Currency Demonetisation and Future course of Indian Economy

[Gus]

About Jayalalitha, does she know she has no more black money? When she comes out won't that be a shock that would send her back into la la world? Then again are they just pretending that all is OK with her, just like they did way back with Salazar?

she most probably knows. her confidante sasikala is the only one with access to her room other than relevant docs and staff. read my previous post on this for more info.

[UlanBatori]

Oh, sorry. I didn't know she is still in hospital. That's right, someone told me that Diwali sweets sales were deeply shattered because companies are afraid to be caught distributing laddoos the day The News comes out.

[LokeshC]

The latest rumor is about all properties going the way of 1000. Basically, they will re-register every property all over again with the help of new KYC documents. If not submitted within the year, the property will be treated as benami and acquired by the Govt (this provision is being introduced). This will really set the cat amongst the pigeons. The sheer number of properties owned via benami trusts etc is huge. Having folks to re-register their properties will also entail explaining how they got the money to purchase the properties. Basically, cleaning up the RE sector after wiping out their war chests. Expect the whines to get shriller!

IIRC land ownership is a state subject. Don't know if the center has any instruments that it can fully control.

[SBajwa]

[Suraj]

FYI, two laws:
Benami Transaction Prohibition Act, 2016
Black Money Act 2015

Reading
Benami Transactions (Prohibition) Amendment Act, 2016

Via the Benami Transactions (Prohibition) Act 1988, parliament has totally prohibited the Benami transactions and made it an offence, prohibiting all suits, claims and actions based upon Benami transactions. This law had several loopholes such as lack of proper implementation machinery, absence of appellate mechanism, lack of provision with centre for vesting confiscated property etc.

To plug the loopholes and replace archaic act, UPA Government had introduced a Benami Transactions (Prohibition) Bill 2011. However, that bill had lapsed when 15th Lok Sabha dissolved. The current government had introduced Benami Transactions (Prohibition) Amendment Bill, 2015 in July 2016 in parliament. This bill has been now passed in both the houses of parliament and has become an act {Benami Transactions (Prohibition) Amendment Act, 2016} with effective from 11th August, 2016.

The core aim of the act is to route the unaccounted money into the financial system; seize Benami properties and prosecute / punish those who are involved in these properties. The amended law has tried to give a clear definition of Benami transactions; established adjudicating authorities; set up appellate tribunal and specified the penalties for entering into the Benami transaction. This law will have long term impacts on real estate industry in the country and will increase the practice of including the correct name in property transactions. This in turn would bring transparency in residential market. With an increased transparency, the risks would be minimized and residential properties transactions would get boost. It will also boost the confidence of lenders {banks or private individuals}. The stringent law would also bring down the prices of real estate because such transactions are done by cash rich investors to park their unaccounted wealth in real estate.

As I understand it, the central laws define benami, the adjudicating and appellate authorities, as well as penalties. It's for states to maintain the land records and implement the law.

[Lilo]

Eternal Hitler war room speech now on Demonetisation.

Dont forget to downvote this folks.
Its a vedio made by a sikular JNU type as usual for demonizing Modi on the sly.

[Yagnasri]

At present, it is just a rumour. However, We have a mess in property ownership in India at the moment. There will be disputed properties and properties about whom the owners themselves are not knowing. Properties owned by very old people and children.

[Rishi Verma]

While media was crying foul and gave corrupt congressis a platform to point fingers at BJP's Janardan Reddy, the tax-men were doing their job

Tax Notice to J. Reddy

Some tax officials discretely visited the wedding and various other venues where parties were held, amid questions about crores spent on life-size replicas of monuments, mini-villages, motorized elephants and Brazilian dancers at the Bangalore Palace grounds.

[Nitesh]

Anticipating strike on properties, UP government has allowed use of old notes for land registration till 24th

[hanumadu]

Isn't there a proposal to pass a law that guarantees land/property ownership by a person once it is registered in his name by the govt? Basically the govt is saying that it will sort out all the records, eliminate duplicate registrations and make sure in future all registrations are proper and only in one person's name. The back ground work must already have been done for it which will be used to figure out the benami properties too. May be finally people can invest in property without fear of kabja/squatting. What a relief it will be.

[asgkhan]

This is a useful site to locate working ATMs:
https://cashnocash.com/

info is 24 hours old. A day late and a dollar short

[shiv]

Isn't there a proposal to pass a law that guarantees land/property ownership by a person once it is registered in his name by the govt? Basically the govt is saying that it will sort out all the records, eliminate duplicate registrations and make sure in future all registrations are proper and only in one person's name. The back ground work must already have been done for it which will be used to figure out the benami properties too. May be finally people can invest in property without fear of kabja/squatting. What a relief it will be.

This will be more difficult than getting Swiss money back. The murkiest depths of corruption India is in this department with everyone employed in city/town corporations, the local police and politcians having a role

[hanumadu]

http://www.livemint.com/Politics/XkfkZg ... val-f.html

Rajasthan first to pass ‘titling’ law
The Vasundhara Raje-led government in Rajasthan has passed a landmark legislation providing statutory backing to land records, effectively guaranteeing land and property ownership.

This will create an efficient and transparent modern land market, provide certainty of tenure and end litigation that often mires development projects. Once an individual is accorded legitimate rights to land, which at present can be disputed, their ability to trade these rights improves dramatically.

Till the Rajasthan law was passed, India did not guarantee titles.

The only proof of ownership was (and, in other states, still is) proof of a transaction between a buyer and a seller or property tax receipts.

All these can be legally challenged, and usually are, holding up both industrial and development projects, from hardware parks to low-cost housing.

[disha]

Shiv'ji.,

with every land purchase of land in US of A including in the grand wild whest Kaalifornia., one has to purchase a "Title Insurance" mandatorily. Interesting right? The title insurance basically means that somebody is paid to do the legwork of "ensuring the property has marketable title - that is, clear of any liens, judgments, defects or encumbrances."

The company from which you purchase the title insurance has to then file further paperwork that if after your purchase of the land, the land goes "ulta"., then the company will refund your purchase amount in full and has to park some money with some bank to ensure that it has enough reserves to put up for insurances it gives out. If the title insurance company itself goes belly up., then the state has to fund the bank that funds the buyer.

This came about since in US of A., the title to land was initially sorted out by gunpowder & bullets. Something which Indians must adopt first to appreciate title insurance.

With all the advances in digitization of land records and computers., such a change can be brought in India.

[shiv]

With all the advances in digitization of land records and computers., such a change can be brought in India.

A lot of land records simply don't exist.

It is technically possible for someone's family to have been on a plot of land for generations and have no record whatsoever of how much land was originally theirs and how it was acquired. This has been very very useful for land mafia backed by builders and local government officials to falsify records, or create fake "records" and then used to sell to someone else - who divides it into two and sells to two parties.

The problem is how to one of chor being kotwal also. If you own a plot and you need to register it and have it digitized - you have to approach the local government who are 100% crooked. They can say anything the they like. They can say "Your records are fake" or "There are no records" etc depending on whether they want to create trouble for you and kick you out of your land. That is how bad things are at a local level. At the best possible scenario they will ask for cash to do your work. And for cash they will gladly falsify records. Making a land measurement 2 feet this side or 4 feet that side can earn them money now but will be a huge problem in future - and this has happened time and again.

Yes something must be done. A start must be made, but just like demonetization the poorest and the most honest with the least land will support the GoI. The most powerful will hate it.

[Sachin]

Mean while at Bangalore Rural...
SHQ says the Rs.500 notes are now out. She herself got a bunch of them to give it to our odd-job man who was visibly happy. I saw the queues at the ATMs of PSU banks. Crowd is now no more than 10 to 15. The queues are all neat and orderly. Looks the the GoI plan was to distribute Rs.500 notes in metros first and then fan out to rural areas. In KL, looks like these notes would hit the metros today.

In Kasaragod Dt. (Northern Kerala), there was a shower of Rs.500 and Rs.1000 notes from a moving bus . A police mobile put up a chase, but could not figure out who did this. The people were happy to collect a few of these notes, and perhaps would have made a dash to a near by bank.

[hnair]

Sachin, over here, 500 Rs has been out since yesterday evening

[kmkraoind]

Dont forget to downvote this folks.
Its a vedio made by a sikular JNU type as usual for demonizing Modi on the sly.

For me, except the PayTM gibberish, rest is okay.

[hanumadu]

http://www.business-standard.com/articl ... 366_1.html

The authority will first issue a provisional certificate, for which the state will not stand guarantee. If there are no objections or dispute arises, the authority will issue a certificate and a map to the owner other land or property with state guarantee.

Currently, it is kept voluntary for the owners to apply for this certificate. The state government has kept the application fee of 0.5% of the land rate determined by a district level committee to encourage more people to join this new scheme.


Through the Bill the state government has given itself the power to enter into any property or premise for the purpose of survey by giving its owner a prior notice.

Its voluntary to begin with and there is a fee associated with it. And the govt will provide a certificate only if it can ascertain there are no disputes associated with it. Some one who wants peace of mind or increase his prospects of selling will gather and provide as much documentation as possible to get that certificate. A very careful relative of mine buys property only if the seller has 30 year link documents (whatever those are).

Perhaps, with the curbs on black money and other measures to follow, Modi will be able to curb corruption too and eliminate one source of problematic land records.

[uddu]

Now someone do a counter video. Since Only the text of that need to be added. Make it look like the corrupt blaming Modi unable to make their black money white and the loss of lakhs of crores of black money. One can add things like..how we were ruling the people by giving them 500 and 1000 and a bottle of liquor and we masters are now become beggers etc..

[uddu]

Dont forget to downvote this folks.
Its a vedio made by a sikular JNU type as usual for demonizing Modi on the sly.

For me, except the PayTM gibberish, rest is okay.

Actually they did a big mistake in their propaganda by making the person blaming Modi is Hitler. So people will have in their mind whoever blaming Modi as equivalent to Hitler.

[Philip]

It was funny.We need to laugh at ourselves.Our politicos have no sense of humour.Let's see who's laughing after the UP/Punjab polls.

[Picklu]

My CT for the 13 lakh old note bank robbery in J&K : an attempt to convert fake currency to legitimate. Police should squeeze bank stuff to find the insider hand.

[Picklu]

I really want the gov to modify all atms to dispense only Rs 100 note henceforth and then discontinue even the new Rs 500 & Rs 2000 note.

It should be made as much inconvenience as possible to continue doing cash business like before for any amount greater than Rs 500.

I understand the hardship of the poor but remember, every child is made to undergo hardship from the tender young age of 4 so that they study instead of playing the whole day and become literate. The people who are waiting for things to come back to normal should be pressurized not just for 50 days but 500 or even 5000 days if required so that a large section of society is forced to become cashless.

[Sachin]

A very careful relative of mine buys property only if the seller has 30 year link documents (whatever those are).

That is known as "encumbrance certificate". To prove that for the last 30 years, it is only the current possessor (of the land) who had "indisputable and unalienable rights" on the said property .

[Gus]

A very careful relative of mine buys property only if the seller has 30 year link documents (whatever those are).

That is known as "encumbrance certificate". To prove that for the last 30 years, it is only the current possessor (of the land) who had "indisputable and unalienable rights" on the said property .

That is the starting point of any land purchase along with the survey.

The entire land dealing is so full of potential issues that newbies will get chewed up and spit out. So you have to pay for agents and so on to protect yourself and the time delays and costs are just ultimately unproductive overhead.

[Picklu]

I would like the govt to make it a mandatory precondition for every doctor, CA and in general every bachelor degree holder to have PAN and aadhar card before they can get their degree certificate from next year onward. Their license etc should be linked to their aadhar no. This would ensure greater adoption of PAN & aadhar. Also cancel license/cancel registration of the old hold outs after an amnesty period. I can understand the difficulty for a rural poor or old folks but have no sympathy for educated/middle class/middle age/urban people.

Also, under the threat of confiscation via benami transaction act, govt should ask each and every financial instrument - checking and savings account, loan accounts, FD, credit card etc to be linked to PAN and aadhar card of primary holder. It can be staggered geographically like give 6 months time to people in state capitals, 9 month to everyone in urban area and 12 months to everyone in rural area but it must be done.

Similarly, each piece of land and other real estate property also must be linked to PAN and aadhar. Have similar staggered approach but get this done.

There might be some leakage of black money but 99% of its generation would be stopped due to unavailability of storage within India.

[prasannasimha]

I don't think a Doctor can even think if practicing wihout a PAN card. My students themselves all have PAN cards and have to file and pay income tax as their stipend has a TDS deduction

[Yagnasri]

That is known as "encumbrance certificate". To prove that for the last 30 years, it is only the current possessor (of the land) who had "indisputable and unalienable rights" on the said property .

That is the starting point of any land purchase along with the survey.

The entire land dealing is so full of potential issues that newbies will get chewed up and spit out. So you have to pay for agents and so on to protect yourself and the time delays and costs are just ultimately unproductive overhead.

There is a legal reason for this practice. The limitation for suing for possession of the property owned by a person but under the unauthorised possession of another is 12 years. In the case of the property owned by the Government, it is 30 years. Hence this practice came into being.

Encumbrance Certificate for a period shows all the registered transaction during the period. So you will know the history of the title etc. in that. But there are few problems here. An equitable mortgage which is a mortgage by deposit of title deed will not be registered and will not appear in the said certificates. However, most of the states now require the mandatory registration of this type of mortgage. The second one I can immediately remember is the family partition which will not be registered in most of the cases.

Purchasers, therefore, can take the earlier title documents as per the EC to protect themselves. They can also check CIBIL details of the seller to see the loans if any taken by him/her and also CERSAI records for the charge on the property and also ROC records in case the seller is a company.

[rohitvats]

A very careful relative of mine buys property only if the seller has 30 year link documents (whatever those are).

That is known as "encumbrance certificate". To prove that for the last 30 years, it is only the current possessor (of the land) who had "indisputable and unalienable rights" on the said property .

Not exactly.

The 30-year link documents (this exercise is called Title Search) shows the mutation of the property over the years. Basically, it will show how the owner ended up with the property he claims as his own.

Land ownership records as maintained by the Patwari or Talati or Karnam are updated every 5-years in India. In case the property or part of it has been sold/divided in the intervening period, the transaction is updated in property records along with exact property details. When transactions happen, property numbers are also updated. For example, if a 5-acre plot had property number as 55-55-55 and part of it was sold, each part will acquire new numbers - 55-55-55/1 and 55-55-55/2. All subsequent transactions/divisions or Mutations, of the property will continue to carry reference to original number.

This is how the chain of transactions or inheritances is built - a 30 year title record check helps to tally the property details and clearly see how you/owner/seller arrived at its ownership.

Encumbrance certificate comes next - it is basically a certificate which tells you whether the property is under dispute or has some lien on it from a financial institution. If you take loan against a property or their is mortgage, then a remark in red-ink is mentioned in the land records document with the Patwari. NBFC and Private Banks are also expected to do this but many don't. What this does is that it ensures people cannot sell their property even with forged documents. Title search itself will throw up the LAP/mortgage aspect. no registrar will register your property if it shows remark in red-ink against the ownership documents. And Patwari will not remove it from his records till the bank in question gives a NOC.

Serious advice - engage a lawyer to undertake full legal due-diligence. Will not cost more than 10K but will give you peace of mind.

[Yagnasri]

Engage a good lawyer. Not any lawyer. But in States like AP, TS etc you have computerised records of all the transactions which can be obtained even online.

[rohitvats]

It is funny how every naysayer Economist says that cash component of black money is minuscule.

Have any of these worthies ever been close to large wads of cash in life? Tell them to take a stroll in Delhi Sadar Bazaar or Chandni Chowk or meet a few 'investors' in RE sector.

Not everything can be converted in asset and is NOT converted into assets for various reasons. Even a middle level shopkeeper in a any of the markets in Delhi was sitting on Rs 2-3 crore worth of cash after Diwali shopping. And this is just 5-6 weeks of spending activity.

[Sachin]

Have any of these worthies ever been close to large wads of cash in life? Tell them to take a stroll in Delhi Sadar Bazaar or Chandni Chowk or meet a few 'investors' in RE sector.

A colleague of mine from Old Hyderabad mentioned about the place Nampalli (I know that it has a railway station, that is all) was kind of reknown for large scale hawala dealings. People literally used to sit on bags of cash, as per my colleague. No IT, DRI or other folks even raided these place. And that now after demonetization, the people out there are once again sitting on cash bags, but without having a clue on what to do next.

[Manish_Sharma]

[Singha]

lucky man. special collectors edition flawed notes should be worth a lot like certain stamps that sell for lakhs or millions.

[Manish_Sharma]

Jaitley speaking on RSTV

[Sachin]

Jaitley speaking on RS.

I think all eyes & ears would now be interested in how the "Co-Operative Bank" business is going to be handled. Looks like across India, there are Co.Operative societies who also operating "banking" (!!??) establishments fully violating the RBI norms and guide lines. The ATM and money withdrawal problems seems to be petering out.

[Bart S]

A very careful relative of mine buys property only if the seller has 30 year link documents (whatever those are).

If buying on a loan, the bank will check that first, regardless of whether he is very careful or not

It's par for the course for most apartment sales at least.

[RajeshG]

IndiaTV, normally a very pro-Modi channel, has started going negative primarily because of the wedding season issue. Rajat Sharma had grilled Jaitley about the wedding issue and RBI had later announced 2.5 lacs scheme. The operating procedures announced by RBI today were covered very negatively by IndiaTV.

http://www.business-standard.com/articl ... 042_1.html

“A bit of foresight would have helped. Isn’t it common sense that this is sowing and wedding season? The plan is indeed unquestionably revolutionary but better preparedness could have avoided such teething troubles,” said an IAS officer in a core economy department.

http://www.business-standard.com/articl ... 292_1.html

Demonetisation: Bitcoin trading at 25% premium in India amid high demand

http://www.business-standard.com/articl ... 882_1.html

income redistribution..

There are numerous agents involved in the exercise of illegally converting black money into white and the rate of commission charged is based on several factors. For one, the higher is the amount, the lower is the commission. If the amount is in crores or rupees, the agent gets a cut of 30-35 per cent; the rate is 40-50 per cent if the amount exchanged is in lakhs of rupees. Similarly, the rate is also decided by the urgency in a person’s need for cash. If he or she wants cash immediately, the rate would be higher; in case he or she is willing to wait (which involves risk), the rate would be lower.

[Suraj]

Income redistribution ? That implies someone is confiscating by force. The example quoted above is ENTIRELY voluntary.