Currency Demonetisation and Future course of Indian Economy

pankajs · Post by **pankajs** » 29 Nov 2016 15:12

Watch the outflows more carefully than the inflows. Inflows to identify BM hoarders and outflows to identify the money launderers.

So say a farmer deposits 10 lakhs in his account claiming to be last 10 years savings. Now after the *Cash* withdrawal limits are relaxed how fast is the account emptied in *Cash*. If it is within a year that makes it highly suspicious and *could* trigger an automatic probe. Taking this logic further, any *cash* withdrawal over 25% of the deposits between Nov and Dec'16, over the next year, could trigger a probe. Now I don't know what the GOI/IT thinking is.

This is based on the premise that anyone who has *used* the farmer to launder their black money would want it back fast (within a year) and without it being traced back to them (cash). Any other type of high valued *cash* transaction would be traceable via documentation.

Sachin · Post by **Sachin** » 29 Nov 2016 16:07

Meanwhile.. at Kerala State

shiv · Post by **shiv** » 29 Nov 2016 16:54

TKiran wrote: Vina sir, you are being too optimistic here. The BM hoarders worry about the paper that they get into their hands the day that falls on their hands. They immediately convert into white by starting businesses and buying land in their village. For example, I know a pandu with impeccable credentials (he was caught by ACB taking 2000 rupees bribe, got suspended, then after two years came back but was put into crime branch where there is no money, he paid 40lakhs bribes to get himself transferred to plum placement, took 2 years to pay back the politician from whom he took the loan of 40 lakhs at exorbitant rate of 36% interest. ) Then he started hotel business, he spent 11crores but showed only 2crores as capital expenditure. Now all his family members manage the hotel, now he is making money in the business, he buys a necklace to his wife, daughter every other month, also his father is still in the village now owns 40 acres lemon and lemonade garden, his technic is always he buys with loan from co-operative bank, once after 1 year or so, he repays loan amount, IT can't detect such transactions. All his businesses are in the name of his family members, who file the tax return promptly. He is making his father to contest elections,
<snip>
It's public knowledge that he takes 30000 rupees cash and a blackdog every day, in fact, many people jealous of him write letters to IT Dept., but so far no ride on him, because IT Dept has more than 10years of his returns, shows nothing. He doesn't touch paper currency by hand, very afraid if the currency notes have red pigment attached to it. Ofcource he did not get any promotions in the last 10 years.

This is a story that all of us have heard countless times in every part of India.

This is precisely the reason why demonetization has support from people. It is another matter that black transactions will not be affected - but perceptions matter in politics and if clean governance is the final aim and the current govt is serious - people such as this person are going to be in a bit of bother

SaraLax · Post by **SaraLax** » 29 Nov 2016 17:16

TKiran wrote: Vina sir, you are being too optimistic here. The BM hoarders worry about the paper that they get into their hands the day that falls on their hands. They immediately convert into white by starting businesses and buying land in their village. For example, I know a pandu with impeccable credentials (he was caught by ACB taking 2000 rupees bribe, got suspended, then after two years came back but was put into crime branch where there is no money, he paid 40lakhs bribes to get himself transferred to plum placement, took 2 years to pay back the politician from whom he took the loan of 40 lakhs at exorbitant rate of 36% interest. ) Then he started hotel business, he spent 11crores but showed only 2crores as capital expenditure. Now all his family members manage the hotel, now he is making money in the business, he buys a necklace to his wife, daughter every other month, also his father is still in the village now owns 40 acres lemon and lemonade garden, his technic is always he buys with loan from co-operative bank, once after 1 year or so, he repays loan amount, IT can't detect such transactions. All his businesses are in the name of his family members, who file the tax return promptly. He is making his father to contest elections,

According to him, all the currency gets converted to white money, No bribe taker keeps his bribe as caspa

Real estate also, he buys in the name of the partnership company, and files returns, he doesn't have any worries about IT guys, everything is white, only thing is he would have spent 5 crores for a villa, bought by loan with ICICI Bank, and after 1year the bank loan doesn't appear.

His latest move is to take a bank loan for his son for UG in UK.

It's public knowledge that he takes 30000 rupees cash and a blackdog every day, in fact, many people jealous of him write letters to IT Dept., but so far no ride on him, because IT Dept has more than 10years of his returns, shows nothing. He doesn't touch paper currency by hand, very afraid if the currency notes have red pigment attached to it. Ofcource he did not get any promotions in the last 10 years.

I guess Vina Saar was retorting to Philiph Saar's concern about BM flowing out of India. The current NDA govt has signed deals with many countries including US/Switzerland/Mauritius/Singapore/Cyprus/Seychelles and a few more - both on the Double-Tax-Avoidance-Agreement and the issue of offshore money coming into India from these countries, quick overnight or over-fortnight profit making in stock exchanges & elsewhere and zero tax repatriation of profits back to offshore country (IIRC - now any offshore money that gets invested and is taken out with in 1 year will be subjected to tax in India).

Another interesting development that my mother (works in a PSU bank) has been reporting is that almost 90% of the outstanding gold loans & majority of the education loans have all been repaid in her branch far ahead of time !. It seems on Nov 10th there was a rush of people coming in with wads of 1000s & 500 INR notes to repay completely their gold loans far ahead of the loan end date and this happened for education loans too. This seemed to have happened in many branches around the region and from the next day - the branches were then asked to collect the loan repayments not as direct cash notes but as payment credits into the bank account of the loan holders & then do the transfer to bank to repay the outstanding gold/education loan amount. The bank employees were attentive and even caught some folks who were repaying their gold loans but had arrears in the personal loan front and forced him/her to repay the other outstanding loan too (many thousands to ... a few lakh of INRs). It seems the banking software being used was helpful on that front in identifying folks that were not paying loans at proper time periods. Thus many personal & car loans that were in arrears got repaid fully too.

Later - the bank folks came to know that the local political party leaders/councilors/Real Estate Agents/vegetable-fruit-groceries-oil-commodity traders combined with the pawn brokers (you can find one in every street in urban areas) and had offered these cash money (basically their own BM) to the common people they knew & asked them to transfer the gold loans & other personal loans from banks to their pawn shop businesses & informal unregulated finance companies at far cheaper loan rates !!. Through these same transactions - these BM Holders were pushing their wads of BM in cash form via the common man (acting as money mules) into the banks as repayment for gold loans (most were 5 lakhs and more in value). The currency counting machines got heated up on the first day but from the next day onwards the bank got a bit smarter. All early loan repayment transactions using suddenly available money was firstly - recorded as a credit into the savings account of the loan holders and only then was the loan repayment transaction executed. Thus no direct cash based repayment of the loans was permitted. So with KYC available in the bank for these bank accounts - if needed these sudden repayment transactions can be traced back and investigated.

Now the bank folks are wondering how these overloaded pawn broker guys & the actual BM holders - are going to manage these loans & the yearly repayments or EMIs in the less formal manner of money management system that they run. The banks had a good IT setup in the backend and they used SMS & etc to keep the loan holders informed about repayment dates & etc. It seems the BM holders are looking to convert their Pre-Nov-8th BM into a Post-Nov-8th BM (spread out for a few years atleast) after suffering some 15-20% reduction in value - by pushing it in the above indicated cash routing manner. So due to NDA government's Demonetization - some of these BM holders, who were all caught unawares, have panicked & thus were forced to become an informal & temporary, localized financial & banking entity using their BM stashes as the capital & running an operation that is wholly happening away from the sights of the RBI. A parallel Black Money based small, local, crude informal financing ecosystem is what it is now and its completely illegal. Who would have thought .. in what different ways the panicked BM Holders are exposing themselves to outside world and surely they are losing their BM one way or the other in the long term. Seems to be a panicky reaction from these set of BM Holders. This can be very risky for both the loan-giver and loan-holder and also for the entity who keeps the accounts for these transactions in the informal banking scenario.

Don't know if these BM holders will take the Voluntary Income disclosure bait that the NDA Govt. has offered them once more & with a slightly higher rate of penalty than the scheme which ended in September 30 2016.

If the IT department asks all these common men/women who repaid their loans at banks at a far earlier date - for the real source of their repayment money - then these BM Holders will probably get pulled in for further investigation and things can come out in the open.

pankajs · Post by **pankajs** » 29 Nov 2016 17:19

To add to what Shiv saar has written above.

1. The greater transparency there is in transaction involving public servant the narrower the scope of bribe/etc will become. E.g. The passport seva has become much more transparent in the last 10 years. Similarly, self attestation has brought transparency in another domain. GST is another example in the taxation regime. More and more sectors/domains need to move in that direction.
2. The more transaction move away from cash the smaller the pool will become where these folks fish.
3. The more unwilling to pay citizens are, some out of awareness and some out of fear, that again will shrink the pool were underhand payments are the norm.

Things will not flip in a day but every incremental step is progress. That is not to say that Cash transaction and bribes/black money will disappear completely even in the long run but a significant reduction is certainly possible. Such stories will become rare and thus will allow greater focus on these cases.

shiv · Post by **shiv** » 29 Nov 2016 17:35

pankajs wrote:To add to what Shiv saar has written above.

1. The greater transparency there is in transaction involving public servant the narrower the scope of bribe/etc will become. E.g. The passport seva has become much more transparent in the last 10 years. Similarly, self attestation has brought transparency in another domain. GST is another example in the taxation regime. More and more sectors/domains need to move in that direction.
2. The more transaction move away from cash the smaller the pool will become where these folks fish.
3. The more unwilling to pay citizens are, some out of awareness and some out of fear, that again will shrink the pool were underhand payments are the norm.

Things will not flip in a day but every incremental step is progress. That is not to say that Cash transaction and bribes/black money will disappear completely even in the long run but a significant reduction is certainly possible.

Checking black transactions and black money is a continuous process - it can never be a one off event. I have noticed in BLR that the gradual transfer of a lot of services to the e- route has reduced the need for bribes. So there is a continuous contraction in employees joining the city corporation who are accustomed to bribes. This has to happen across the country and it can happen only slowly.

But it seems to me that some people considered black transactions as a birthright or a "normal and healthy thing". Fine - they are entitled to that view - but then they should not worry about the sucking up of black money should they? What is the worry? After all these big big BM hoarders have converted all their money - they should be laughing at those who got caught and laughing at Modi also. Somehow I am missing the happiness and gratitude that I should be seeing because of Modi's stupidity. And there is so much advice coming in "GoI should have done this. Should have done that etc".

Much more likely is that the person who has made a lot of illegal wealth - who has 50 crotes or 200 crores in gold and real estate, will also have 10 crores in cash? Why? Because liquidity is needed for further deals. When you have benami properties and much gold you need cash in hand to pay off various people who have helped you and are due to help you further. It is naive to think that a man has simply converted 50 crores into assets and keeps zero cash. You see when you have 50 crores worth of property you cannot keep it idle. You have to build something or rent out the property - there is money flowing in there and some of that money is in cash, some of that is going into the bank accounts of relatives or even benami accounts. So it is to be expected that even people who have converted black money into property/gold will have taken a hit. And they are upset. That makes me happy.

pankajs · Post by **pankajs** » 29 Nov 2016 17:39

SaraLax wrote:So due to NDA government's Demonetization - some of these BM holders, who were all caught unawares, have panicked & thus were forced to become an informal & temporary, localized financial & banking entity using their BM stashes as the capital & running an operation that is wholly happening away from the sights of the RBI. Seems to be a panicky reaction from these set of BM Holders. This can be very risky for both the loan-giver and loan-holder and also for the entity who keeps the accounts for these transactions in the informal banking scenario.

<snip>

If the IT department asks all these common men/women who repaid their loans at banks at a far earlier date - for the real source of their repayment money - then these BM Holders will probably get pulled in for further investigation and things can come out in the open.

Had though of writing this many time but it always slipped from my mind given the fast pace with which the thread moves. You post not only reminded me of that thought but also provides the perfect backdrop.

I had this nagging feeling after about the first week that one of the objective of the exercise was to shake the system such that it spread panic amongst the BM cash holders. Now this *may* be a figment of my imagination but the idea is that the Cash BM holder is being to forced to take action in panic with the hope that they will do thing that will expose them and make identification easier.

E.g. As you have stated, any prepayment *could* be used to start backtracking the cash and cash flows of the person concerned. Not to say that everyone who pre-paid their loan is a money launderer but it does provide a list and a starting point.

vijayk · Post by **vijayk** » 29 Nov 2016 17:40

Man! Public sector banks can use customer service skills and little sophistication. They are brutal in their approach

Philip · Post by **Philip** » 29 Nov 2016 17:56

Real estate is the global preferred route to "bury" unaccounted wealth . Here we have gold and jewellery too.The major players have umpteen giant benami cos run by others.Take allegations about Sahara. the Bengal chit scam,etc.It wasn't too long ago that great critic PC was openly accused of owning a chain of speciality hospitals! These types are the real brigands and they invariably get off
scot free becos they have the contacts,moolah and political
power,not to mention judicial contacts and the best legal help.In some cases like PC,they sre
bigwig legal eagles too!

Next come the VVIP/VIP's benamis.They have
their own empires using their own benamis.One
fav route is ed. institutions,commercial
buildings,hotels,etc.After that come the soldiers of
the parties
and small fry business types who bribe their way
when caught.Finally,the hoi polloi who've stashed
away jewellery for their daughter's wedding,cssh
for a rainy day.Of course govt servants,cops and
babus belong to the special category of
untouchables who are tasked with catching the
ordinary crooks!

shiv · Post by **shiv** » 29 Nov 2016 17:56

I see too many posts that I will call as "childish" in describing what legendary black money wielders do. Anyone who lives in India will hear at least 2 such stories a week. I am not saying that the stories are untrue or that people are not making that sort of money. It is perfectly true - but what these stories do not bring out is the ecosystem in which such black money is generated and multiplied.

As always the biggest sources of black transactions arise from the "permit raj" or the need for permissions. the guy who has to give permission for something demands money in cash and he gets it. If I am a builder - there may be different permissions I require. There may be a matter of a "minor permission" like building an illegal extra floor, or reducing the gap between the road and the wall of your construction. Here a junior fellow will take the bribe. When the matter is more serious like conversion of usage of government land to build a mall - then the bribe goes higher. So the government itself is full of deeply corrupt people going all the way up to the minister. Time and time again you hear of people who have illegal properties and muscle power standing for election. They often bribe their way into a political party promising money in exchange for a seat - the most powerful elected representatives demand and get choice portfolios where they can fiddle with land records and cover past misdeeds. Police officers and bureaucrats who are compliant are kept in plum posts. This who do not agree - honest people are posted out of the way.

It is because India works in this way that we are among the most deeply corrupt people in the world. The cockiness and anger of the corrupt has even shown up in some posts in this thread but in the long term this system needs to be changed. The reason why Indians wait patiently in lines is that they hope that their patience today will be rewarded by punishment of the corrupt. It is not often that we see action against the corrupt people in our midst although it is getting more common to see that. May it continue

Yagnasri · Post by **Yagnasri** » 29 Nov 2016 18:06

There are many rumours which may be true or false. As per rumours in Mumbai - Private Sector Banks, Co-operative banks, major shops all aided conversion. As I posted before all NCP money said to have been converted into white. Even RBI people are also said to be involved. How far it is all true is not known.

chetak · Post by **chetak** » 29 Nov 2016 18:17

Just find it funny that @Paytm gives the man of the match award by cheque

TKiran · Post by **TKiran** » 29 Nov 2016 18:37

shiv wrote: This is a story that all of us have heard countless times in every part of India.

This is precisely the reason why demonetization has support from people. It is another matter that black transactions will not be affected - but perceptions matter in politics and if clean governance is the final aim and the current govt is serious - people such as this person are going to be in a bit of bother

Shiv Sir, the point I was trying to make is entirely different. The point I was trying to make is that this demonetization is not at all aimed at curbing the black money.

I will explain, now in the case of this paandu I have been talking about, what stops him accepting cashless bribes, such as visa or MasterCard or paytm? He can put the POS in front of the bribe giver and ask to swipe the card. Actually this will reduce his work of collecting the cash and checking if there is any FICN, and then carry the physical cash to the bank to deposit into the bank account of his wife's business.

The only losers in demonetization are the politicians, who are the ultimate repository of cash currency. But not the people who take the bribes. But then, all the politicians lost money, who didn't have businesses to convert their black money to white. But we hardly see any Politician who doesn't have a business. For example, Chandra Babu Naidu has heritage dairy, he has thousands of acres of land in the name of heritage, and perhaps some change of some 10000crores to buy some mlas in case a sudden need arises. If that money is gone, it's just some change, this time he will get back that change in the new currency.

If you want to end corruption, you have to start taxing the farmers, close down all the businesses, and stop all the RE development.

But thinking that demonetization will end black money is wrong, because there's no black money.

Manish_Sharma · Post by **Manish_Sharma** » 29 Nov 2016 18:44

When cash is given out so slowly, that while 8 lakh crore+ is deposited by 27th November, and 2.11 lakh crore withdrawn. How could they have converted?

Even if they may think they have converted, there will be accountability asked for later. These co-operatives, banks and jewellers will be under the thumb of Govt. from now on.

I have a couple who are psu banks employees, in different banks. All I hear in the evening is that they are condemning cursing their manager their collegues for being so unfair and all that. Every organisation has such people. These people can be whistleblowers, so imagining that all the 2.5 lakh banks help launder 1 crore each doesn't seem possible at all. Even then it comes to 2.5 lakh crores.

On 12th of November Zee News did stings on jewellers and foreign exchange dealers. That means many of those may have become wary too.

Even if they do, was there so much earning happening since last april that that last man holding these unaccounted 1000 - 500 notes can explain how he earned these?

On the other hand we have these self-proclaimed well wishers of Bharat. Who claim that they know how this "cheating" is happening and being done by their own but not whistleblowing about the tactics and strategies. But showing big lables of being "federalists... yackity yack etc.", and rationalising the thieves who are looting Bharatvarsh.

Its clear and Black and White :
If you know how the black is being converted to white, then prove your patriotism by exposing the techniques here. Do not try to wrap and hide this dishonesty under great ideologies and lables as "federalist".

We also have people here who admire Soviet Union and Castro standing upto US and Nato bravely, but ignore the confiscation of freedom and rights of their citizens. But immediately term the 'Demonetization' as draconian and predict 'raid raj' coming soon. Tchh tchh as shourie quoted a pakistani poet "Haq Achha, Uske liye koi aur marey aur achha".
Translation : Haq = Rights, freedoms
Haq is GOOD,
Somebody else dies for Haq that is EVEN MORE BETTER!

I agree that all this rona dhona is just a catharsis by losers, they've not been able to find a way in converting their ill-gotten wealth and now they are trying to hide their misery under these fantasies that a channel has been found to convert it.

Otherwise they would have been silent and celebrating contemptuously. But as Shiv ji points out, "happiness is missing" !

hanumadu · Post by **hanumadu** » 29 Nov 2016 18:57

TKiran wrote:

If you want to end corruption, you have to start taxing the farmers, close down all the businesses, and stop all the RE development.

Let me have my black money and make some more or it will be apocalypse. You should suggest this to Modi instead of wasting your time here.

Sachin · Post by **Sachin** » 29 Nov 2016 19:20

TKiran wrote:I will explain, now in the case of this paandu I have been talking about, what stops him accepting cashless bribes, such as visa or MasterCard or paytm? He can put the POS in front of the bribe giver and ask to swipe the card.

Well if this was so easy, the police man could have tried doing the same even today right? The police man took bribe in cash, as that is the way which leaves minimum trail leading to the transaction. Even a receipt would leave some kind of trail. So if this police man now decides to use a VISA/MASTERCARD based bribe scheme, he would land in trouble soon. Because every swipe on that machine of his, the money passes through multiple banks each maintaining a record. And soon IT would like to know why every one loves a police man so much and swipe at a machine bought by him. And then it is time for asking some questions on having more wealth, when compared to his actual government salary.

TKiran · Post by **TKiran** » 29 Nov 2016 19:26

Sachin wrote:
TKiran wrote:I will explain, now in the case of this paandu I have been talking about, what stops him accepting cashless bribes, such as visa or MasterCard or paytm? He can put the POS in front of the bribe giver and ask to swipe the card.
Well if this was so easy, the police man could have tried doing the same even today right? The police man took bribe in cash, as that is the way which leaves minimum trail leading to the transaction. Even a receipt would leave some kind of trail. So if this police man now decides to use a VISA/MASTERCARD based bribe scheme, he would land in trouble soon. Because every swipe on that machine of his, the money passes through multiple banks each maintaining a record. And soon IT would like to know why every one loves a police man so much and swipe at a machine bought by him. And then it is time for asking some questions on having more wealth, when compared to his actual government salary.

Sachin sir, the point I was trying to make is that the paandu is keeping the POS of the hotel his wife runs.

SaraLax · Post by **SaraLax** » 29 Nov 2016 19:33

Yagnasri wrote:There are many rumours which may be true or false. As per rumours in Mumbai - Private Sector Banks, Co-operative banks, major shops all aided conversion. As I posted before all NCP money said to have been converted into white. Even RBI people are also said to be involved. How far it is all true is not known.

Sir - All these BM stashes were before Nov 8th - only known to the very few people who owned it and not known to even the rest of the family members like the wife or siblings or children of that person. Post Nov-8th , All BM stashes had to be converted to white (more so after direct money exchange was made very tough through inking, reduction in per day exchange value and etc) and now this required that the knowledge of existence of such a BM Stash become known among a chain of folks starting from entities like the BM Holder's car driver, the money mules greedy to earn a few 1000 INRs, cashiers/accountants/managers at the bank who willfully help in Black-2-White conversion, shop owners helping in BM_Cash-2-BM_Material_wealth conversion, RBI employees and even worst of all crooked IT department folks !!.

But all we need now is for one guy in that large conversion chain to give away information about the various black-2-white transactions that happened through him and the various people who took part in it. It is a weak chain and just a couple of police inspectors can bring out the rats that panicked on night of Nov 8th & indulged in a quick but mistakes-ridden, less foolproof conversion of black-2-white or cash-2-material transaction.

Let us wait until start of 2017 and for the end of the current lack of enough new currency in the economic system. I am sure the PM will wield the whip again and instruct the IT, CBI and etc agencies to pounce on these sham conversion transactions starting from those which are the bulkiest and most easiest to pick out and file cases against them. If the govt doesn't go after these so-called-smart BM holders, the govt. will definitely lose power in the next election. What is the aim of demonetization & the accompanying struggles put up by the common man in exchanging his old money for new one ?? - if not for filing cases against the BM holding thugs, expanding the tax based revenues for the nation and spending the collected money for the betterment of the poor of this country.

We already know about how Jan Dhan accounts have overnight become flush with heavy money. Similarly there are many many evidences that are available for investigating the sudden Black-2-White as well as Black_Cash-2-Black_Wealth transactions... like the large number of complete loan repayments at banks just starting from Nov 10th, repayment of loan arrears in big numbers at banks/municipalities and etc. !.

jamwal · Post by **jamwal** » 29 Nov 2016 19:35

Manish_Sharma wrote: We also have people here who admire Soviet Union and Castro standing upto US and Nato bravely, but ignore the confiscation of freedom and rights of their citizens. But immediately term the 'Demonetization' as draconian and predict 'raid raj' coming soon. Tchh tchh as shourie quoted a pakistani poet "Haq Achha, Uske liye koi aur marey aur achha".
Translation : Haq = Rights, freedoms
Haq is GOOD,
Somebody else dies for Haq that is EVEN MORE BETTER!

!

Brilliant ! Stole it.

Manish_Sharma · Post by **Manish_Sharma** » 29 Nov 2016 19:52

TKiran wrote: Sachin sir, the point I was trying to make is that the paandu is keeping the POS of the hotel his wife runs.

Stage 1 : Bribe giver has a paper trail which shows that he has some sort of dealing 'in a matter' with this 'policeman'.

Stage 2 : Bribe giver has a Swipe trail which shows that he has made a payment at this policeman's wife right at the time, policeman was dealing officially with this Bribe giver. Soon there will be a pattern that at the time of dealing with these 'Bribe Givers' a 'certain' amount is being swiped at 'wife's hotel' by same 'Bribe Givers'.

Manish_Sharma · Post by **Manish_Sharma** » 29 Nov 2016 19:57

jamwal wrote:
Manish_Sharma wrote:
Tchh tchh as shourie quoted a pakistani poet "Haq Achha, Uske liye koi aur marey aur achha".
Translation : Haq = Rights, freedoms
Haq is GOOD,
Somebody else dies for Haq that is EVEN MORE BETTER!
Brilliant ! Stole it.

I once knew an RSS pracharak who used to say :
"Everyone is patriotic here, we all want more Subhash Chandra Bose and Chandrashekhar Azads born here in Bharat. But in neighbour's house, not our own."

chetak · Post by **chetak** » 29 Nov 2016 20:01

Manish_Sharma wrote:
TKiran wrote: Sachin sir, the point I was trying to make is that the paandu is keeping the POS of the hotel his wife runs.
Stage 1 : Bribe giver has a paper trail which shows that he has some sort of dealing 'in a matter' with this 'policeman'.

Stage 2 : Bribe giver has a Swipe trail which shows that he has made a payment at this policeman's wife right at the time, policeman was dealing officially with this Bribe giver. Soon there will be a pattern that at the time of dealing with these 'Bribe Givers' a 'certain' amount is being swiped at 'wife's hotel' by same 'Bribe Givers'.

bribes are rarely paid willingly. They are very often extracted by threat, overt or covert. The bribe giver has an interest in establishing such a money trail and the bribe taker has no interest to leave any trace of the illegal act.

The hotel would have to have irrefutable evidence of services provided and billed with all the logistic trail established including multiple service providers / employees in the hotel backing up the story.

sounds very far fetched.

ShauryaT · Post by **ShauryaT** » 29 Nov 2016 20:02

About a year back, I did a quick survey of about 30 people in Mumbai to ask, if their Doctors took cards as payments. This was mostly an educated population. Only about 30% of the Doctors did. Safe to presume the one's who took cash only were under reporting their income? So, now would someone say most Doctors are dishonest?

BM is so pervasive in Indian society that almost anyone who has the means to do it does it - exceptions apart. Trying to make a moral issue of this matter is a blue on blue attack and not helpful. It goes into historical decadence that has set in due to legacy issues and calling entire classes of Indians as dishonest does not go anywhere. Individuals react to a given environment, change the environment and individuals will mold accordingly. Recognize that these are the wealth creators of society and penalizing alone is unlikely to get the desired results. I am not counting those with government power and earn money through corruption in this category or even those trading in illicit goods or services.

Shiv ji: Nothing against your profession but wanted to make a point using your very respectable profession.

pankajs · Post by **pankajs** » 29 Nov 2016 20:06

I recall Modi saying in one of his speeches that if need be he will start from 1947(?) onward.

The agreement with Swiss authorities has been concluded for exchange of information on Indian nationals transacting through it banks. I have no way of knowing this but what if Modi gets all deposit/withdraw/transfer/other info from the Swiss authorities right from 1947 for anyone who had done so with an Indian passport. That will certainly yield a treasure trove of information even if most money has moved out of Swiss banks. That *authentic* information can be used to follow the cash trail overseas and inside India.

Consider that possibility for a moment. Consider the same for most jurisdiction with which we have such exchange information. Modis statements are not to be taken lightly.

chetak · Post by **chetak** » 29 Nov 2016 20:16

ShauryaT wrote:About a year back, I did a quick survey of about 30 people in Mumbai to ask, if their Doctors took cards as payments. This was mostly an educated population. Only about 30% of the Doctors did. Safe to presume the one's who took cash only were under reporting their income? So, now would someone say most Doctors are dishonest?

BM is so pervasive in Indian society that almost anyone who has the means to do it does it - exceptions apart. Trying to make a moral issue of this matter is a blue on blue attack and not helpful. It goes into historical decadence that has set in due to legacy issues and calling entire classes of Indians as dishonest does not go anywhere. Individuals react to a given environment, change the environment and individuals will mold accordingly. Recognize that these are the wealth creators of society and penalizing alone is unlikely to get the desired results. I am not counting those with government power and earn money through corruption in this category or even those trading in illicit goods or services.

Shiv ji: Nothing against your profession but wanted to make a point using your very respectable profession.

you are painting with a very broad brush and needlessly characterizing a noble profession as being inherently dishonest.

many patients will ask for a receipt because they are reimbursed the bill by their employers.

Doctors will give receipts to all who ask. They are not going to increase their admin load by needlessly handing out paperwork when not required.

Did you include this in your so called survey??

why would a doctor accept a card?? They usually know their patients for decades and will extend credit if need be. Card payments are by no means any measure of "honesty" as is being touted here by some.

Many shops nearby will happily swipe a patient's card and give the money to the doctor, as is being done in many places now, because of the cash and change crunch.

Bart S · Post by **Bart S** » 29 Nov 2016 20:16

pankajs wrote:I recall Modi saying in one of his speeches that if need be he will start from 1947(?) onward.

The agreement with Swiss authorities has been concluded for exchange of information on Indian nationals transacting through it banks. I have no way of knowing this but what if Modi gets all deposit/withdraw/transfer/other info from the Swiss authorities right from 1947 for anyone who had done so with an Indian passport. That will certainly yield a treasure trove of information even if most money has moved out of Swiss banks. That *authentic* information can be used to follow the cash trail overseas and inside India.

Consider that possibility for a moment. Consider the same for most jurisdiction with which we have such exchange information. Modis statements are not to be taken lightly.

That is not going to happen. Not for India and not for any country. The bank accounts in the past were under then Swiss laws that promised no disclosure and they are not going to do that. I remember reading somewhere that they turned the Brits down as well.

The current agreement is under their current laws and covers reporting going forward. So this doesn't really unlock all the black money from Swiss bank accounts that was in there in the past. It just closes off one more avenue, one that was very safe and reliable, and the money probably has to move to shadier, riskier and much less friendly locales.

As somebody pointed out earlier in the thread, dealing with tax evasion is as simple as raising the costs to the point where it no longer makes sense. All this while it was so easy to do this stuff that (morals apart) you would be stupid not to. That is what is changing, bit by bit.

SaraLax · Post by **SaraLax** » 29 Nov 2016 20:18

For my children - we go to a paediatrician doctor who is a lady and promptly gives bills the moment the checkup ends.

These days - she is ready with short printed notes containing her bank's name, the bank account number and the IFSC code of the bank branch. She requests those who are unable to pay in cash, to NEFT the consultation fee (200/300) or the treatment fee to her bank account with in a week and also send her by mobile message the bank's SMS notification of the NEFT transfer of money.

Bart S · Post by **Bart S** » 29 Nov 2016 20:20

ShauryaT wrote:About a year back, I did a quick survey of about 30 people in Mumbai to ask, if their Doctors took cards as payments. This was mostly an educated population. Only about 30% of the Doctors did. Safe to presume the one's who took cash only were under reporting their income? So, now would someone say most Doctors are dishonest?

BM is so pervasive in Indian society that almost anyone who has the means to do it does it - exceptions apart. Trying to make a moral issue of this matter is a blue on blue attack and not helpful. It goes into historical decadence that has set in due to legacy issues and calling entire classes of Indians as dishonest does not go anywhere. Individuals react to a given environment, change the environment and individuals will mold accordingly. Recognize that these are the wealth creators of society and penalizing alone is unlikely to get the desired results. I am not counting those with government power and earn money through corruption in this category or even those trading in illicit goods or services.

Shiv ji: Nothing against your profession but wanted to make a point using your very respectable profession.

You are conflating multiple things and confusing the issue. It is very simple, and has nothing to do with whether they accept payments by cash or card. If they were reporting their income accurately and paying tax, they would be honest. If they aren't reporting their full income and evading tax, they would be dishonest. It is as simple as that, and whether they accept cards or cash is irrelevant.

You seem to be saying that evading tax is justifiable just because the other person is doing it, and that is not an argument that stands up to scrutiny in any legal system.

Having said that, I think that the government should force merchants of a certain size/volume and any professional services like doctors, CAs etc, to at least offer a cashless payment option, so that people who do not want to pay in cash do not have to.

ShauryaT · Post by **ShauryaT** » 29 Nov 2016 20:22

chetak wrote: many patients will ask for a receipt because they are reimbursed the bill by their employers.

Good point. I guess you have never heard of fake Dr bills and other such bills routinely submitted. I guess, it must be only me that hears about these things?

chetak · Post by **chetak** » 29 Nov 2016 20:23

^^^^^^^

Like in the US.

A terrorist may get away sometimes bot someone charged with tax fraud will be mercilessly hunted down and jugged.

Make the cost of committing the crime high enough so that it becomes a credible deterrent and enforce mercilessly and quickly.

chetak · Post by **chetak** » 29 Nov 2016 20:26

ShauryaT wrote:
chetak wrote: many patients will ask for a receipt because they are reimbursed the bill by their employers.
Good point. I guess you have never heard of fake Dr bills and other such bills routinely submitted. I guess, it must be only me that hears about these things?

The docs I know would NEVER do this and I know plenty of them.

If you have met or dealt with anyone like that, then it is your misfortune.

chetak · Post by **chetak** » 29 Nov 2016 20:36

SaraLax wrote:For my children - we go to a paediatrician doctor who is a lady and promptly gives bills the moment the checkup ends.

These days - she is ready with short printed notes containing her bank's name, the bank account number and the IFSC code of the bank branch. She requests those who are unable to pay in cash, to NEFT the consultation fee (200/300) or the treatment fee to her bank account with in a week and also send her by mobile message the bank's SMS notification of the NEFT transfer of money.

for some strange reason, patients will sometimes (first time) transfer Rs 100 and check back with the doc to see it it has succeeded and on confirmation, they immediately transfer the rest.

a learning curve for all, I guess.

Bart S · Post by **Bart S** » 29 Nov 2016 20:38

chetak wrote:
ShauryaT wrote:Good point. I guess you have never heard of fake Dr bills and other such bills routinely submitted. I guess, it must be only me that hears about these things?
The docs I know would NEVER do this and I know plenty of them.

If you have met or dealt with anyone like that, then it is your misfortune.

Fake bills are almost always generated by employees themselves or occasionally by pharmacy folks or people who have access to some cash bill book somehow.

In any case with an exemption of 15K working out to a tax rebate of about Rs 4500 per year maximum, this is small time thievery and cannot be used to justify large-scale BM in society.

And if there is something bigger like an insurance scam going on, not only is this a major criminal activity that insurance companies will track down with the full force of their legal teams, but the doctor will lose their license.

Bart S · Post by **Bart S** » 29 Nov 2016 20:39

chetak wrote:
SaraLax wrote:For my children - we go to a paediatrician doctor who is a lady and promptly gives bills the moment the checkup ends.

These days - she is ready with short printed notes containing her bank's name, the bank account number and the IFSC code of the bank branch. She requests those who are unable to pay in cash, to NEFT the consultation fee (200/300) or the treatment fee to her bank account with in a week and also send her by mobile message the bank's SMS notification of the NEFT transfer of money.
for some strange reason, patients will sometimes (first time) transfer Rs 100 and check back with the doc to see it it has succeeded and on confirmation, they immediately transfer the rest.

a learning curve for all, I guess.

Sirji this is basic common sense and beset practice really. I would do the same if I was transferring say a couple of lakh to a new account.

Bart S · Post by **Bart S** » 29 Nov 2016 20:42

SaraLax wrote:For my children - we go to a paediatrician doctor who is a lady and promptly gives bills the moment the checkup ends.

These days - she is ready with short printed notes containing her bank's name, the bank account number and the IFSC code of the bank branch. She requests those who are unable to pay in cash, to NEFT the consultation fee (200/300) or the treatment fee to her bank account with in a week and also send her by mobile message the bank's SMS notification of the NEFT transfer of money.

With UPI, she can actually simplify and take it to the next level. All she needs is a bill printer of some kind and software that can handle barcodes. So basically customer opens app, scans barcode, authorizes transaction, and its done. No typing and no typos, which is what worries people.

Or she gives them a simple ID like doctorname@bank and they key that in and the money gets transferred instantly with verifiable receipts as well.

Subdas · Post by **Subdas** » 29 Nov 2016 20:44

It has been 20d since the surgical strike on BM was done. There is no doubt that NAMO is a master disrupter and he made the biggest disruption since 1947. All great leaders in every field have been master disrupter. Thanks NAMO for being the true leader. People of India are loving this master distrupter. Life it self is a journey through disruptions and I am enjoing every bit of this disruption. For me personally, have not visted the ATM for last 20d and yet have not face any problem in my daily life for so called "CASH CRUCH".

chetak · Post by **chetak** » 29 Nov 2016 20:49

Bart S wrote:
chetak wrote:
The docs I know would NEVER do this and I know plenty of them.

If you have met or dealt with anyone like that, then it is your misfortune.
Fake bills are almost always generated by employees themselves or occasionally by pharmacy folks or people who have access to some cash bill book somehow.

In any case with an exemption of 15K working out to a tax rebate of about Rs 4500 per year maximum, this is small time thievery and cannot be used to justify large-scale BM in society.

And if there is something bigger like an insurance scam going on, not only is this a major criminal activity that insurance companies will track down with the full force of their legal teams, but the doctor will lose their license.

why do you need all that??

any hole in the wall printing press will print up a numbered bill book for you with whatever name of doctor you want and any hole in the wall rubber stamp maker will make the rubber stamp that you want.

Bart S · Post by **Bart S** » 29 Nov 2016 20:54

^Exactly. I have heard of some people (mostly elderly folks with not much income) being in the 'business' of providing 15K worth of fake pharmacy bills for 200-300 Rs. However I have never heard of doctors being involved in that kind of stuff.

vina · Post by **vina** » 29 Nov 2016 20:55

Bart S wrote: With UPI, she can actually simplify and take it to the next level. All she needs is a bill printer of some kind and software that can handle barcodes. So basically customer opens app, scans barcode, authorizes transaction, and its done. No typing and no typos, which is what worries people.

Or she gives them a simple ID like doctorname@bank and they key that in and the money gets transferred instantly with verifiable receipts as well.

UPI has a bill pay part as well. No need for any paper at all! The doctor can raise a bill for the VPA , or simply even request for payment from you, with the "Ask Money" feature and it will keep following up until closed !

chetak · Post by **chetak** » 29 Nov 2016 20:56

Bart S wrote:
SaraLax wrote:For my children - we go to a paediatrician doctor who is a lady and promptly gives bills the moment the checkup ends.

These days - she is ready with short printed notes containing her bank's name, the bank account number and the IFSC code of the bank branch. She requests those who are unable to pay in cash, to NEFT the consultation fee (200/300) or the treatment fee to her bank account with in a week and also send her by mobile message the bank's SMS notification of the NEFT transfer of money.
With UPI, she can actually simplify and take it to the next level. All she needs is a bill printer of some kind and software that can handle barcodes. So basically customer opens app, scans barcode, authorizes transaction, and its done. No typing and no typos, which is what worries people.

Or she gives them a simple ID like doctorname@bank and they key that in and the money gets transferred instantly with verifiable receipts as well.

I have seen an android tablet with a USB card reader that works off the wifi.

Your card is swiped / You punch the PIN in and your cell no is entered on the app in the tablet and the receipt is delivered immediately by SMS to your phone apart from the Bank SMS alerting you to the transaction.