rs. 24K, but only in 2K notes. According to the cashier, they had Rs. 500 notes, but only for the ATMs, but then the ATMs were out of money. I mostly managed my expenses with my US credit card, and paying or reimbursing people through online bank transfer, though I faced a lot of grumbling about the bank transfer, which can take as long as 12 hours to go through, and still left people unable to access cash.

--I received one offer of getting more than my 24K per week share of cash, made indirectly from a manager of a branch of Andhra Bank, provided I ws willing to pay a 10% premium. I was told that the offer was only for people who were introduced by persons well known to the manager.

--In the second week, when I went to my bank to get my weekly quota of 24K, I was told that I could only get 4K, and if I wanted the full 24K I would have to go to the branch where I had my account. Relatives who were in metros like Mumbai told me that this restriction seems to be a uniquely Hyderabadi feature, as the local bank managers may be holding on to the cash allocated to them by RBI, so as to allow favored customers (or maybe those who paid a bribe) more cash than their quota.

--At least one cabbie told me that some of his rich regular customers engaged in orgies of drinking and debauchery to use up their stacks of old notes, which they could use by paying a premium of 30% or more. According to this guy, many agents made lakhs in a couple of hours by colluding with bank officials to buy up demonetized notes at a huge discount. It probably depends on one's bias and subjective judgment whether to this, coupled with the offer I received (which indicates that this kind of "discount" offer must be widespread), all adds up to "institutionalized" corruption or whether it stops at "bad apples" level.

--After about Jan 10th or so, I felt that the cash crunch had eased from my perspective; though it may have been due to my expenses also tapering off by then. Also, I noticed that 2K notes were easier to break by then. There seemed to be more Rs. 500 and Rs. 100 notes about.

--A relative who worked as cashier at a bank branch in the Muslim-dominated Old City reported facing constant abuse and threats from customers when they were told that he is out of cash; he was wondering how he was supposed to produce cash that he didn't have. I am emphasizing the "Muslim-dominated" bit because, in his view, his customers, as Muslims, were particularly aggressive towards him.

--Interest rates for bank deposits have dropped; according to a bank manager, it is directly related to the amount of cash flowing into banks due to demonetization. Previously a 1 year fixed deposit used to fetch about 9%, which is barely above inflation rate of 8%, now it is around 7%, and expected to drop further down. According to this manager, Modi's intention is to drive interest rates down to "international levels" by his second term.
Last edited by KLNMurthy on 21 Jan 2017 04:37, edited 3 times in total.
KLNMurthy
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Re: Currency Demonetisation and Future course of Indian Economy

Post by KLNMurthy »

kiranA wrote: ...
Didnt mean for you to take it so personally. Political leanings bring in wilful ignorance without the person noticing it much.

I believe I was right to call you out on empathy. Because you, like in this post, as well - aggressivley question the intent of anyone who criticize demon and refuse to ponder over the information they present.

There are no black money people and white money people - a man can have both the monies with him. black money is question of discipline and compliance. using demon is like replacing a scalpel with a chain saw.
I don't think you know what "calling out" is. Let me offer you a sample.

So, you, a newbie with no knowledge of what longtime posters know or don't know, have the nerve to tell one of the most respected--with excellent reason--posters that he needs to learn basic economics and basic empathy, and then say you didn't mean for him to take it personally? Who do you think you are fooling? If you have to be rude and condescending as well as ignorant, at least have the guts to own it.

Oh, and you should consider the possibility that readers of your post actually did ponder your so-called points for the microsecond they needed to ponder it, and found it to be garbage, hence their reaction.

Hope you get it now.
Last edited by KLNMurthy on 21 Jan 2017 04:22, edited 1 time in total.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by panduranghari »

sudarshan wrote:I think a lot of the demonetization critics are simply miffed that Modi got away with it. All the doomsday predictions aren't panning out, this silly chai-wala who knows nothing about economics did something, the very thought of which would make the (self-proclaimed) economics experts shudder in horror. And the silly chai-wala simply had luck on his side. Now this un(Harvard)educated chai-wala who got lucky once, thinks he actually knows how a modern economy works!! Imagine the gall!!! Fools rushing in where angels fear to tread, and all that.

Saala baccha ek baar kuch kar diya, aur ab samajta hai ki wohi is economics-weconomics ko janta hai.
What a superb post. Cuts right through the BS. Because most of the crying is about loss of the opportunity costs associated with all the stashed BM.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by KLNMurthy »

By the way, here is a data point in the saga of "inefficient India":

I was required to obtain an Aadhaar card, and went to one of the approved "registrars" (who are licensed private vendors who take your application and input your biometrics) in my locality.

It was a crowded scene in a very cramped premises, looked chaotic. One guy with a Windows 7 system processing Aadhaar card applications and requests for changes, charging Rs. 100 per customer. He took my application, gave me an estimated time when I would get my turn to be processed. I returned at the appointed time, had to wait an additional 20 minutes or so, and finally it was my turn. It was slow going, as he had to reboot Windows 7 numerous times when it would fail to recognize the iris-scan device, but eventually got it done, gave me a timestamped receipt, explained how to check my application status online, and told me it would probably take about 20 working days for the Aadhaar to be ready.

I got a text two days after that telling me that the Aadhaar is ready; downloaded it, and sent it off to the entities that demanded it. Done.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by panduranghari »

https://en.eurobilltracker.com/hits/

Would be interesting if there was something similar in India.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Dasari »

The slow grinding work of chasing the black money hoarders has started while the currency circulation is back to normal in most places.

http://m.timesofindia.com/india/under-i ... 697084.cms
NEW DELHI: The intense pressure mounted by the income tax department post-demonetisation has prompted several of those under scrutiny to opt for the Pradhan Mantri Garib Kalyan Yojana (PMGKY).
The government had unveiled the PMGKY to offer a "last" opportunity to holders of unaccounted-for wealth to come clean. The scheme will be available up to March 31. Those who declare unaccounted-for cash under the scheme will be levied a charge of 50% (30% tax, 33% surcharge and 10% penalty). A declarant will also have to deposit 25% of the undisclosed income in the PMGK deposit scheme.

Over the past two days, the Pune investigation directorate conducted surveys and searches on 37 jewellers in 16 cities across Maharashtra and detected serious irregularities. Sources in the tax department said several of those who had come under scrutiny are believed to have opted for the tax amnesty scheme.

Since demonetisation, the I-T department has stepped up pressure to ensure that black money holders do not go scot free. Several search and survey operations carried out across the country have revealed large-scale irregularities. Investigations by the I-T authorities in Hyde-rabad have shown that those facing the heat from the tax department may prefer to opt for the PMGKY, sources said.

A prominent jeweller had deposited cash exceeding Rs 100 crore in the old Rs 500 and Rs 1,000 notes. Tax department sources said that he identified the source of cash as advances from customers who purchased jewellery on the night of November 8. Tax officials found the claims to be wrong and the matter was referred to the ED and some of the accused were arrested. Similarly, a doctor's bank account showed a cash deposit of Rs 11.50 crore, and he admitted that the cash was from unexplained sources. The department has seized the balance of Rs 7.5 crore, sources said
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Marten »

KLNMurthy wrote:By the way, here is a data point in the saga of "inefficient India":

I was required to obtain an Aadhaar card, and went to one of the approved "registrars" (who are licensed private vendors who take your application and input your biometrics) in my locality.

It was a crowded scene in a very cramped premises, looked chaotic. One guy with a Windows 7 system processing Aadhaar card applications and requests for changes, charging Rs. 100 per customer. He took my application, gave me an estimated time when I would get my turn to be processed. I returned at the appointed time, had to wait an additional 20 minutes or so, and finally it was my turn. It was slow going, as he had to reboot Windows 7 numerous times when it would fail to recognize the iris-scan device, but eventually got it done, gave me a timestamped receipt, explained how to check my application status online, and told me it would probably take about 20 working days for the Aadhaar to be ready.

I got a text two days after that telling me that the Aadhaar is ready; downloaded it, and sent it off to the entities that demanded it. Done.
The vendor is not supposed to charge you. Could you please share the name and location of the registrar?
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Hari Seldon »

Image
KLNMurthy
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Re: Currency Demonetisation and Future course of Indian Economy

Post by KLNMurthy »

Marten wrote:
KLNMurthy wrote:By the way, here is a data point in the saga of "inefficient India":

I was required to obtain an Aadhaar card, and went to one of the approved "registrars" (who are licensed private vendors who take your application and input your biometrics) in my locality.

It was a crowded scene in a very cramped premises, looked chaotic. One guy with a Windows 7 system processing Aadhaar card applications and requests for changes, charging Rs. 100 per customer. He took my application, gave me an estimated time when I would get my turn to be processed. I returned at the appointed time, had to wait an additional 20 minutes or so, and finally it was my turn. It was slow going, as he had to reboot Windows 7 numerous times when it would fail to recognize the iris-scan device, but eventually got it done, gave me a timestamped receipt, explained how to check my application status online, and told me it would probably take about 20 working days for the Aadhaar to be ready.

I got a text two days after that telling me that the Aadhaar is ready; downloaded it, and sent it off to the entities that demanded it. Done.
The vendor is not supposed to charge you. Could you please share the name and location of the registrar?
Did not know that. He was collecting Rs.100 from everyone, so I assumed it was the allowed processing fees. (I was also charged Rs. 160 for a PAN card but that was a different location).

Here is the vendor's info, and the site where I found it:

https://aadharcarduid.com/aadhaar-card- ... ngana_8935

H No 1-9-18/B/4, Ramnagar X Roads, Opp New Delhi Mathaiwala, Musherabad, Musheerabad
Musheerabad, Hyderabad, Telangana - 500020 Map
Permanent Center
Opened On 04-Jul-2015
a bhanu satya kumar kumar
9247424342
Suraj
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

Your assets not hidden from our gaze: I-T dept tells black money holders
Warning black money holders that their undisclosed assets are "not hidden" from its gaze, the Income Tax department Sunday advised them to avail the ongoing one-time disclosure window--PMGKY-- to come clean on their stashed funds.

In advertisements released in leading national dailies, the department also published the salient features of the Pradhan Mantri Garib Kalyan Yojna (PMGKY), 2016 which was announced by the government post demonetisation in November last year.

"Your undisclosed accounts or cash deposits are not hidden from us.

"Helping the less fortunate can help you. Invest your undisclosed income in the PMGKY and accelerate the socio- economic growth of the deprived," the department said in the advertisement which displayed pictures of banned Rs 500/1000 notes.

It cautioned that "non-declaration of such undisclosed income will be liable to tax, surcharge and cess at the rate of 77.25 per cent along with penalty and prosecution."
Govt analyses cash deposits in last 10 days of demonetisation
Expanding scrutiny of suspicious transactions post demonetisation, the government has begun analysing deposits in new accounts and loan repayments as well as transfers to e-wallets and advance remittance for imports during the last 10 days of deadline to turn in junked notes.

After analysing cash deposits made in bank and post office accounts during the 50-day window provided to get rid of the junked 500 and 1,000 rupee notes, authorities are now examining term deposit and loan accounts that were opened after November 8 demonetisation decision.

"Income Tax Department is already taking actions in cases where cash deposits above Rs 50,000 have been made without quoting of PAN.

"The Income Tax Department is using tools and its sources to identify each of these persons and is confident that there would be a big expansion in the tax base and a quantum jump in direct tax collection," a senior government official said.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Gus »

http://www.dnaindia.com/india/report-de ... ky-2294567
The Income Tax department has received confirmations for over Rs 300 crore declarations from across the country till now as part of the ongoing black money window called the Pradhan Mantri Garib Kalyan Yojna (PMGKY), brought out by the government post demonetization.

The report added that a prominent jeweller in Hyderabad has also approached the department to declare alleged black funds to the tune of Rs 100 crore after his claim of getting "advance money from over 5,200 customers on the night of November 8 last year was found wrong" post I-T probe and the local police and the Enforcement Directorate went on to register criminal cases under their respective laws in this instance.

A doctor in a western state is also understood to have approached the taxman to declare Rs 11.50 crore of stash funds, it said adding in an another case involving the same professional declarations worth Rs 7 crore are being made after the department nabbed the 'benami' owner of the black money as one taxi driver and later confronted him with the man whose money it was.

A film producer based in Mumbai, it said, is also understood to have come forward to declare Rs 40 crore unaccounted income under the PMGKY which provides immunity from severe penalties and imprisonment under tax laws.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Gus »

http://www.dnaindia.com/money/report-rb ... on-2294591
(RBI) has said it still does not know the "exact number" of junked currency notes that were in circulation and it is still "reconciling" the number of notes that were deposited back. In a written submission to Parliament's Public Accounts Committee (PAC), the central bank said: "The exact number of Specified Bank Notes (SBNs) withdrawn from circulation is being worked out."
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Sachin »

Gus wrote:(RBI) has said it still does not know the "exact number" of junked currency notes that were in circulation and it is still "reconciling" the number of notes that were deposited back.
A bit surprised on the bolded part. Is RBI saying that it does not even have records on how much notes it has printed so far, in various denominations?? So was RBI printing notes, like how bakeries make sliced breads??
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Gus »

not sure why they are now saying 15.5 or whatever is also not a concrete number...this gives credence to the theories of illegal/off the books printing of notes.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Dilbu »

There is a difference between the value of notes printed and the number of notes printed. Looks like RBI is saying that it doesn't have the count of notes at this moment. Something is not adding up.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by A_Gupta »

Dilbu wrote:There is a difference between the value of notes printed and the number of notes printed. Looks like RBI is saying that it doesn't have the count of notes at this moment. Something is not adding up.
Most likely the Dork media. The only direct quote from the RBI is: "The exact number of Specified Bank Notes (SBNs) withdrawn from circulation is being worked out."
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Re: Currency Demonetisation and Future course of Indian Economy

Post by habal »

Suraj wrote:Your assets not hidden from our gaze: I-T dept tells black money holders
Warning black money holders that their undisclosed assets are "not hidden" from its gaze, the Income Tax department Sunday advised them to avail the ongoing one-time disclosure window--PMGKY-- to come clean on their stashed funds.

In advertisements released in leading national dailies, the department also published the salient features of the Pradhan Mantri Garib Kalyan Yojna (PMGKY), 2016 which was announced by the government post demonetisation in November last year.

"Your undisclosed accounts or cash deposits are not hidden from us.

"Helping the less fortunate can help you. Invest your undisclosed income in the PMGKY and accelerate the socio- economic growth of the deprived," the department said in the advertisement which displayed pictures of banned Rs 500/1000 notes.

It cautioned that "non-declaration of such undisclosed income will be liable to tax, surcharge and cess at the rate of 77.25 per cent along with penalty and prosecution."
Govt analyses cash deposits in last 10 days of demonetisation
Expanding scrutiny of suspicious transactions post demonetisation, the government has begun analysing deposits in new accounts and loan repayments as well as transfers to e-wallets and advance remittance for imports during the last 10 days of deadline to turn in junked notes.

After analysing cash deposits made in bank and post office accounts during the 50-day window provided to get rid of the junked 500 and 1,000 rupee notes, authorities are now examining term deposit and loan accounts that were opened after November 8 demonetisation decision.

"Income Tax Department is already taking actions in cases where cash deposits above Rs 50,000 have been made without quoting of PAN.

"The Income Tax Department is using tools and its sources to identify each of these persons and is confident that there would be a big expansion in the tax base and a quantum jump in direct tax collection," a senior government official said.
what about black money & bribe money of Income Tax and Sales Tax babus, are these 'hidden' or 'exposed' to their gaze ? Was speaking to a few local traders this week and all of them said, they did their accounts through a third-party accountant (not CA mind) and these guys pass on the 'cuts' to Sales Tax for total trade volume. Each and every one of these traders does this. Oherwise they harass the traders endlessly and frame false charges. Since VAT these days is computerized in most states, the dept knows about each & every traders revenue online.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by KLNMurthy »

Sachin wrote:
Gus wrote:(RBI) has said it still does not know the "exact number" of junked currency notes that were in circulation and it is still "reconciling" the number of notes that were deposited back.
A bit surprised on the bolded part. Is RBI saying that it does not even have records on how much notes it has printed so far, in various denominations?? So was RBI printing notes, like how bakeries make sliced breads??
Might make sense if you add a "still".

I am sure RBI knows how many old notes it printed. They are, I guess, still counting how many old notes have come back to the banks. Once that is done, they will be able to tell how many notes are still out there.

Seems reasonable to me.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

Sachin wrote:
Gus wrote:(RBI) has said it still does not know the "exact number" of junked currency notes that were in circulation and it is still "reconciling" the number of notes that were deposited back.
A bit surprised on the bolded part. Is RBI saying that it does not even have records on how much notes it has printed so far, in various denominations?? So was RBI printing notes, like how bakeries make sliced breads??
The article says RBI doesn't know how much was undeposited, because it needs to physically get back all the notes, and ~Rs.18 lakh crore is a physically large volume of paper, even in 500s and 1000s . One crore in Rs.1000 notes is a stack of a minimum 1.5 metres high. In 500s its twice as much. Now 18 lakh crores in a mix of the two is a huge volume. RBI cannot be expected to have counting and electronic serial number tallying facilities to count so much volume in a short time. This is a huge action for which facilities aren't scaled for, and therefore it takes time.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by UlanBatori »

Ask the RBI the exact number of employees they have.
Better, ask NDTV or The Hindu how many employees they have.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by SaiK »

kangrez also printed triple and quadruple notes on the name number sequences. all coming from the same print source. deep networked b*turds will never let it go candid to expose themselves
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Re: Currency Demonetisation and Future course of Indian Economy

Post by A_Gupta »

Actually when one finds out how the RBI's currency chests work, it is then surprising they don't have a reliable estimate of how much currency was withdrawn from circulation. It might mean that some currency chests are compromised.

PS: a dated article

http://fletcher.tufts.edu/~/media/Fletc ... %20Roy.pdf

Maybe there are delays in the system.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by A_Gupta »

Also appears to be valid info about currency chests:

What is currency chest? by Viswaraj Br https://www.quora.com/What-is-currency- ... e=2fba0704
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Dipanker »

I read somewhere that RBI has 20 counting machine and if all of them are operated 12 hours a day 7 days a week then it will take RBI 2 years to count the ~15 lakh crore worth returned notes.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by putnanja »

Niti Aayog brings in Big Data big gun to track fraud in Jan Dhan accounts

Suspicious bank deposits first in Income Tax’s probe queue
The income-tax department has begun raising queries with regard to what it thinks are suspicious bank deposits, including those made in cooperative banks, said tax officials and consultants with direct knowledge of the matter.

The move is part of the government’s crackdown on money laundering in the wake of demonetisation. “In the first round, the tax department is focusing on those bank accounts that do not have proper KYC (know your customer) credentials or cash deposits do not correspond with the individual’s income,” said one of them. ETreported on January 19 that the I-T department was looking to question cash deposits exceeding Rs 10 lakh.

About 1.5 lakh accountholders have deposited more than Rs 10 lakh each and there have been suspicious cash deposits in one crore accounts belonging to 75 lakh people, ET said.
...
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Re: Currency Demonetisation and Future course of Indian Economy

Post by venkat_r »

Which ever way we look at it, somehow it does not give a good feeling that the govt put all its citizens through all this to remove 400 crores of fake notes or just to remove 6% of black money. Unless I see something more concrete I would assume that this was a political move by Modi for the elections or was mislead by someone into believing that this will remove black money.

Modi had to spend quite a bit of political capital on this, and by the time the truth comes out, hopefully the govt can come up with some schemes to decrease BM or to encourage people to not have BM. Antagonizing people might not be the best way forward. For now the feeling among common man is that it is done to remove black money, but the truth will eventually come out. All the talk about digital economy is pure BS, which ironically is not only not caught by the generals here, but few even push that theory.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Subdas »

The real impact of this demon is the limit on cash withdrawal and the source of the cash deposits. The first one will break illegal and corrupt large business. The second one will increase the tax collection from corrupt business. Black business will be forced to either shutdown or come into main stream. This was the intent.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by darshan »

Rules and regulations definitely need to be brought to the better standards. Branch banking BS and PSU arrogance need to be put in place for sure. For example, one of my family members ran into in past two months: going through old papers upon returning to India after 10+ years, noticed that there is a bank account that was not closed that NRI can't have. So being a law abiding person, heads down to PSU bank to close account with paltry sum in it and the pain ensues for days. We could not figure out what the run around given for more than three weeks was about; whether it was a hint to grease some palms or the belittling customer is their actual job description or that is how psychos get off at PSUs. No wonder many people avoid gov't workers in general. Not exactly their fault that they choose to be outside the system. I suggest Modi to go through each PSU's various rules and regulations and feel the pain before dreaming too high. May be Modi should find out how many times some idiot behind the desk makes you sign something by saying that the signature on the record does not match while that person has gazillion other items to verify identity. At that time you wonder where to spend your money, to bribe the guy so he suddenly matches the signatures or pay someone to put him in hospital.

In India there are probably as many gov't and workers and PSU workers accepting bribes as there are private folks keeping BM. The final outcome of convictions should reflect that or this can be just simply be described as money grab if only private folks are loosing money and gov't workers are walking away without any trouble.

I wonder how many BM fishes would escape out of TN with all rioting there. Wasn't TN one of the top state with coop bank money?
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Re: Currency Demonetisation and Future course of Indian Economy

Post by SriKumar »

KLNMurthy wrote:They are, I guess, still counting how many old notes have come back to the banks. Once that is done, they will be able to tell how many notes are still out there.
I am assuming that the number of old notes were already counted by the cashiers when they exchanged the old notes for new. Each cashier would have had a daily tally of how may old notes came in, for each denomination. I assume that they have to 'only' sum up the numbers at the end of the day, in each branch and add them all. I assume this would have already been done. Perhaps they are just re-checking their numbers? Or perhaps they have detected counterfeit notes in the old notes they accepted?
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Suraj »

SriKumar wrote:
KLNMurthy wrote:They are, I guess, still counting how many old notes have come back to the banks. Once that is done, they will be able to tell how many notes are still out there.
I am assuming that the number of old notes were already counted by the cashiers when they exchanged the old notes for new. Each cashier would have had a daily tally of how may old notes came in, for each denomination. I assume that they have to 'only' sum up the numbers at the end of the day, in each branch and add them all. I assume this would have already been done. Perhaps they are just re-checking their numbers? Or perhaps they have detected counterfeit notes in the old notes they accepted?
RBI needs to reconcile face value and serial number for each note. It's more than simply counting up a total at a bank branch. A lack of long prior record of deposit history on a series of notes will suggest that these notes were primarily serving the black economy.

Lets say there were 15 lakh crore in 500s and 1000s out there, 60% by value being 500s and the rest 1000s. That's 18 billion Rs.500 notes and 6 billion Rs.1000 notes. Manually stacking and organizing at the recepient bank, then later electronically tabulating the notes at RBI once received, is a significant exercise. A bundle (100 notes or Rs.1 lakh in 1000s) is approx 1.5cm . A is 1.5m high stack On top of this, just transporting that many notes from all around the country is an enormous undertaking, while also simultaneously using the same facilities to record and track the newly issued notes, whose total value adds up to ~9 lakh crore. Further, a finite number of notes are fake, and need to be traced back to the depositor.

All in all, if you add up the number of notes involved, the tasks, the manual processing component and compute the total time, the numbers are just very large.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by disha »

darshan wrote:RI suggest Modi to go through each PSU's various rules and regulations and feel the pain before dreaming too high. May be Modi should find out how many times some idiot behind the desk makes you sign something by saying that the signature on the record does not match while that person has gazillion other items to verify identity. At that time you wonder where to spend your money, to bribe the guy so he suddenly matches the signatures or pay someone to put him in hospital.
Modi knows this and hence he came up with the concept of self-attestation.

Also he was the one who forced the Public Sector banks to adapt Jan Dhan. Bank officials and unions actually gave quite a push back on Jan Dhan., and he pointed out that for this many years you did not serve your purpose, now is the time for public sector banks to serve the purpose for which they were nationalized.

So yes PSU banks have a long way to go and improve their services., so does Pvt banks. Case in point my 75 year old dad was moving towns and he was given a run around - for updating his bank account with new address. He had everything, his passport, his utility bills at the new address etc - and it was his own account and now the person at the bank insisted that he see the rental agreement. How pathetic. It is his account, he was authenticated and hence authorized to do the necessary changes. But the person at the bank just wanted to prove that he is the boss and knows better.

There should be a 'service' bonus for each bank branch. If their service rating out of 10 falls below average, they should be docked. If they have a better service rating, they will get rewarded.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by asgkhan »

Banks should be ashamed of their conduct. Dad went to canara bank to withdraw money. He was shooed off by the manager saying funds were not available. There is a clerk whom my dad knows. Inside info is, lot of hanky panky going behind the scenes.

Branch managers are indulging in diverting currency notes of 100s and 500s to their favored contacts and creating a artificial shortage of liquidity.

Jetli is the weakest link. This baboon must be thrown off a cliff all nanga to a bed of pus covered spikes.

He has no clue on how to address the liquidity crises and shortage of 500s and 100s. ATMS are still spitting out 2k.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by SaraLax »

My wife was working until 2012 and after that she is an house wife and managing our daughters at home. So she has no taxable income since then. But i do gift her a portion of my salary every month and most of it goes to RD, Shares & MFs (through a demat account) owned by her. I am happy to share the info here that recently my wife got an e-mail based notice from Income Tax department as to why she has not filed her IT Returns for FY 2015-2016 ! and asked her to submit an IT Compliance for the same. So it seems the IT department is indeed running behind people (post demonetisation) and querying them for Why-NO-IT-Returns-Filed-in-2016-? !.

Whatever Savings bank interest or RD interest the money-gift of mine earns in her Savings Bank account - is paid tax by me under the "Other Income" category yearly at my own IT rate. We mostly only invest in shares/IPOs for the long term and there is absolutely no selling of shares or even trading of MFs for last 2 to 3 years. So my wife had no taxable income in hand to show or even file a dummy IT Return for. The IT department website has the option to indicate things such as 'no taxable income' under various heads of 'selling of shares', 'TDS - Other Returns' (Saving Bank interest amounts > 10K INR) and etc. We neatly filled them up on the IT website and submitted it electronically.

By the way - here in Chennai, I was able to easily get 24K INR in cash (2K notes + 100 notes) from my local bank and i didn't have to wait for more than 5 minutes - during this process. I took out this amount last week at around 11.30 AM in the morning and i faced no hassles.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by SaraLax »

Dipanker wrote:I read somewhere that RBI has 20 counting machine and if all of them are operated 12 hours a day 7 days a week then it will take RBI 2 years to count the ~15 lakh crore worth returned notes.
Why even indulging in posting the above crap and you want us to believe this "i read somewhere" stuff ?.
Do you think many of us people in this forum are wet-behind-the-ears type folks ?.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Pratyush »

Why assume that the RBI will count all the notes. Why would it not rely on the figures shared by all the bank's.
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