Currency Demonetisation and Future course of Indian Economy

Bart S · Post by **Bart S** » 05 Dec 2016 13:11

sum wrote:
"Due to demonetisation, labourers, farmers and traders have been ruined and people are losing their jobs, but PM is busy with changing dresses several times. Modi ji whatever you say, you should implement it first on you," he said.
Either the guy has gone full retard or there is something Chank-ian in this game-plan which simple folks like me cannot decipher.

Since i cannot imagine what sense this statement is supposed to make and who is supposed to cheer in support of it ( other than the usual suspects)

Basically, there is nothing logical or factual that they can say against it. And they have no choice but to oppose it. Hence the rubbish that they are spouting. There are people who want to believe that stuff, and they are the intended audience.

Bart S · Post by **Bart S** » 05 Dec 2016 13:20

g.sarkar wrote:
http://www.firstpost.com/business/demon ... 39942.html
Demonetisation: How Narendra Modi changed the currency ban narrative
Dec 5, 2016 10:11 IST
Prime Minister Narendra Modi addressed the nation on November 8, 2016 to announce the withdrawal of Rs 500 and Rs 1,000 notes.
The speech (in English) lasted 25 minutes. The Prime Minister uttered the phrase “black money” 18 times in this speech. He mentioned “fake currency” or “counterfeit” five times in the same speech.
It was unambiguously clear from the Prime Minister’s speech that the primary motivation for the sudden withdrawal of nearly 86% of the country’s currency was the evil of black money.
The next day, the papers termed it a “war on black money”. PayTM, a mobile payment app, hailed the decision with a full-page ad and the Prime Minister left for Japan.
By the time the Prime Minister returned from Japan, the move had been christened “demonetisation” in English, “notebandi” in Hindi and there was a war-time like rationing of currency in the country.
The Prime Minister made six speeches across the country on the demonetisation policy between November 13 and November 27, including his radio address to the nation, Mann Ki Baat, according to data available on the Prime Minister’s personal website. The text of all the speeches are available on the website.
A data analysis of the speeches (after translation) reveals a shifting of the narrative of the demonetisation action and its objectives.
.....
Gautam

That article has flawed logic. PM is not changing the narrative, he is tailoring the narrative to the audience that he is speaking to, and that makes sense since different demographics have different priorities, and this is a net win for most of the country on various different counts. For example:
[*]Security conscious people are happy about hawala and FICN being tackled
[*]Young, educated people are upbeat about going digital and cashless
[*]Banks see re-capitalization and some erstwhile NPAs being paid up in full
[*]Local government services are flush with payments on various fees and levies, for the first time in decades
[*]Legit businesses see sustained economic growth and upturn in a few quarters
[*]People who want to see less corruption and thuggery in politics are happy that most political parties have lost their illegal hoard of cash
[*]People who invest in mutual funds and other investment avenues other than BM-fuelled real estate speculation/manipulation and other rent-seeking methods are happy that legit investment aspects are getting a fillip
[*]Ordinary people in general are happy to see BM hoarding parasites squirm
[*]BPL people with JDY accounts would be happy to see PM tell them not to pay back funds to BM hoarders

So there are a lot of different people to whom different aspects of demonetization appeals, and Modiji is doing the right thing by highlighting the aspects most relevant to his audience.

ArmenT · Post by **ArmenT** » 05 Dec 2016 13:22

From a post on page 97:

rahulm wrote:In Gurumurthy's lecture linked on page 91, he calls DeMo 'Financial Pokhran'

For the non Tamil people, Any chance anybody can post a brief summary of his answers in Tamil, particularly on the Rs 2000 note ?

Thanks

You ask, I translate (warning: not ethnically Tamil myself and I'm kinda tired too, so some translations are definitely off):

at 1:34:00
Q. 2/3rds of 1000s don't come back and 1/3rd of 500s don't come back to RBI. Why has Rs. 2000 denomination now been introduced, it would only help in hoarding.
A. (First he just restates the question back). The truth is we don't have ability to print enough Rs. 50 and Rs. 100 notes to replace the Rs. 500 and Rs. 1000 notes, that's why the Rs. 2000 notes are printed and this is only an "interim measure".

Q. One of the potential sources of black money and its accounting is political donations. Will the central leadership move to contributions by cheques alone and subject itself to scrutiny under the RTA act? There is also another question...yeah
A. The most important matter here is that in our country, for many years, it has been that election candidates have to be taken care of, healthy etc. Some citizens have been thinking that we should allocate each candidate a certain amount of money from election funds and conduct the election that way, just like the German model. But we haven't thought about doing this in our country in a fair way. In our country, we have a lot of bigwigs. Our prime-minister has talked about this... something about putting an small election tax like we have a road tax, and how to distribute this election fund among the parties, especially when every municipal level party claims it is a national level party (laughter from audience). I have a friend, Devi Lal, you might have heard of his name, he was the CM of Haryana and a close friend of mine. I've travelled the whole of Haryana with him. One day he told me, "Four parties are going to merge, one of them is a Kerala party under Unnikrishnan. They call them the "auto party" because the entire party members can fit in one autorickshaw (laughter from audience), and then there's the "bus party" because all their membership can travel in a single bus. These parties want to merge with me." And there are several small parties, each with a letter head and a visiting card. Do you know how many political parties there are in Tamil Nadu? About 650. There are at least 100 parties using Ambedkar's name alone (laughter). Due to this, telling which political party is state party, which is national party, which is regional party, how to give each one television time, this will need us to change the entire mode of conducting elections. That's what the PM has talked about, we need to think seriously about how to change these things.

Q. It has been reported that there has been a spurt in bank deposits of over 3 lakh crores in the last fortnight of September 2016. Has it been probed into and if so, can the Govt. come out with details.
A. I have some details (reaches for notepad and walks back to podium). During August 2014-Aug 2015, 9 lakh crores have been deposited, 9.2 lakh crores actually. In the corresponding period of Aug 2015-Aug 2016, it has been 8 lakh crores only. There has been a shortfall in deposits that have come and it has also been noted that there has been a huge release of funds by the pay commission, which has also gone into it. I'll only make one point, no one can survive these conditions. So I wouldn't worry about it, don't take Arvind Kejriwal and his sayings too seriously (laughter).

Q. According to RBI, 60% or 14 lakh crores has been deposited in the banking system already. How much more do you expect will come by Dec. 31st and if more than 80% comes back in the system, can this exercise be termed as fruitful?
A. Even if 16 lakh crores comes back, this is a success. Because it has turned this black money into white money. Otherwise it is just unrecorded, unmonitored money. That's why the fact that this money is coming back into the banking system is a big matter. Secondly, it is now hard to support this black money wealth. Black cash supports black wealth. In order to stop this, now once this cash comes into the banking system, it is now turned into recorded cash. Whose name it is under, even if it is benami cash, there is a record that it is under someone's name. This is the first matter. Second, no matter whatever reason this cash is deposited under, it will form monetary surplus for reserve bank, whether 1 lakh crore, 2 lakh crore, 3 lakh crore or whatever, I don't know. How much they have burned, how much they have thrown in the garbage, I don't have any accounting for that at the moment. Therefore I won't know how much money will be deposited until the last day. There are plenty of chartered accountants around to help convert black money to white. Therefore, only at the end will the Govt. know how much is going to show up.

Q. 2.5 lakh allowed for withdrawal for weddings. This is slightly strongly worded, so I'll reduce the intensity. Can marriages be performed for 2.5 lakhs today?
A. I had sent a tweet about this topic before. If two people agree, they can still transact even today with old Rs. 500 and Rs. 1000 notes. If you can deposit upto 2.5 lakhs under a single person's name until Dec. 31st, then you shouldn't have any problem accepting those notes. I know of one case. One lady, with a lot of difficulty, saved up about 42 lakhs for her daughter's wedding, now didn't know what to do with her cash. I told her with the new 2.5 lakh rule in effect, round up about 10-20 people, give them 2.5 lakhs each under their name and conduct your daughter's wedding that way. However, when this type of question comes up, instead of thinking how to get around this cleverly, people think "aiyiyo, this has now happened". In approx. 1 lakh real estate transaction, no. 2 money has exchanged hands. Now they don't know what to do, they don't know how to execute this transaction. This type of case has also come up.

Q. What is the parameter that will define India's growth in the coming years. GDP, Employment or anything else?
A. Looking at GDP as an absolute number, especially after 2004, the GDP growth figure has been a misleading number and an illusion that we've been fooled by, everyone knows about this. But nobody has been ready to talk about this. No major paper writes about this, only some small articles here and there that we don't have jobs and haven't created jobs. Since Narendra Modi came to power, they have been writing "Where are the jobs Mr. Modi" type articles, there were no such articles when Manmohan Singh was in power. He is important man, so no one wrote articles about that then. But the truth is he didn't create job opportunities either, in fact they decreased under his period, but no one wrote about this. We can ask Narendra Modi (some stuff here), even if it is Narendra Modi, Inder lal, Chanderlal or whoever leading... unless the growth shifts to real growth and not inflationary wealth effect growth, there cannot be jobs. That is this demonetization's top effect.

Q. What work should a true citizen do?
A. It would be good to be someone like Nitish Kumar (laughter). (missed a bit about his banter about Congress party)

Q. By making a cashless economy and formalizing all economic activity, are we not providing access to foreign bank forces to control and handle our economy?
A. Cashless economy is not possible. It is fine for a small country like Sweden, but in a larger country like America, there is still cash transactions. In our country, we can never have cashless transactions. We can have minimum cash economy, we can have needed cash economy, we can avoid surplus cash economy, we need to have policy for RBI, taxation officals, bankers. Without that, we can't blindly transform from a cash economy to a cashless economy. Even the prime minister has said this: "Cashless economy is not possible overnight". Cashless economy, even in America, it is a dream. 7.5% of the American GDP is in the form of cash, that's why this won't happen. We must look at it from a practical viewpoint. This won't happen no matter which government is in power, they cannot stop cash economy.

Q. The time given upto 30th December 2016 to deposit demonetized currency seems to be longer, giving time to black money holders to devise various ways to launder their black oney. Can't they reduce the window period now?
A. (Something about remonetization leading to demonetization). This is one of the explicit reasons why our printing press capacity could not be enhanced. If they had enhanced it, there would have been questions raised about why they are doing this. That's why they could not do it. Because they didn't do it, that's why they had to give this extra time instead. Otherwise we could have wrapped it up by Nov. 30th. Because we don't have the capacity to prepare extra notes.

Q. Who are the experts and economists behind the prime minister in taking this historic decision?
A. I don't think there are any economists behind this. (laughter). There isn't any economist who will think of this type of policy decision. It is only a person ignorant of economics who can come up with this. Because anyone who knows economics is taught, "Don't ever do something like this. Just let things go the way they are, otherwise bad things will happen".

Q. The interaction between RBI and govt. Is it going to change now?
A. I think it has only beginning to start now. Until now, I don't know of any interaction happening. Previously they used to give yearly lectures, reason being, they don't really understand our country (laughter). When coming from abroad and trying to understand this country, when Mahatma Gandhi returned from abroad, Gokhale advised him "you've been abroad for a while, you don't really know much about this country, you should spend one year touring this country. After touring, you'll understand what to do here, until then, don't open your mouth". Mahatma Gandhi started touring this country in suit/boots and ended the tour wearing a "mundu" (dhoti). Reason being that understanding what this country is about, his outlook, how he walked, how he talked etc. changed. He could never associate with anyone in this country wearing suit/boots and that's why he ditched them. You cannot really understand this country without touring it, that is also my belief. ... snip .. I've been advisor to many big groups and organizations in this country, but they don't know how to handle this new tsunami, big confusion everywhere. Then I said we should tour this country just like Mahatma Gandhi did and see what happens. Started in Punjab, ludhiana, batala, amritsar, rajkot, jamnagar, morbi down to thootukudi, went to 46 industrial clusters and that's when I realized that there is no relationship between this country's (couldn't translate this bit).

( Large number of questions here/ Do you have any others in Tamil / Nope, only the one I asked earlier/ Banter about questions in Tamil vs. English and a command from Tuqluq magazine to speak in Tamil only. And he replied something about some people are happy only if they talk in English. So speech in English and hoping questions would be in Tamil and how in this country, if you don't speak English, people think you're uneducated. It would be nice to have questions in Tamil, blah blah, dog bites man, no news, man bites dog, big news, role of media in anecdotal news blah blah blah until post speeches + National anthem)

Sachin · Post by **Sachin** » 05 Dec 2016 13:24

Mean while in Kerala...

Rs 59 cr unaccounted money reaches Kochi from Bulgaria......:
Seems to be the biggest haul from KL at the moment.. .
Demonetisation layoffs: Bengalis leaving Kerala in droves......

hnair · Post by **hnair** » 05 Dec 2016 13:27

Bit off the board due to travel. But this sort of claims of smuggling in gold is not kosher for this forum:

TKiran wrote: I hoard gold. In fact every time I visit Shanghai, I buy 10 GM 99.9% gold from people's bank of China, promptly paying tax, (it comes to around 17% tax). Still it is cheaper than buying 22 carat gold in India. I have proper receipts. As you know I hate the tax guys in India, though I am within the legal limits, I mix the coins with other 1RMB coins and nobody catches me when they scan. The business man has to be very dynamic and very emotional. This is my Dharma.

After scrolling back, I find that you have been trolling quite a bit on these topics, despite warnings. Plus you already had two past warnings by admins. Off for a month

Subdas · Post by **Subdas** » 05 Dec 2016 14:19

if u are employed by corrupt business then you need change your skill and get employed in honest business. The reason we see no riots on the streets, inspite of people loosing their jobs due to note-bandi, is because even the workers are blaming their corrupt employers for their fate. If u are in a BURNING LANKA then you need to migrate ASAP and not stay put thinking that the fire will stop.

Gus · Post by **Gus** » 05 Dec 2016 14:27

Sachin wrote: Seems to be the biggest haul from KL at the moment.. .
[*]Demonetisation layoffs: Bengalis leaving Kerala in droves......[/list]

curious..is that because most of their employers were giving out BM or FICN and are now strapped or is it some sort of rumor mongering going on among them??

shiv · Post by **shiv** » 05 Dec 2016 14:40

Pouffe.. (del)

RajeshG · Post by **RajeshG** » 05 Dec 2016 14:45

This is interesting - i missed this. Apologies if posted before.

http://m.firstpost.com/politics/demonet ... 04572.html

pankajs · Post by **pankajs** » 05 Dec 2016 15:02

^
This is very very strange on three counts.

1. GOI is not targeting 1.25 cr people but more importantly 1.25 cr folks do not feel targeted. But spinning a negative narrative is important to media.

2. Another thing that is very noticeable in all such farts is that they keep emphasizing *chaos*.

3. Recovery of black money is one very important objective of the note swap, no doubt about that, but it is one amongst *many* objective. But of course if negative narrative spinning is the sole objective then the focus has been kept on just one aspect where the presstitute hope to get the maximum purchase.

JayS · Post by **JayS** » 05 Dec 2016 15:40

RajeshG wrote:This is interesting - i missed this. Apologies if posted before.

http://m.firstpost.com/politics/demonet ... 04572.html

LOL. THe values written in the article are correct or its my eyes which gone bad.

The agricultural income the article mentions of 874 lakh Cr in 2011 and 2012 is approximately equal to 16Trillion USD which is US GDP considering avg 50Rs conversion rate from that era. Even by INR value, its like 6-7 times current India's GDP.

Someone screwed up with the zeros big time or what...

Denis · Post by **Denis** » 05 Dec 2016 15:58

shiv wrote:
vina wrote:
Oh, you CAN use Pockets with Uber and Ola. All you have to do is check the "Card" option in Uber & Ola and enter the visa card detials associated with Pockets and you can use it in every place where a card is accepted, including online.
Did not work for me. That is why I was forced to install Paytm. Uber does not recognize that number as a valid Visa card. Have you actually tried it for Uber specifically?

I do not like parking my credit card numbers in various online portals and that is why I thought the Pockets Visa would be a good idea. I spent about 4 hours (during a wedding yesterday) trying all sorts of tricks to get money from pockets to Uber, including the Pockets Visa card which I tried several times. No go

Hakeemji, Pockets is not the UPI application by ICICI. It is the iMobile. Please get it installed. It has one of the options of UPI apart from the normal mobile banking options. Through this UPI option, you can pay through QR code, your ICICI net banking, debit or credit card without sharing anything to third party. Better than e-wallets like PayTM or POCKETS.

Bart S · Post by **Bart S** » 05 Dec 2016 16:07

Denis wrote:
shiv wrote: Did not work for me. That is why I was forced to install Paytm. Uber does not recognize that number as a valid Visa card. Have you actually tried it for Uber specifically?

I do not like parking my credit card numbers in various online portals and that is why I thought the Pockets Visa would be a good idea. I spent about 4 hours (during a wedding yesterday) trying all sorts of tricks to get money from pockets to Uber, including the Pockets Visa card which I tried several times. No go
Hakeemji, Pockets is not the UPI application by ICICI. It is the iMobile. Please get it installed. It has one of the options of UPI apart from the normal mobile banking options. Through this UPI option, you can pay through QR code, your ICICI net banking, debit or credit card without sharing anything to third party. Better than e-wallets like PayTM or POCKETS.

Boss, pockets is from ICICI and it does support UPI. It fills a different niche from iMobile, though both have significant overlap and common functionality. I see iMobile as more of an app to operate my ICICI accounts, whereas Pockets is more generic and useful as a payment tool.

Sachin · Post by **Sachin** » 05 Dec 2016 16:24

Gus wrote:curious..is that because most of their employers were giving out BM or FICN and are now strapped or is it some sort of rumor mongering going on among them??

My take would be that it would be black money which is now not available. FICN most likely would not be the case, even though the K.P suspects that most of the FICN entering the state are through these Bengali (Bangladeshi) labour. More over many of these folks also work in the real estate area as construction labour. That sector has been facing a downward trend in KL, for the past one year (even before demonetisation).

RajeshG · Post by **RajeshG** » 05 Dec 2016 16:30

Googling around and found an article written by Mr Vijay Sharma ( ex-IRS, now retired ) who filed the RTI request.

https://www.thequint.com/india/2016/03/ ... ral-income

This gives rise to a bona fide suspicion that illegal gains (and clearly not agricultural income) from undisclosed sources are being laundered through the route of agricultural income and unscrupulous people are laundering their ill-gotten black money without paying taxes. If this income is subjected to tax, the taxes for the year 2010-11 would be around Rs 600 lakh crore , i.e. over 6 times the GDP of the country that year.

Yet another significant factor which needs to be flagged here. Around the same time, the government received information regarding black money of several Indians that was parked in foreign accounts and enquiries were initiated. After much delay, when the said bank accounts were finally reached, it was found that the money had mostly been withdrawn. It appears to be too much of a coincidence that there is tremendous spike in the declaration of agricultural income during the same period.

Jaitley seems to have responded to the uproar in parliament

http://economictimes.indiatimes.com/new ... 059559.cms

Responding to Yadav, Finance Minister Arun Jaitley said authorities are investigating tax evaders that include some "prominent names" and urged the opposition not cry "political victimization" when they are prosecuted. He didn't name names.

There is also this quote from the same article.

The figure was the result of a Right to Information request by a former tax officer Vijay Sharma, who says the number is probably a computation error and should be closer to 1 percent of GDP or $20 billion. Several requests for clarification from the government have gone unheeded, which pushed him to approach the courts. In the nine years through March 2016, Indians declared $21 billion as agricultural income, according to provisional data from the Revenue Department. The confusion, however, und ..

rahulm · Post by **rahulm** » 05 Dec 2016 16:33

@ArmenT much appreciated. Thank you

Elsewhere in the form, in the past a few have lamented about jobless growth (Asset price increase - increased wealth-increased GDP) in india. These people were hectrored and hounded by many. gurumurthy has vindicated their stand.

In latest news Govt depts must make all payments above Rs 5000 through e-Payment: Finance Ministry. Great but why not also pass an ordnance that all govt depts must also accept receipts from public above say Rs 500 via e-payment ?

The Gurumurthy lecture @Shastra is a master class. The only issue I have is his praise for the relation [sic] [ship] based economy. I feel it creates more issues than it solves.

pankajs · Post by **pankajs** » 05 Dec 2016 16:41

RajeshG wrote:Googling around and found an article written by Mr Vijay Sharma ( ex-IRS, now retired ) who filed the RTI request.
The figure was the result of a Right to Information request by a former tax officer Vijay Sharma, who says the number is probably a computation error and should be closer to 1 percent of GDP or $20 billion. Several requests for clarification from the government have gone unheeded, which pushed him to approach the courts. In the nine years through March 2016, Indians declared $21 billion as agricultural income, according to provisional data from the Revenue Department. The confusion, however, und ..

I am not going to read the linked article but only going by the quotes.

So we have $21 billion laundered by 8 lakh farmers, assuming ZERO real agri income for the year/years in question, a big assumption by itself. How much does that come to per farmer?

This is the problem with agenda driven ~~reporting~~ farting. In their single mindedness to condemn Modi GOI they do not even do the basic arithmetic and even less thinking.

Marten · Post by **Marten** » 05 Dec 2016 16:46

TKiran wrote:snip... Shiv saar, "Little Professor Syndrome" could be the closest to my 'Pisko Profile'. you can analyze that. Donald Trump also has the same syndrome.

Sorry, but whatever you are doing -- smoking or chewing or whichever dreamworld you inhabit to make up for the lack of real world success -- is not working out too well. Please stop being Ajit Vadakil here.

A_Gupta · Post by **A_Gupta** » 05 Dec 2016 17:22

If the mountain won't come to Mohammed:
(this is from March 2016, long before demonetization)
http://www.thehindu.com/news/national/f ... 371424.ece

Believe it or not, income figures shared by the Income-Tax Department in response to an RTI application by a retired Indian Revenue Service official has revealed that agricultural income recorded an exponential increase from 2004 to 2013, touching a total of almost Rs.2,000 lakh crore for individual assessees in 2011.

The agricultural income earned by the 6.57 lakh assessees who filed returns in 2011, at nearly Rs. 2,000 lakh crore, is over 20 times the country’s gross domestic product of over Rs. 84 lakh crore at the time, according to the Income Tax Department data shared under the RTI Act. Notably, agricultural earnings are exempt from Income Tax.

Retired IRS official Vijay Sharma — who filed RTI application to the Income-Tax Department — has now moved the Patna High Court seeking further investigations into the matter, raising suspicion that income from undisclosed sources are being shown as agricultural income to evade tax.

“The other possibility may be that illegal money or black money income is being laundered in a large scale and brought into the white economy. It requires deep investigation,” Mr. Sharma told The Hindu. He said the next date of hearing on his PIL plea was in April.

“I had got these details from the Income-Tax Department through an RTI reply last April. Since then I have been writing to the Central Board of Direct Taxes seeking a probe into the matter. Till now, no agency has contradicted the information. In fact, in the Rajya Sabha, the Finance Minister on Tuesday also did not contradict the figures,” said the 1976 batch IRS official.

Gus · Post by **Gus** » 05 Dec 2016 17:44

^ In my area, we have always known that the huge increase of agri land - from ~5 lac an acre to ~40 lac now in 15 years - is backed by BM.

I know some small farmer with 4 or 5 acres not able to hold on due to 1. pressure to sell, 2. nobody to do agri as sons have migrated and labor cost increased , 3. not enough income ---- they all sold, I am sure a big component was BM routed in.

around 2010..I was inquiring if I can buy a few acres , exploring some farming ideas and I was laughed at when I said I have around 15 to 20 lacks. Tucked my tail and ran away from that idea.

hanumadu · Post by **hanumadu** » 05 Dec 2016 17:48

If you watch Modi's Moradabad movie, he repeatedly says, "I asked you for 50 days". It lends even more credence to the theory that he wanted the time to push India towards digital payments. Combined with the news that new 20 and 50 bills will be introduced and old bills are being taken out of bank vaults, it seems even more likely.

vina · Post by **vina** » 05 Dec 2016 17:49

Two things that I haven't used before DeMo , now actually being used.

1. USSD Interface : i.e. to make payments electronically when there is no internet (like in some remote area) or in highway where there are gaps. Basically what as advertised you need to do is dial *99# on your keypad (on any GSM phone, for me the 2nd card is a vodafone 4G card that is now for voice only, now that the Rel Jio card is running free on slot 1).. It comes up with a text interface. I have an IOB account also, and as I was looking around in Chacha's play store on what they have for payments, I find that they have a very nifty UI called *99# , built on top of the text USSD interface. That is such a cinch to use with the smart phone . So basically you can do via a nice App UI what you need to do with USSD if you dial the code manually. Works great, doesn't need a data connection, costs Rs 1.5 per use and you can do pretty much everything that a full fledged UI data/based UPI app can do. Did a transfer to someone using that. Works well. I just hope EVERY bank comes up with a UI (including multi language option) layered on top of the *99# service for use without internet , like what IOB has done. Will make life much simpler for everyone. They should promote this universally over the UPI which needs data connection.

2. Wallet /Pocket : Just got back home (typing this from home) after riding Uber from the Cunningham Rd thereabouts. Accepted the booking using the Pockets - visa card , no fuss, accepted the cashless payment when the driver concluded the ride, I came home, opened the Uber App, where the Pay Now button was up for the ride, I pushed the button, it took me to the visa payment gateway, punched in the 3D password and it was done. Oh, another point , the payment processor for Pocket was actually MobiKwik ! I have a nagging suspicion that the ICICI Pockets - Wallet payment part is just MobiKwik "White Branded" along with the the rest of the functionality thrown in . Nice. This is unlike the UPI, where a payment request comes and you okay it. Here it just like using a credit card. You have to okay it along with a password before the billing happens.

Just took the kick on the backside to actually getting to use the stuff out there. Until very recently, I was paying for cab and auto rides with cash. Now with e-Wallet onree. Also, saw one of my cousin's kid ( 21 or so) , book an Ola Auto in Madras for my cousin via Ola Wallet and it got paid when the journey was complete. No more bargaining with the notorious auto wallah and him demanding extra payment / haggling / cheating on change (I always found getting a Rs 5 back from them close to impossible).

So all in all Piss and Plogless onree. Next time I am in Madras, I probably will no dare get into an auto!

RajeshG · Post by **RajeshG** » 05 Dec 2016 18:15

Thanks Arun. I didnt find that link. Just to clarify the numbers are for financial years 2011 and 12 when PC was the FM. I havent seen any statements from him. Its interesting to say the least.

Not related to this but also ran into white paper on black money (released by ministry of finance) which folks might find interesting.

http://www.prsindia.org/uploads/media/W ... ey2012.pdf

hanumadu · Post by **hanumadu** » 05 Dec 2016 18:24

A_Gupta wrote:If the mountain won't come to Mohammed:
(this is from March 2016, long before demonetization)
http://www.thehindu.com/news/national/f ... 371424.ece

The agricultural income earned by the 6.57 lakh assessees who filed returns in 2011, at nearly Rs. 2,000 lakh crore, is over 20 times the country’s gross domestic product of over Rs. 84 lakh crore at the time, according to the Income Tax Department data shared under the RTI Act. Notably, agricultural earnings are exempt from Income Tax.

There is something seriously wrong with the numbers and as such does not provide any useful information.

SRoy · Post by **SRoy** » 05 Dec 2016 20:44

I am posting this in full. Kolkata is THE hub for money laundering, black marketeers and fake currency distribution.

Telegraph article ... they have scored a self goal while trying to do scare mongering.

THE DEMON-ETISATION DEVASTATION

JEWELLERY - 40-50% drop

The jewellery business has gone pale in the past few weeks.Compared with other years, sale this season is down by “40-50 per cent” at Senco Gold & Diamonds. “We are focusing on lightweight jewellery (Rs 20,00-30,000 segment). Leisure buying is on pause,” said Suvankar Sen, executive director, Senco Gold & Diamonds. For Siddharthaa Sawansukha, CEO, Sawansukha Jewellers, demonetisation has hit where and when it hurts. “Jewellery shopping has been hit by 50 per cent for sure and this is one of the seasons of highest expected sales. We are hopeful of things getting better in 2017, but at the moment everyone is suffering.”

CARS - 30% drop

The wheels are turnin’ slowly in the automobile sector. Even mass-market players Maruti and Hyundai are feeling the blues as demonetisation enters its second month. “There has been a substantial drop in sales since November 8,” said a Maruti official. “Calcutta has been hit worse than Delhi or Mumbai. It is the smaller metros that have been hit more. And within Bengal, upcountry has taken a bigger dip, about 40 per cent compared with Calcutta’s 34 per cent.”Maruti, which sold 4,000 units on average per month in Bengal, has retailed 2,400 units in November 2016.Hyundai is putting the impact at 30 per cent. Renault’s runaway success and serious competitor to Maruti’s best-selling Alto, the Kwid, is down 30 per cent.In the premium segment, Jaguar has seen a 30 per cent fall. “People are cancelling their bookings without citing any reason,” said Vedant Agarwal, at the only Jag dealership in Calcutta. Tiago, the hatchback launched by Tata Motors, is struggling. “Tiago is down 30 per cent in November,” said a Lexus Motors official.

CONSUMER DURABLES - 50+% drop

The bleed is very visible on the ground floor of Great Eastern Electronics’ flagship store in Dalhousie. Not a single customer was around when Metro dropped in on Saturday afternoon. Most of the display TV screens were switched off.
“We are used to selling 15-20 TVs a day during lean periods. But since November 8, selling five TVs a day is a big deal. There have been days in the past few weeks when we’ve sold barely a couple,” said an employee.Moloy Sarkar, the manager of the company’s adjoining store selling refrigerators, washing machines and microwaves, said sales were down by 50 per cent or more — “the average daily figure has crashed from around Rs 3 lakh to Rs 1 lakh-1.5 lakh”.
Manoj Khosla, one of the owners of Khosla Electronics, also complained of a 50 per cent dip in sales in its stores in the city and on the outskirts. “Our cumulative target across stores for November was Rs 35 crore. We ended up selling less than Rs 17 crore.”All products — TV, fridge, microwaves etc — have taken a hit, said Manoj. “Customers have developed a fear psychosis. The government must do something to counter this.”

MOVIES - Sharp drop at single screens

Going for a film is a feel-good exercise that takes a hit in a feel-bad time.At Menoka, by the Dhakuria Lakes, business is in the red. “With little or no cash in hand, entertainment is the last thing on peoples’ minds,” said proprietor Pranab Roy, pegging the drop at 70 per cent. “Most of our patrons pay by cash, with plastic money and Paytm used by a select few. For them, keeping cash for emergencies is more important than using it to watch a film,” added Roy. Another big hitch? “We are not being able to provide change when people are coming in with Rs 2,000 notes… that’s brought down business further.”At multiplexes, the impact of demonetisation was primarily felt in the first week, with “poor content” — read, Rock On!! 2 – also keeping people away from cinemas.However, INOX said that the situation has improved with Dear Zindagi bringing in footfall. “Dear Zindagi and now Kahaani 2 have ensured that the drop in footfall over the weekend may be just about five-10 per cent,” said Subhasis Ganguli, regional director (east), INOX.

RESTAURANTS - 30% drop

Demonetisation has left a bad taste in the mouth of the food and beverage industry that had been booming earlier this year. Industry insiders are hinting at an average 30 per cent drop in the overall turnover for the month of November.
“Our restaurants have been hit by 25 to 30 per cent. Though our restaurant sale is almost 70 per cent credit card, even then it has been hit badly,” said Anjan Chatterjee of Speciality Restaurants Ltd, which owns restaurants such as Mainland China, Oh! Calcutta, Cafe Mezzuna, Hoppipola and Sigree.For Harsh Sonthalia of Gabbar’s Bar & Kitchen and Mumbai Local, “there has been a drop of at least 30 to 35 per cent in sales revenue”. Less people are going for binge-drinking, with “spending on alcohol nose-diving,” added Harsh. For caterers like Savourites, who also own 6 Ballygunge Place, the non-wedding catering orders have plunged by “at least 50 per cent”. “Most of our clientele pays by card but even then, the overall business has been hit by at least 30 per cent in November,” said chef-owner Joymalya Banerjee of Bohemian.

PARTY - 30% drop

It’s that time of the year when the nightclubs should have been blasting Abhi toh party shuru hui hai. Instead, they are in Breakup song mode, in the true sense of the term.“There have also been cancellations of private parties, especially bachelor parties because people want to cut costs. So far, we have seen a drop in sales of about 20 per cent. To fight demonetisation and attract footfall, we have restarted our happy hours from 6pm to 10pm, with a 1:1 offer on select drinks,” said Vicky Metharamani, director, Myx.At Black lounge in Aauris hotel on Robinson Street, the party crowd has dropped from around 300 on a Saturday night to 200. “And the guests are hardly spending on drinks or food,
so sales have gone down 30-40 per cent,” said Dimple Saini, director, Aauris hotel.

EVENTS & MUSIC GIGS - 70% drop

This is when event managers should have been going crazy with too many things to do. Instead, they are going crazy with too few things to do.The turnover at The Main Event, an event management company involved in organising social and charitable events in Calcutta, has suffered a “70 per cent” decline. “Demonetisation has crippled small- to medium-scale business like us the most in the last month. An acute shortage of cash has not only shrunk the economy but also resulted in a slowdown in the overall functioning of our event management activities. We have quite a few workers and daily-wage earners who rely heavily on cash payments for several day-to-day jobs,” said Neeraj Kapoor, the company’s CEO. Music events in Calcutta are hitting the wrong notes. “We were about to announce a music festival in January, but after the demonetisation announcement some of our major sponsors backed out. They are waiting for the market to stabilise, and then replan,” said Nishit Arora of Jamsteady. College fests are being postponed because of the lack of cash flow, said Kinjal Bhattacharya of E365 Media Solutions.

One then reaches a simple conclusion that jewellery buyers, electronic gadget buyers, even movie goers were spending money gotten from questionable sources which has vanished now.

All these high purchases or luxury (movies in multiplexes and restaurants) which caters to a population that has sizeable disposable income, bank accounts and obviously means to undertake electronic transactions. If they feel squeezed, it means the consumption driven industry segment was inflated due to black money and these thieves now must undertake price correction.

shiv · Post by **shiv** » 05 Dec 2016 21:28

hanumadu wrote:If you watch Modi's Moradabad movie, he repeatedly says, "I asked you for 50 days". It lends even more credence to the theory that he wanted the time to push India towards digital payments. Combined with the news that new 20 and 50 bills will be introduced and old bills are being taken out of bank vaults, it seems even more likely.

After failing to get a mobile wallet to work for a long trip on Uber yesterday and paying cash I was beginning to think about how to get small denomination notes for day to day cash expenses. SHQ went to bank and found zero queue and presented a cheque for withdrawal - and was shocked out of her wits to see a sight we have not seen for a while - a bundle of Rs 50 notes.

shiv · Post by **shiv** » 05 Dec 2016 21:30

SRoy wrote:
One then reaches a simple conclusion that jewellery buyers, electronic gadget buyers, even movie goers were spending money gotten from questionable sources which has vanished now.

All these high purchases or luxury (movies in multiplexes and restaurants) which caters to a population that has sizeable disposable income, bank accounts and obviously means to undertake electronic transactions. If they feel squeezed, it means the consumption driven industry segment was inflated due to black money and these thieves now must undertake price correction.

I think cars and restaurants will bounce back. Parties/event management and jewellery will stay hit. For a while..

SRoy · Post by **SRoy** » 05 Dec 2016 21:47

For automobile industry, one cannot be sure. Entry and mid price segment doesn't seem to be affected except some caution, but the luxury segment is hit very bad. A Audi showroom is on the way to my office, for last couple of weeks absolutely empty.

Some restaurants will be hit. The ones usually funded by black money with atrocious price tags on the menu. They are squeezed at the both ends.

srin · Post by **srin** » 05 Dec 2016 21:52

Two ATMs (one of Canara and one of IndusInd) just outside the apartment complex are down (half-shuttered) for a month now. My feeling is that Govt missed a trick by allowing other-bank account holders withdraw money from any ATM. If the Govt had re-enforced restrictions on other-bank ATM cards after the first couple of days, then an account holder could have held his bank responsible.

Now, it is a "tragedy of commons" in a sense - every bank is responsible to stock ATMs, so no one is really responsible.

Suraj · Post by **Suraj** » 05 Dec 2016 21:55

This deflation in price due to drop in demand is good for the consumer . They no longer compete with the invisible black hand . There's no longer a big fish behind the scenes skimming off part of your money to add to their black money stash .

ManSingh · Post by **ManSingh** » 05 Dec 2016 21:59

vina wrote:Two things that I haven't used before DeMo , now actually being used.

1. USSD Interface : i.e. to make payments electronically when there is no internet (like in some remote area) or in highway where there are gaps. Basically what as advertised you need to do is dial *99# on your keypad (on any GSM phone, for me the 2nd card is a vodafone 4G card that is now for voice only, now that the Rel Jio card is running free on slot 1).. It comes up with a text interface. I have an IOB account also, and as I was looking around in Chacha's play store on what they have for payments, I find that they have a very nifty UI called *99# , built on top of the text USSD interface. That is such a cinch to use with the smart phone . So basically you can do via a nice App UI what you need to do with USSD if you dial the code manually. Works great, doesn't need a data connection, costs Rs 1.5 per use and you can do pretty much everything that a full fledged UI data/based UPI app can do. Did a transfer to someone using that. Works well. I just hope EVERY bank comes up with a UI (including multi language option) layered on top of the *99# service for use without internet , like what IOB has done. Will make life much simpler for everyone. They should promote this universally over the UPI which needs data connection.

Don't know. Hence asking. How does the ussd thing work? Do they ask for anything like login credentials, pin etc. AFAIK, USSD is simple 7-bit or ucs2 encoding i.e. no security. This wont be very reassuring yo me atleast

shiv · Post by **shiv** » 05 Dec 2016 22:01

Suraj wrote:This deflation in price due to drop in demand is good for the consumer . They no longer compete with the invisible black hand . There's no longer a big fish behind the scenes skimming off part of your money to add to their black money stash .

I'm reading that real estate has taken a hit and there was one guy who said "I have been trying to sell my house and used to get 3-4 calls a day. But now not even one"

This guy will have to drop his price before calls start picking up.

shiv · Post by **shiv** » 05 Dec 2016 22:09

ManSingh wrote: Don't know. Hence asking. How does the ussd thing work? Do they ask for anything like login credentials, pin etc. AFAIK, USSD is simple 7-bit or ucs2 encoding i.e. no security. This wont be very reassuring yo me atleast

Try *99# yourself if you are in India.

The only thing that worked for me was "check balance". And in any case the menu items listed for me were numbered 1, 2 3 and 7.
4, 5 and 6 were missing

Now not working at all

Karan M · Post by **Karan M** » 05 Dec 2016 22:16

Got my visa pockets card today. Yoo hoo. What i always wanted. 10k cash limit. Safe, less chance of fraud.

Karan M · Post by **Karan M** » 05 Dec 2016 22:17

One bit of care though. Think twice before choosing name on card. Once you put in request via app, you have no chance of changing your submission per their customer service ppl.

Suraj · Post by **Suraj** » 05 Dec 2016 22:17

shiv: RE is an easy guess for the biggest changes due to DeMo . Large ticket prices . Low typical liquidity. Now reduced to zero liquidity . Plus real panic due to Modi's threats to follow up with vigorous enforcement of Benami Act next .

But a lot of other things will also see improvement . For example the mundane onion or dal prices rising rapidly - those incidents won't happen without BM . Sure demand supply changes prices but hoarders were skimming money off everyone at such times . Such price arbitrage was the basic means of generating return on black money .

ManSingh · Post by **ManSingh** » 05 Dec 2016 22:25

Not in India at the moment.
The menu options come from your network provider or an application running on your sim. That was what I was worried about. Both are insecure. Also I am not sure how network providers link with bank apps.
For your issue, restart your phone. It will start working again.

Suraj · Post by **Suraj** » 05 Dec 2016 22:28

RBI should be out with latest weekly DeMo numbers soon . Last weeks figure was 8.11 lakh crore deposits and 8.45 lakh crore total . Perhaps 9.5-10 now ...

IMHO the smart money is already deposited . A significant part of the remainder are dumb holdouts smoking hopium. They are welcome to roll their worthless notes up and smoke it .

Sridhar K · Post by **Sridhar K** » 05 Dec 2016 22:32

How far is the adoption of Mudra banks? In my area, from our house maid, ironing guy, veg vendor, fish vendor, flower vendors, mechanic all still rely on micro lenders (typically politically connected guy) who comes daily morning, does the funding for the day's purchase and comes back to collect the money back with a 2% lending charges (all cash transaction).

Even during this liquidity crunch, these guys are still active with the Rs 2000 note and are the source of change in Suburban Chennai. The maids and the small vendor exchange their days collection of 100s and 50s with the 2000 notes from people like us and returns the spanking Rs 2000 notes to lenders, which will be used for further lending and hoarding. Most of them claim that they have been able to convert some significant portions to new currency.

Have spoken several times to these people to desist from taking from these lenders and use the banking system earlier but now approaching a bank is a challenge for these people who are not used to the banks. Tried to help a few with apps (Paytm, pockets, UPI) but they have to buy a smart phone first. They were interested in buying a card machine but the entry barrier (so much turnover, cost) and availability of Pos m/c for them seem to be a challenge.

Was using uber over the last few weeks and the drivers would give some lame excuse not to turn up once I said PayTm. Then figure out that some of them were demanding cash as most of their trips have been cashless and don't have money even for petrol. Then when I asked them why they don't use their debit cards at the petrol bunk, these guys are genuinely taken aback as they haven't really thought about it. Gave a small talk on how to use debit cards and wallets since most of them carry smart phones from uber/ola, have a bank account where their payment gets credited but are not sure how to use them.

Saw a new banner of NaMo in a HP Petrol bunk today with a beaming lady happy with her hard earned money in a trusted bank. Perhaps massive media blitz, ads, commercial on how to use smartphones, etc. in vernacular languages may go a long way in the move to cashless, providing Pos m/c on discount etc. will also help

The land line based PoS machines seems to have problems connecting especially during weekend. Have happened to me 4-5 times almost every week at different shops and had to end up paying cash. The mobile one seems to be working fine.

ShauryaT · Post by **ShauryaT** » 05 Dec 2016 22:32

shiv wrote:
Suraj wrote:This deflation in price due to drop in demand is good for the consumer . They no longer compete with the invisible black hand . There's no longer a big fish behind the scenes skimming off part of your money to add to their black money stash .
I'm reading that real estate has taken a hit and there was one guy who said "I have been trying to sell my house and used to get 3-4 calls a day. But now not even one"

This guy will have to drop his price before calls start picking up.

Shiv ji: I read Suraj's post as far wider than narrow sectors like real estate or gold. He will have to expand on what that means and the deflation theory he is referring to. Real world use cases will be good to understand.

A trader with BM, visits a high end restaurant, restaurant also collects some BM. Salary of staff is paid from restaurant revenues. Revenues take a 30% dip. The high end trader income has taken a permanent hit, with him not going to the restaurant any more. This is trickle down effects to all the vendors to the restaurant.

For Suraj's theory to work this loss will have to be offset by lower prices in the general economy. But anyways, I maybe misreading what he is saying so will wait for him to expand.