Currency Demonetisation and Future course of Indian Economy

hanumadu · Post by **hanumadu** » 09 Nov 2016 19:16

Priyanka RP
‏@ThePriR
Breaking news: A bag full of 500 & 1000 #currency notes was found dumped in a dustbin near DNS Bank, Titwala!

panduranghari · Post by **panduranghari** » 09 Nov 2016 19:17

This move establishes the primacy of gold as the ultimate mobile easily accessible saving medium for ALL.

It screwes Raghuram Rajan's i.e IMF gold monetisation plan to get Indian gold permanently.

It permits the GOI to recapitalise the banks with massive NPAs without increased inflationary pressure.

Future elections cannot be bought by any politician.

Anil Bokil's Arthakranti proposal is finding national traction. Hopefully, International traction eventually.

Modi ji puts black swans to shame.

Zynda · Post by **Zynda** » 09 Nov 2016 19:21

I heard on a Kannada radio station this morning that the new 2000 INR note (not sure about 500 INR denomination) will have a nano-GPS chip installed in it. Apparently, RBI will be able to monitor its location history...if the note has spent inordinate amount of time at any place except bank, it will raise red flags i.e. it was used as black. Apparently, RBI can and will track circulation of 2000 note, which to me tells that its issue will be limited. As such, having even a 500 note is PITA...so 2000 INR may be used only during large sum transactions. Anyways, I think GoI would have thought through about possible avenues folks will try to continue to hoard money in near future using the newer denominations and have ways to counter it. I think its a bold & commendable move.

Sid · Post by **Sid** » 09 Nov 2016 19:32

Is this NGC (nano-GPS chip) on 2000 INR is a confirmed news or just a hoax?

pankajs · Post by **pankajs** » 09 Nov 2016 19:32

Bhailog did RBI talk about *nano-GPS*? It is simple to run it through chacha the keeper of all records.

kumarn · Post by **kumarn** » 09 Nov 2016 19:33

Hoax. Jetli laughed it off in his press conference.

Rishi Verma · Post by **Rishi Verma** » 09 Nov 2016 20:01

Modi is a believer in leapfrog technologies. I am sure they have FICN detectors to scan ALL deposites at bank branches, the deposit may only be concluded at the end of verification.

The sheer logistics to give the order to thousands of bank branches + ATM to remain shut today on a short notice and in total secrecy is amazing. Not one bank manager tweeted that "something happening".

I think bank closure order was issued few minutes before the branches closed then he went on TV at 8pm.

His trusted aide Mr. Hasmukh Adhia, revenue secretary, has a bigger role in all this than most realize.

Interesting background Hasmukh Adhia

Zynda · Post by **Zynda** » 09 Nov 2016 20:02

Apparently, RBI has confirmed that there will be NO chips on INR 2000 notes. What is the use of this newer larger denomination? For people who want to hoard stack of bills, they need less number of it with 2000 denomination

Edit: Forgot to include NO in my original post. Sorry for the confusion.

pankajs · Post by **pankajs** » 09 Nov 2016 20:07

Don't know where you searched but here is some news

http://gadgets.ndtv.com/social-networki ... topstories
2000 Rupees Note NGC Rumour: There's No Nano GPS Chip

We treated these forwards with a healthy doubt of scepticism, and with RBI having released many details of the 2000 rupees note and the so-called nano GPS chip finding no mention therein, it's safe to say that those forwards are a hoax.

Perhaps you could link any press release by RBI or a news report.

Rishi Verma · Post by **Rishi Verma** » 09 Nov 2016 20:14

With all this modi suddenly found cash to pay for Rafale, F-xteen, S-400, Another Chakra, and other items without a scratch on the economy.

Vikas · Post by **Vikas** » 09 Nov 2016 20:24

All said and done, Most of us have been inconvenienced by GoI and asked to suffer again in the name of sacrificing for country.
Look at the ordinary folks stuck in the middle of this marriage season while the ruling elite still gets to enjoy the perks of the power and money with no inconvenience.

hanumadu · Post by **hanumadu** » 09 Nov 2016 20:26

Happening just as I told, but slightly different. Much more brazen. May be its not black money. May be its a false flag operation.
How dumb can they be? This is open admission of black money and an invitation for the tax man.

Lutyensclub ‏@Keefarqpaindha 2h2 hours ago
@PMOIndia In Kolar MLAs giving loan 3 lakhs per head as loan.Not good work these notes to be exchanged in banks by borrowers

nirav · Post by **nirav** » 09 Nov 2016 20:28

err, ruling elite too wont be able too effectively use their cash on hand .. just like mango people.

this is getting a little ridiculous. GoI making us "inconvenienced" and suffer .. Its not compulsory conscription where youth have been dragged out of their homes and sent to the borders ..

It saddens me to hear this line of thought, want GoI to fix any and everything overnight, but if a little personal inconvenience comes along the way, all hell breaks loose !

nirav · Post by **nirav** » 09 Nov 2016 20:31

the embedded GPS forwards is a rumour that must be spread as much as we can.I dont see any harm from it.
On the contrary, a lot of unsuspecting people will fall for it and just might avoid stashing cash in fear of a satellite tracking it

Useful rumour

MohdKav · Post by **MohdKav** » 09 Nov 2016 20:34

The biggest loosers are islamics, who runs a complete parallel economy

pankajs · Post by **pankajs** » 09 Nov 2016 20:39

That way even the Ivans will be impacted if the payment goes digital and they will have nowhere to hide the funds that they smuggle from abroad for *charity* works.

Sicanta · Post by **Sicanta** » 09 Nov 2016 20:44

VikasRaina wrote:All said and done, Most of us have been inconvenienced by GoI and asked to suffer again in the name of sacrificing for country.
Look at the ordinary folks stuck in the middle of this marriage season while the ruling elite still gets to enjoy the perks of the power and money with no inconvenience.

No one who has nothing to hide is going to be inconvenienced. You have multiple payment options for large sums, all very efficient. As for small ones like caterers and all, you always have paytm or better yet - UPI. You can use it to transact as low as rs 10 to as high as 1 lakh. plus you need not remember acc details. You need to know unique id which may be mobile number or email address.

hanumadu · Post by **hanumadu** » 09 Nov 2016 20:47

VikasRaina wrote:All said and done, Most of us have been inconvenienced by GoI and asked to suffer again in the name of sacrificing for country.
Look at the ordinary folks stuck in the middle of this marriage season while the ruling elite still gets to enjoy the perks of the power and money with no inconvenience.

Not much of an inconvenience. And even those who are inconvenienced are only too happy to oblige as they recognize the scope of this.

Raveen · Post by **Raveen** » 09 Nov 2016 20:49

VikasRaina wrote:All said and done, Most of us have been inconvenienced by GoI and asked to suffer again in the name of sacrificing for country.
Look at the ordinary folks stuck in the middle of this marriage season while the ruling elite still gets to enjoy the perks of the power and money with no inconvenience.

Seriously? Dude get over yourself - write a damn check

pankajs · Post by **pankajs** » 09 Nov 2016 20:49

Banks will be open this weekend for currency exchange withing limits. The limit will be increased after about 15 days once the ATM operations are stabilized. For most that will be the end of adjustment. Two months down the line things will be back to normal for 98% of the population.

Where is the issue? We can't bear a week or two of disruption? And we all want to change the system for the better?

saip · Post by **saip** » 09 Nov 2016 20:52

Zynda wrote:Apparently, RBI has confirmed that there will be chips on INR 2000 notes. What is the use of this newer larger denomination? For people who want to hoard stack of bills, they need less number of it with 2000 denomination

You might have heard of 'Solutions for which no problem exists'. Here is mine and I am going to patent it. If you place your notes in my device the NGC (nano-GPS) chip will not be activated. I will guarantee it or I will pay you Rs100,000/- in old 500 and 1000 rupee notes.

Zynda · Post by **Zynda** » 09 Nov 2016 20:56

^^Sorry saar. I've corrected my post. There will be no chips in 2000 notes. My question about the use of new 2000 note still remains though.

JayS · Post by **JayS** » 09 Nov 2016 21:00

VikasRaina wrote:All said and done, Most of us have been inconvenienced by GoI and asked to suffer again in the name of sacrificing for country.
Look at the ordinary folks stuck in the middle of this marriage season while the ruling elite still gets to enjoy the perks of the power and money with no inconvenience.

Inconvenience Regretted.

Sridhar K · Post by **Sridhar K** » 09 Nov 2016 21:05

One of my friends works for a real estate company owned by a benami of a famous politician. His boss has notified all his staff about Rs 75 Cr in cash that needs to be converted to white. He will distribute this as loan to employees who will help them in converting to white. If this is what he is disclosing to employees, imagine the actual worth.

yensoy · Post by **yensoy** » 09 Nov 2016 21:12

Zynda wrote:^^Sorry saar. I've corrected my post. There will be no chips in 2000 notes. My question about the use of new 2000 note still remains though.

I had posted this earlier. My theory is that if RBI was printing 500s or 1000s, and if the photos leaked out, someone would put two and two together and conclude that demonetization was imminent. Sure enough, photos of 2000s did leak out and with such a big operation it's to be expected. But instead of demonetization, the leaked photos led to the government/RBI being criticized roundly as a sell-out to corruption.

This was the ultimate diversionary tactic, surgical strike all over again.

Now that 2000s are going to be used in the initial exchange, their useful life is more or less over. In the future there will be a lot more 500s, and maybe even 1000s (although RBI has denied that denomination). My guess is that over time RBI will withdraw 2000s from circulation - not a demonetization but regular withdrawal as it does for old series notes.

yensoy · Post by **yensoy** » 09 Nov 2016 21:16

Sridhar K wrote:One of my friends works for a real estate company owned by a benami of a famous politician. His boss has notified all his staff about Rs 75 Cr in cash that needs to be converted to white. He will distribute this as loan to employees who will help them in converting to white. If this is what he is disclosing to employees, imagine the actual worth.

And what's in it for them? Is he discounting it by 50%? How many staff? If say 75 and each takes 1Cr to bank; how long will they need to withdraw that in new notes? I am certain new currency notes will be issued much more carefully and with more scrutiny (even after the first week). If they can pull our 1 lakh every month, that is a 10 year loan. During that time if the politician loses power they can stop paying back

Sid · Post by **Sid** » 09 Nov 2016 21:19

Looks like an open season for loan sharks, this may hurt a lot of poor people like farmers/uneducated people. These people are trying to offload lot of this garbage money into the hands of these folks in the form loan.

JohnTitor · Post by **JohnTitor** » 09 Nov 2016 21:19

Sridhar K wrote:One of my friends works for a real estate company owned by a benami of a famous politician. His boss has notified all his staff about Rs 75 Cr in cash that needs to be converted to white. He will distribute this as loan to employees who will help them in converting to white. If this is what he is disclosing to employees, imagine the actual worth.

For real? If that's the case, what is the repercussion? How much of this illegal money will be destroyed?

pankajs · Post by **pankajs** » 09 Nov 2016 21:21

The latest is that IT is watching for any large deposits. It will then match that with the IT returns of that person. So Politico lending to his cleaner who has not filed any tax return will only invite scrutiny.

Sicanta · Post by **Sicanta** » 09 Nov 2016 21:23

yensoy wrote:
Sridhar K wrote:One of my friends works for a real estate company owned by a benami of a famous politician. His boss has notified all his staff about Rs 75 Cr in cash that needs to be converted to white. He will distribute this as loan to employees who will help them in converting to white. If this is what he is disclosing to employees, imagine the actual worth.
And what's in it for them? Is he discounting it by 50%? How many staff? If say 75 and each takes 1Cr to bank; how long will they need to withdraw that in new notes? I am certain new currency notes will be issued much more carefully and with more scrutiny (even after the first week). If they can pull our 1 lakh every month, that is a 10 year loan. During that time if the politician loses power they can stop paying back

Will IT not ask questions about where they got this large sum of money, suddenly depositing 10-15 times the usual in their deposits?

pankajs · Post by **pankajs** » 09 Nov 2016 21:26

The *normal* deposit period is up to December i,e give or take 8 weeks. The IT dept. will check each and every deposit in this period. ALL deposits above 50,000 will require PAN. Now EVERY deposit gets reported to the RBI.

Does anyone think this was implemented without any thought?

JohnTitor · Post by **JohnTitor** » 09 Nov 2016 21:30

^^ but if they divide the amount to a large enough group, can it not be done?

Playing devils advocate here, not trolling.

Sicanta · Post by **Sicanta** » 09 Nov 2016 21:33

JohnTitor wrote:^^ but if they divide the amount to a large enough group, can it not be done?

Playing devils advocate here, not trolling.

Will everyone in that large group be dependable and be accounted for during the long period it will take the financier to get his money back? It will be one hell of a book keeping job.

And this when you can actually arrange for such a large group onshort notice.

Viv S · Post by **Viv S** » 09 Nov 2016 21:33

Sicanta wrote:No one who has nothing to hide is going to be inconvenienced.

Of course it will. The implementation could have been somewhat better though that would need to be weighed against the secrecy factor.

For example, right now I've barely got any cash on me (in 100s, I mean). Foolishly let my card expire (replacement will be arriving in a week or so). Local ATMs are bone dry. Banks will only be able to give out cash tomorrow, and the lines to take out just Rs 10,000 out will be extensive. Also while Rs 20K for the week is fine for regular expenses, its too little to cater for contingencies (tatkal counters will function during fixed working hours). Got an aunt going out-of-station (long train trip) tomorrow but with only Rs 200-300 available, we're a bit worried. Fortunately, we're well stocked on groceries/essentials, but others may not be.

None of this changes the fact that the demonetization strike was essential, but at the same time, to deny or dismiss the short term impact on the public, is akin to denying reality.

srin · Post by **srin** » 09 Nov 2016 21:34

I seriously can't figure out this "nano gps chip" business and why ppl even remotely think it was plausible. You can demolish it within a minute: Let's just say that the GoI indeed put a GPS chip, so what ? What will power it ? Also, let's assume that it can lock on to 4 satellites - through the wallet inside the pocket and inside the house, and can indeed get a fix. Then what ? Will it also have a transmitter ? And who will it transmit to ?

One would have thought ppl are going to figure out that this rumour is an obvious non-sense ...

pankajs · Post by **pankajs** » 09 Nov 2016 21:38

75 cr / 50 k = 15,000 i.e One 50,000 deposit per person will need to recruit 15k folks.

Say 5 deposit per person = 5 x 50,000 = 2.5 lakhs per person will need 3k folks.

By the time 2.5 lakhs get into a drivers/clerk/worker account within 2 months especially if such person does not have the history, Reg flags will start flashing in RBI and Income tax. Even with that risk the guy will need 3000 persons to cycle through his cash hoard.

nirav · Post by **nirav** » 09 Nov 2016 21:38

pankajs wrote:The *normal* deposit period is up to December i,e give or take 8 weeks. The IT dept. will check each and every deposit in this period. ALL deposits above 50,000 will require PAN. Now EVERY deposit gets reported to the RBI.

Does anyone think this was implemented without any thought?

Salaried PANs would have their employment details and it wont be surprising if CBDT/IT dept has come up with either an algorithm or a method to flag such transactions from a group of individuals working for an organisation.

Its one of the easiest way for folks to siphon off cash, and CBDT/IT dept will be watching.

hanumadu · Post by **hanumadu** » 09 Nov 2016 21:40

Sridhar K wrote:One of my friends works for a real estate company owned by a benami of a famous politician. His boss has notified all his staff about Rs 75 Cr in cash that needs to be converted to white. He will distribute this as loan to employees who will help them in converting to white. If this is what he is disclosing to employees, imagine the actual worth.

Exactly what I had said the politicians would do. But it will not be too difficult to flag all such deposits and go after the source. I am hopeful NaMo will take care of all such cases.

pankajs · Post by **pankajs** » 09 Nov 2016 21:43

Alarm bells are already sounding

http://www.business-standard.com/articl ... 404_1.html
Deposit money in bank only if you can account for it: Tax experts
Penalty for unaccounted income could range from 50% to 200% of evaded tax

If you are one with a hoard of cash in your hand, you should deposit that in banks only if you are able to account for the source of income, says tax experts. Depositing unaccounted money into banks would open up one to scrutiny by the income-tax (I-T) department, though some consultants said it might be worth a chance.

Sridhar K · Post by **Sridhar K** » 09 Nov 2016 21:43

The case I was talking is very real and he has close to 500 employees and several others working on contract. His network is very huge. The employees are on the lower end of the spectrum requiring money for kids education, marriage etc. People are all desperate to salvage whatever possible and not the entire money