Currency Demonetisation and Future course of Indian Economy

GeorgeM · Post by **GeorgeM** » 11 Nov 2016 16:52

yensoy wrote: Taxes wise, boss I file income taxes in 3 large countries and let me assure you that Indian tax rates are the lowest. If you are complaining about Indian IT rates, you have no idea about the world (and please don't compare with islands of prosperity like Dubai or Singapore).

I think the level of corruption in state and local level is much higher than at the central level. But this discussion is not about corruption; that will need other means to fix and from the past actions I believe Modi very much has that as a target.

Saar, please.. I too file taxes in 2 large countries. In the 'other' country, when i visit a restaurant I don't pay nearly 20% in taxes, after i have paid 30% income tax. I dont pay nearly 40% in taxes when I fuel my car. When I buy a car, I dont pay road tax, VAT, tax on tax. I dont need to subsidize someone else through tax because that guy belongs to particular caste/tribe. When I cross inter-state borders with goods, I dont worry about Octroi, Excise (note: use tax is different, it is same as sales tax).
So hope you can see why India is one of the highly taxed countries, also with one of the poorest tax base. Successive govt have done piss-poor to expand it.

Patni · Post by **Patni** » 11 Nov 2016 16:52

Money rush: SBI gets Rs 53,000 crore deposits till midday after note ban

Mumbai: SBI on November 11 said it has received deposits worth Rs 53,000 crore after the government scrapped Rs 500/1,000 notes and has exchanged currency worth about Rs 1,500 crore so far.

"The bank got deposits of Rs 31,000 crore yesterday... Today, till now, the amount of deposit is Rs 22,000 crore ...The business is going well of demonetisation. We have additional counters," SBI Chairperson Arundhati Bhattacharya said while announcing its quarterly result today.

SBI had yesterday replaced about Rs 750 crore worth of notes with the junked ones, while till mid-day today it had exchanged currency amounting to Rs 723 crore.

The bank has been able to press into service only about half of its ATM network nationwide.

"We have also been able to put up 29,000 ATMs and Cash Deposit Machines today. Of these, 21,000 ATMs and rest are CDMs," she said.

People across the country thronged to branches and ATMs across the country to replace their old high value currencies as Prime Minister Narendra Modi on Tuesday night announced withdrawal of 500 and 1,000 rupee notes from circulation in a bid to flush out black money.

Only a maximum of Rs 4,000 per person in cash irrespective of the size of tender was being given per person after submission of valid identity proof. Anything over and above this value was credited to bank account.

Banks set up additional counters to change cash as also allow withdrawal from bank accounts through cheque or withdrawal slips with a ceiling of Rs 10,000 in a day within an overall limit of Rs 20,000 in a week (including withdrawals from ATMs) for the first fortnight i.e. up to November 24.

As made clear by many members, I believe it is clear that only about <10% of old notes being received in currency notes will get swaped with new currency notes and recirculated in economy. Rest is going to be in bank account as credit and banks can and will use it productively.

Chandragupta · Post by **Chandragupta** » 11 Nov 2016 16:54

jagga wrote:I doubt most people here even know how difficult is to run the business in India. They all are going gaga about this step, of course, they get their wages in white. Who cares, about small business and traders who are day and night hounded by IT officials. Some are saying if you do everything by book you have nothing to worry! My advice to them start a business in India, go 100% by book and be a satyavadi Harishchandara and see if you and your family can survive. It's a professional extortion racket run by devils! I am hearing so many families are in deep trouble. All the cash lying in these homes is not profit, it was the necessity to run the business. People who worked hard all their lives are all of sudden seeing destruction of their efforts. For some its matter of life and death!

The same people will then crib on other threads about India not being able to compete with China in manufacturing. While all they can do here is mock and celebrate the bankruptcy of thousands of businesses in India that are run by common people.

Murugan · Post by **Murugan** » 11 Nov 2016 17:09

https://twitter.com/TheOfficialSBI

panduranghari · Post by **panduranghari** » 11 Nov 2016 17:11

MohdKav wrote: Falling asset prices, banks are not ready to give you the valuation you would need to get a LAP at the amount you require , which is usually at 50% of the market value..

Falling asset prices depends completely on the money supply. With money supply contracting, the assets values will reflect new reality. How long will it take? No one knows. Wait and watch as Suraj saar said.
Some lessons are learnt the hard way. I learnt mine in 2008.

MohdKav · Post by **MohdKav** » 11 Nov 2016 17:19

jagga wrote:I doubt most people here even know how difficult is to run the business in India. They all are going gaga about this step, of course, they get their wages in white. Who cares, about small business and traders who are day and night hounded by IT officials. Some are saying if you do everything by book you have nothing to worry! My advice to them start a business in India, go 100% by book and be a satyavadi Harishchandara and see if you and your family can survive. It's a professional extortion racket run by devils! I am hearing so many families are in deep trouble. All the cash lying in these homes is not profit, it was the necessity to run the business. People who worked hard all their lives are all of sudden seeing destruction of their efforts. For some its matter of life and death!

They have no clue, I have to raise money right now and I have inspections coming next year; if I have to remain complaint I need to invest money today. I have to pay salaries, clear debts and also make sure the idiots dont harass me.

Indian Government is a Mafia.
RTE as somebody said much before on this thread, is one great example of the Mafia.

MohdKav · Post by **MohdKav** » 11 Nov 2016 17:21

What people dont know is how many people even borrow money in black and pay their employee's in white. Anyhow all that is not an excuse for continuation of black money. This drug of black money was forced on the throats of ordinary people even the salaried class by the government.

But if the government is going to go the Mad Max/Anarchist route a lot of businesses will close down.

panduranghari · Post by **panduranghari** » 11 Nov 2016 17:22

ShauryaT wrote: What the government has to do is to figure a way to incentivize this money for productive use and not just for benefit of the government or banks et al. How about a scheme to channel this money without penalty unto 1 Crore per person - provided employment is created. How about channeling this money for R&D investment?. .

Greshams law.

MohdKav · Post by **MohdKav** » 11 Nov 2016 17:24

panduranghari wrote:
MohdKav wrote: Falling asset prices, banks are not ready to give you the valuation you would need to get a LAP at the amount you require , which is usually at 50% of the market value..
Falling asset prices depends completely on the money supply. With money supply contracting, the assets values will reflect new reality. How long will it take? No one knows. Wait and watch as Suraj saar said.
Some lessons are learnt the hard way. I learnt mine in 2008.

There is a lot of money coming into the Banking system.
If the money supply is not replaced by legitimate sources , anarchy will prevail. Businesses will close down, People will go out of jobs. Will the government allow such a crash to happen?

The government just burned 30 percent of the economy, fair enough. if it doesnt replace it with atleast 10 percent, people wont take it too kindly.

Bart S · Post by **Bart S** » 11 Nov 2016 17:27

jagga wrote:I doubt most people here even know how difficult is to run the business in India. They all are going gaga about this step, of course, they get their wages in white. Who cares, about small business and traders who are day and night hounded by IT officials. Some are saying if you do everything by book you have nothing to worry! My advice to them start a business in India, go 100% by book and be a satyavadi Harishchandara and see if you and your family can survive. It's a professional extortion racket run by devils! I am hearing so many families are in deep trouble. All the cash lying in these homes is not profit, it was the necessity to run the business. People who worked hard all their lives are all of sudden seeing destruction of their efforts. For some its matter of life and death!

Oh please, stop playing the victim. Corruption is equally the responsibility of those who pay the bribes and not just the ones demanding it. Perhaps with no black money to go around people will finally stand up and ask the corrupt officials to take a hike or escalate the matter publicly. If enough people do that corrupt officials will automatically be shut down.

As an honest taxpaying citizen I have no sympathies for anybody who partakes in corruption. If they go broke, that is fine by me. Once enough businesses feel the pinch of paying bribes without black money, maybe they will do the right thing for once and push for reform.

And it's all too convenient for traders and business people using black money and paying bribes to claim that they are 100% honest and innocent onlee and it was the corrupt officials who forced their hand. I have seen lots of such folks, and maybe that is about a 20% factor in it, for the most part the reason why they pay bribes is because they intentionally cut corners, and because they actually want to cheat the government.

panduranghari · Post by **panduranghari** » 11 Nov 2016 17:28

Chandragupta wrote: There is too much collateral damage.

I do not hear many honest people complaining. For the greater good, just accept the loss and move on. Honestly earned Lakshmi never disappears in a jiffy. Think about your children inheriting a better nation with better finances and honest money.

JohnTitor · Post by **JohnTitor** » 11 Nov 2016 17:30

Bart S wrote: Oh please, stop playing the victim. Corruption is equally the responsibility of those who pay the bribes and not just the ones demanding it. Perhaps with no black money to go around people will finally stand up and ask the corrupt officials to take a hike or escalate the matter publicly. If enough people do that corrupt officials will automatically be shut down.

While I agree with the bolded part, it's easier said than done in a country like India where corruption is as common as breakfast.

Trying to buy property in india fully legally compliant is very hard as the seller/buyer will find someone else. India needs drastic change before we can start placing the full onus on the payer

Schmidt · Post by **Schmidt** » 11 Nov 2016 17:33

jagga wrote:I doubt most people here even know how difficult is to run the business in India. They all are going gaga about this step, of course, they get their wages in white. Who cares, about small business and traders who are day and night hounded by IT officials. Some are saying if you do everything by book you have nothing to worry! My advice to them start a business in India, go 100% by book and be a satyavadi Harishchandara and see if you and your family can survive. It's a professional extortion racket run by devils! I am hearing so many families are in deep trouble. All the cash lying in these homes is not profit, it was the necessity to run the business. People who worked hard all their lives are all of sudden seeing destruction of their efforts. For some its matter of life and death!

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Absolutely true

The going rate for VAT registration is 15-20k
For Excise registration - rate is 40-50k per inspection , can go up depending on project size

Plus we need to keep paying VAT officers off even when we comply fully , otherwise they will simply harass you to death; they will not pass the VAT / ED reimbursements due to you

The funny thing is you can make online payments , but need to go to CTO office with a copy to show that you have complied and pass on the monthly dues to the officers

Time to time you get Labour officials inspection whom you have to pay off , even if everything is above board

You should see the look on their faces when they find everything is in order - deep disappointment, and still , you need to pay the minimum amount to prevent harassment

We got a 2 cr import that was held up by airport customs who demanded 10lacs just to release the goods. There were no issues whatsoever. We finally had to negotiate it down to 4 lacs. There are brokers who will ' help " you to arrive at reasonable rates.

For all these , we shell out cash in white. But show them as some other expenses , to tally the accounts.

Otherwise we need to show them as profits and end up paying 30% corp tax on a bribe that you were forced to pay.

I am just wondering if the corrupt system decides to INCREASE the rates to make up for their losses caused by this measure.

jagga · Post by **jagga** » 11 Nov 2016 17:34

Chandragupta wrote:
jagga wrote:I doubt most people here even know how difficult is to run the business in India. They all are going gaga about this step, of course, they get their wages in white. Who cares, about small business and traders who are day and night hounded by IT officials. Some are saying if you do everything by book you have nothing to worry! My advice to them start a business in India, go 100% by book and be a satyavadi Harishchandara and see if you and your family can survive. It's a professional extortion racket run by devils! I am hearing so many families are in deep trouble. All the cash lying in these homes is not profit, it was the necessity to run the business. People who worked hard all their lives are all of sudden seeing destruction of their efforts. For some its matter of life and death!

The same people will then crib on other threads about India not being able to compete with China in manufacturing. While all they can do here is mock and celebrate the bankruptcy of thousands of businesses in India that are run by common people.

Exactly Chandragupta ji, My heart breaks every time I call back to India during last 3-4 days. My dad's small business (small scale manufacturing) was crushed by the local municipality and local MLA (back in 2003), who had eye on our business premises. By not having our factory unit, price of his property would increase by double. Guess what , he managed to get it demolished. My dad on road in one stroke, Courts less I say the better. During that time I finished my education in UK and was looking for job in India. I had no intention to settle down in UK. And this nasty incident happened to us, in anger I came back to UK and promised myself to never go back to India and get settled.
Nobody even want to know why the small businesses are forced to run the business in BM in India. The tax system and business environment is so F****d up here you have no way out. They just see Jagan, Pakistan, Mulayam, Builders and overlook the millions of small time businesses. As I write mindless raids are going on in the business premises in delhi, people are not even opening there premises in fear. Guess who is raiding, honest people of IT and Excise departments!

jagga · Post by **jagga** » 11 Nov 2016 17:35

Bart S wrote:
jagga wrote:I doubt most people here even know how difficult is to run the business in India. They all are going gaga about this step, of course, they get their wages in white. Who cares, about small business and traders who are day and night hounded by IT officials. Some are saying if you do everything by book you have nothing to worry! My advice to them start a business in India, go 100% by book and be a satyavadi Harishchandara and see if you and your family can survive. It's a professional extortion racket run by devils! I am hearing so many families are in deep trouble. All the cash lying in these homes is not profit, it was the necessity to run the business. People who worked hard all their lives are all of sudden seeing destruction of their efforts. For some its matter of life and death!
As an honest taxpaying citizen I have no sympathies for anybody who partakes in corruption. If they go broke, that is fine by me. Once enough businesses feel the pinch of paying bribes without black money, maybe they will do the right thing for once and push for reform.

And it's all too convenient for traders and business people using black money and paying bribes to claim that they are 100% honest and innocent onlee and it was the corrupt officials who forced their hand. I have seen lots of such folks, and maybe that is about a 20% factor in it, for the most part the reason why they pay bribes is because they intentionally cut corners, and because they actually want to cheat the government.

You have no idea what you are talking about.

Bart S · Post by **Bart S** » 11 Nov 2016 17:36

JohnTitor wrote:
Bart S wrote: Oh please, stop playing the victim. Corruption is equally the responsibility of those who pay the bribes and not just the ones demanding it. Perhaps with no black money to go around people will finally stand up and ask the corrupt officials to take a hike or escalate the matter publicly. If enough people do that corrupt officials will automatically be shut down.
While I agree with the bolded part, it's easier said than done in a country like India where corruption is as common as breakfast.

Trying to buy property in india fully legally compliant is very hard as the seller/buyer will find someone else. India needs drastic change before we can start placing the full onus on the payer

The drastic change has started. You have to start somewhere and can't be paralyzed and accept the status quo, just because someone somewhere will be inconvenienced. Otherwise vote in the Mulayams and the Mamtas and live under their benevolence as everybody screws the nation and we sink into oblivion relative to China and other growing economies. If there is one thing Indian politics of the past few decades has excelled at in every sphere, it is justifying inaction, and thankfully that mentality is getting the rude shock that it deserves.

Murugan · Post by **Murugan** » 11 Nov 2016 17:37

Despite all the problems, Acharya Balkrishna of Patanjali became one of the top in just 10 years (with 8 years of struggling with Congi Admin). He is not whining much, as such.

MohdKav · Post by **MohdKav** » 11 Nov 2016 17:38

Bart S wrote:
jagga wrote:I doubt most people here even know how difficult is to run the business in India. They all are going gaga about this step, of course, they get their wages in white. Who cares, about small business and traders who are day and night hounded by IT officials. Some are saying if you do everything by book you have nothing to worry! My advice to them start a business in India, go 100% by book and be a satyavadi Harishchandara and see if you and your family can survive. It's a professional extortion racket run by devils! I am hearing so many families are in deep trouble. All the cash lying in these homes is not profit, it was the necessity to run the business. People who worked hard all their lives are all of sudden seeing destruction of their efforts. For some its matter of life and death!
Oh please, stop playing the victim. Corruption is equally the responsibility of those who pay the bribes and not just the ones demanding it. Perhaps with no black money to go around people will finally stand up and ask the corrupt officials to take a hike or escalate the matter publicly. If enough people do that corrupt officials will automatically be shut down.

As an honest taxpaying citizen I have no sympathies for anybody who partakes in corruption. If they go broke, that is fine by me. Once enough businesses feel the pinch of paying bribes without black money, maybe they will do the right thing for once and push for reform.

And it's all too convenient for traders and business people using black money and paying bribes to claim that they are 100% honest and innocent onlee and it was the corrupt officials who forced their hand. I have seen lots of such folks, and maybe that is about a 20% factor in it, for the most part the reason why they pay bribes is because they intentionally cut corners, and because they actually want to cheat the government.

Absolutely devoid of reality and not even making an attempt at understanding the point people are making. Let me guess, you must be a salaried person too.

Bart S · Post by **Bart S** » 11 Nov 2016 17:39

panduranghari wrote:
Chandragupta wrote: There is too much collateral damage.
I do not hear many honest people complaining. For the greater good, just accept the loss and move on. Honestly earned Lakshmi never disappears in a jiffy. Think about your children inheriting a better nation with better finances and honest money.

There is no collateral damage.

The collateral damage to genuine people is very minimal. The collateral damage that he is referring to are to parties that at are not the biggest fish but still guilty in a big way. They may not be the primary targets but they cannot claim unfair treatment or collateral damage.

MohdKav · Post by **MohdKav** » 11 Nov 2016 17:42

There is no point talking. You can only wake people who are asleep not people who are pretending to sleep.

Schmidt · Post by **Schmidt** » 11 Nov 2016 17:42

Bart S : You clearly have no experience running a business in India

For your info , I have profitable businesses running in the US / Singapore , and I have NO problems whatsoever , none

It's the Indian system that stinks

I do hope that NM follows through and cleans up the ENTIRE corruption eco system , that thsi just the first step

By the way , do you know that the going rate for a COMMISSIONER LEVEL posting in TN is 5 cr !! That too depends on the ministry as well as tenure left ( which is usually 1-2 years max )

The amount is payable directly to the concerned ministers. So these babus work overtime to get their return on equity - they might target 10 cr per year or 18 months . And so it flows downwards !!

You will never find an honest official heading lucrative ministries.

Paul · Post by **Paul** » 11 Nov 2016 17:43

53k crores deposited in last 2 days per TimesNow on twitter

Bart S · Post by **Bart S** » 11 Nov 2016 17:44

MohdKav wrote: Absolutely devoid of reality and not even making an attempt at understanding the point people are making. Let me guess, you must be a salaried person too.

The reality is that black money is illegal and must be tackled. There are no grey areas or justifiable illegal activities here. You are either legal or illegal, you can't ask for sympathy saying that you are only slightly illegal (like slightly pregnant).

And since you are dishing out labels and attributing motives instead of debating the point, let me guess as well that you butthurt and trolling here because you have had your BM hoard wiped out in one fell swoop

jagga · Post by **jagga** » 11 Nov 2016 17:45

Just to be clear , We do not have any business since that unfortunate incident happened to our family. And , all of our family members are in jobs now and are "Honest Tax Paying Citizens".

Primus · Post by **Primus** » 11 Nov 2016 17:45

MohdKav wrote:
A deal was to be made last week, it got pushed to this week.

Bank loan against land depends on the valuation by a valuer and capacity to repay. Its hard to raise enough of cash for my medium term plans, but enough for short term, but asset valuations are going to be iffy from now, and banks are going to be 'more' stricter on land backed loans.

I am just trying to understand how the Government intends to handle some negative's created by this event which is largely very positive

MK Ji, I am trying to understand your situation better.

You say there was a deal last week but got postponed. Was this all white? If so, the guy should still be willing to do it, albeit at somewhat reduced price. If it was partly in black then you certainly have lost that, but then 'you reap as you sow'.

All you have to do is to renegotiate with the buyer for a new price, get your money in white and go to the bank. I am assuming with white money there will be no cash transactions, making it much smoother. Yes, this may take time but hopefully not forever.

with real estate transactions becoming all white in India, it will lead to total transparency which cannot be anything but good for everyone.

Sicanta · Post by **Sicanta** » 11 Nov 2016 17:47

Schmidt wrote:Bart S : You clearly have no experience running a business in India

For your info , I have profitable businesses running in the US / Singapore , and I have NO problems whatsoever , none

It's the Indian system that stinks

I do hope that NM follows through and cleans up the ENTIRE corruption eco system , that thsi just the first step

By the way , do you know that the going rate for a COMMISSIONER LEVEL posting in TN is 5 cr !! That too depends on the ministry as well as tenure left ( which is usually 1-2 years max )

The amount is payable directly to the concerned ministers. So these babus work overtime to get their return on equity - they might target 10 cr per year or 18 months . And so it flows downwards !!

You will never find an honest official heading lucrative ministries.

And these are the ones who have been burned totally during this purge. Does that not lighten you up a bit? And modi is not going to stop here.

Bart S · Post by **Bart S** » 11 Nov 2016 17:47

Schmidt wrote:Bart S : You clearly have no experience running a business in India

For your info , I have profitable businesses running in the US / Singapore , and I have NO problems whatsoever , none

It's the Indian system that stinks

I do hope that NM follows through and cleans up the ENTIRE corruption eco system , that thsi just the first step

By the way , do you know that the going rate for a COMMISSIONER LEVEL posting in TN is 5 cr !! That too depends on the ministry as well as tenure left ( which is usually 1-2 years max )

The amount is payable directly to the concerned ministers. So these babus work overtime to get their return on equity - they might target 10 cr per year or 18 months . And so it flows downwards !!

You will never find an honest official heading lucrative ministries.

I am completely aware of the scale of corruption. What I am saying is stop, do the right thing, and fight back, instead of using it as an excuse to perpetuate corruption. Instead of whining and trying to rationalize BM hoarding under whatever excuse.

Make no mistake, this is the best thing against corruption that has happened in decades. Its as big a start towards what you say that we are going to get.

jagga · Post by **jagga** » 11 Nov 2016 17:51

Just get a electricity connection with your honesty and white money in business premises. Of course, you will remain a harishchandra , premises wont have electricity and hence no black money! Simple!

jagga · Post by **jagga** » 11 Nov 2016 17:56

Final post, I hope as this step has been taken now, onus is on NaMo now to do surgical strike on IT department and lets see how much clean up would be done there. If its back to same old ways with new 500/1000 and on top of that new 2000 coming into economy, then this whole exercise will be pointless. Lets see if more tough law's would be implemented in coming months. At the moment for me personally it's very difficult to either fully oppose or support this action. In a year's time i will have more clear views.

morem · Post by **morem** » 11 Nov 2016 17:56

jagga wrote:Just get a electricity connection with your honesty and white money in business premises. Of course, you will remain a harishchandra , premises wont have electricity and hence no black money! Simple!

So basically govt should NOT have taken any action against black money , is that what we are alluding to ?

Sicanta · Post by **Sicanta** » 11 Nov 2016 17:57

jagga wrote:Just get a electricity connection with your honesty and white money in business premises. Of course, you will remain a harishchandra , premises wont have electricity and hence no black money! Simple!

Since you most certainly dont agree with the present course of events, what do you think modi should have done to deal with the menace of BM? And keeping in mind that there are innumerable ways to generate it. And plugging up the leaks is an ongoing process. like JAM on subsidies side.

Bart S · Post by **Bart S** » 11 Nov 2016 17:59

jagga wrote:Just get a electricity connection with your honesty and white money in business premises. Of course, you will remain a harishchandra , premises wont have electricity and hence no black money! Simple!

Boss, the problem is that if you are the only one person who wants to be honest and everybody else is corrupt and is willing to pay bribes in cash, there is no incentive to change and people will just laugh at you.

If everybody decides to do the right thing, not pay the bribe and complain to higher authorities/vigilance and make a scene, the result will be that that guy will be out of a job.

In this case if both the corrupt officials and the ones paying them lose their black money the game is reset. It makes it harder for corrupt people on both sides of the table to do business.

SaraLax · Post by **SaraLax** » 11 Nov 2016 18:10

MohdKav wrote:
Bart S wrote:
Oh please, stop playing the victim. Corruption is equally the responsibility of those who pay the bribes and not just the ones demanding it. Perhaps with no black money to go around people will finally stand up and ask the corrupt officials to take a hike or escalate the matter publicly. If enough people do that corrupt officials will automatically be shut down.

As an honest taxpaying citizen I have no sympathies for anybody who partakes in corruption. If they go broke, that is fine by me. Once enough businesses feel the pinch of paying bribes without black money, maybe they will do the right thing for once and push for reform.

And it's all too convenient for traders and business people using black money and paying bribes to claim that they are 100% honest and innocent onlee and it was the corrupt officials who forced their hand. I have seen lots of such folks, and maybe that is about a 20% factor in it, for the most part the reason why they pay bribes is because they intentionally cut corners, and because they actually want to cheat the government.
Absolutely devoid of reality and not even making an attempt at understanding the point people are making. Let me guess, you must be a salaried person too.

If i were you - i wouldn't even be reading this forum let alone posting in a hasty manner in this forum. I would be making more efforts to see how i can turn around this current trouble and move things to a safer state. I am so suprised to find that people who run businesses and who claim to be in a soup - have so much time to post here relentlessly for hours.

Yagnasri · Post by **Yagnasri** » 11 Nov 2016 18:10

10000 withdrawn from SBI today. Lot of people standing in the lanes. took some 20 min.

Pappu drama at a ATM in Delhi is on Tv now. Idiot thinks that doing this kind of drama now and then will help him.

jagga · Post by **jagga** » 11 Nov 2016 18:11

morem, Bart S, Sicanta
Whatever I wanted to say I have said now. Please read my final post (^^) on this topic. Now I would be more interested in future action. May there be a system where all have opportunities and we have happy families in every part of our country. What I know we all have good intentions, personal circumstances do play a role in the way we think and understand some situations.

hanumadu · Post by **hanumadu** » 11 Nov 2016 18:24

As for the mop-up of old ₹500 and ₹1,000 notes, any sum less than ₹10 lakh crore flowing back into the banks would suggest that the hoarders have somehow got away. The amount is calculated on the assumption that black money, according to 2007 World Bank estimates, is 24 per cent of the GDP, or ₹34 lakh crore in 2015-16, of which the cash component is estimated at 40 per cent or ₹14 lakh crore. We may assume that 30 per cent of this money will not return to the system, fearing investigation by income-tax authorities, which would leave us with ₹10 lakh crore. It is also worth noting that black money cannot be unearthed merely through this step, as those at the apex of the pyramid have devised smarter ways of squirrelling their wealth away. In order to prevent a shift in concealment from cash to property, laws need to be tightened as well.

I don't know what the editor is thinking, but if the total currency of 500/1000 bills in circulation is 15 lakh crore, how can 14 lakh crore be black money. Even if it is, any thing less than that amount deposited is good as it is less liability for the govt and it is not the same as getting away.

Schmidt · Post by **Schmidt** » 11 Nov 2016 18:25

This is a great step , no doubt

It would flush out a significant amount of black money held in cash

It also signals INTENT on the part of NM that he is serious about eradicating the parallel economy

But a major part of it is held overseas ( they are trying to get it back )
Also in the form of property , bullion etc

I am sure other measures targeting these asset classes would also be rolled out in due course

The main point is this is a step to minimise the CASH economy and route it to the banking system where enforcement is easier

Also , I expect major correction in the property prices

As a prospective buyer , I must add that the real estate prices in India are INSANE
It makes far better sense to buy in US/ SG / Australia than here , for the same amount in equivalent USD/SGD you get far better properties as well as better rental yields

In core Chennai areas property prices are 16000-21000 per SQFT , ave unit prices are now 3.2-5.0 Cr ( totally crazy )
And the developers claim there are enough buyers

rahulm · Post by **rahulm** » 11 Nov 2016 18:58

What stopped small,business owners and traders to unite and take a stand to fo force a change ? The easy way out was to lubricate the system and say mera kaam ho Gaya

It's the scene from Sholay - most of the village gives in and wants to continue to give in to the dada as long as their family is spared. For now. Until the next demand.

Tactically brilliant, strategically stupid. Quite like mushy.

Business made their choice - to lie with the devil while the people who chose to fight th system suffered. Now, those very businesses are reaping the fire wind of change, and the shoe is on th other foot they complain.

Finally, people want taxes to be like temple hundi donations. Payable, in amounts a that suit, when one wants to do it and at time of their choosing.

SaraLax · Post by **SaraLax** » 11 Nov 2016 19:02

hanumadu wrote:
As for the mop-up of old ₹500 and ₹1,000 notes, any sum less than ₹10 lakh crore flowing back into the banks would suggest that the hoarders have somehow got away. The amount is calculated on the assumption that black money, according to 2007 World Bank estimates, is 24 per cent of the GDP, or ₹34 lakh crore in 2015-16, of which the cash component is estimated at 40 per cent or ₹14 lakh crore. We may assume that 30 per cent of this money will not return to the system, fearing investigation by income-tax authorities, which would leave us with ₹10 lakh crore. It is also worth noting that black money cannot be unearthed merely through this step, as those at the apex of the pyramid have devised smarter ways of squirrelling their wealth away. In order to prevent a shift in concealment from cash to property, laws need to be tightened as well.
I don't know what the editor is thinking, but if the total currency of 500/1000 bills in circulation is 15 lakh crore, how can 14 lakh crore be black money. Even if it is, any thing less than that amount deposited is good as it is less liability for the govt and it is not the same as getting away.

I tend to agree with you ... there is a mismatch somewhere in the editor's calculation.

Bart S · Post by **Bart S** » 11 Nov 2016 19:05

jagga wrote:morem, Bart S, Sicanta
Whatever I wanted to say I have said now. Please read my final post (^^) on this topic. Now I would be more interested in future action. May there be a system where all have opportunities and we have happy families in every part of our country. What I know we all have good intentions, personal circumstances do play a role in the way we think and understand some situations.

Fair enough, and that is what everyone wants at the end of the day.