Currency Demonetisation and Future course of Indian Economy

[LokeshC]

^^^ The high end trader who declares his stash and then complies in the future has a big edge over the others, he also has a higher real post taxed disposable income compared to his "high on hopium" collegues. His nominal income and nominal asset value maybe lower compared to pre-BM-busted era, but post BM-buster-era due to deflation his nominal assets have far more value (in real terms).

1000Rs before BM-buster era is not the same as 1000Rs post BM-buster.

[arshyam]

Per S Gurumurthy, MUDRA didn't get the support from it needed from the RBI. He made some remarks on this, and also how some people in RBI didn't understand how business is run in India. Pls to refer his Sastra speech linked in this thread.

[Suraj]

Let me turn the argument of 'black marketer not spending means economy will crash' back in your face . The restaurants that used to operate in black now turn black money into white . They pay employees legal minimum wage plus ESI / PF . Employee has benefits now that he didn't before . And mandated work hours plus overtime. Government gets additional tax that they didn't before .

Instead of government dealing with constant inflation due to black market hoarding they have many more tax payers, less inflation and lower debt load so they can spend on infrastructure and services which puts more people to productive work .

Every single black marketer is a moocher . He uses public goods and services but doesn't pay for it because he's not paying taxes. Compelling his business into white economy benefits everyone, except that guy . And he deserves to eat that loss anyway . And where the black marketer is a public official he deserves severe criminal penalties in addition to monetary ones .

[LokeshC]

Exactly. I read somewhere (I think it was on BRF) that every pothole on the road has an economic cost associated with it. The amount of fuel it takes to slow down/navigate around it times the number of vehicles plying on that road for any length of time.

There are secondary, snowballing costs associated with not paying taxes, such as the above.

[ShauryaT]

^^^ The high end trader who declares his stash and then complies in the future has a big edge over the others, he also has a higher real post taxed disposable income compared to his "high on hopium" collegues. His nominal income and nominal asset value maybe lower compared to pre-BM-busted era, but post BM-buster-era due to deflation his nominal assets have far more value (in real terms).

1000Rs before BM-buster era is not the same as 1000Rs post BM-buster.

Time will tell the real story and quickly. What you are saying then is people at the retail end will go to a place that sells clothes or cell phones or gold with tax added and refuse to pay in cash and save a buck. At this time over 90% of the Indian unorganized economy is in cash about 85% of all the transactions are in cash (by count). These numbers will have to have a dramatic change in a time frame that would be unprecedented. Understand that cashless is an unstoppable evolution. What is your guess for these numbers in 1 years, 3 years, 5 years?

Remember as of now nearly 100% of the supply chain today from the retailer to producer in agriculture alone is cash.

Suraj: My questioning is not about what I desire or making me understand the merits of a mostly white economy. It is about what is likely to happen in India by Indians in an Indian eco-system. If you expect all of these to happen. great. Deflation of prices across the board it is.

[Suraj]

Remember as of now nearly 100% of the supply chain today from the retailer to producer in agriculture alone is cash.

That would translate to 100% of economic activity in agriculture is black. That's not true because official GDP data says agri economic activity amounts to approx $450 billion or 18% of GDP.

Suraj: My questioning is not about what I desire or making me understand the merits of a mostly white economy. It is about what is likely to happen in India by Indians in an Indian eco-system. If you expect all of these to happen. great. Deflation of prices across the board it is.

Maybe you don't realize it, but this sounds absurd. What 'merits of a mostly white economy' do you need to understand ? How about that there are absolutely no merits to a black economy to begin with ? If you don't agree, then go ahead, tell us all why stealing from every honest tax payer is a good thing. And no, you don't get to use corrupt people as an excuse not to pay taxes. Taxes are not optional.

[GShankar]

^^ don't mean to be rhetorical. I have been learning a lot from this thread. However my current understanding is thus - "As an individual, filing tax returns are mandatory but paying taxes, may be not so much". I mean by only taking all "white" (above the table) means one can avoid paying taxes to a certain extent. No?

PS: It is given that one has to be honest in tax returns. Because all lies in the tax returns could come back to bite.

[ShauryaT]

Remember as of now nearly 100% of the supply chain today from the retailer to producer in agriculture alone is cash.

That would translate to 100% of economic activity in agriculture is black. That's not true because official GDP data says agri economic activity amounts to approx $450 billion or 18% of GDP.

I did not say it is black, said it is cash. How much of that becomes black as the produce moves from producer to other intermediaries is anyone's guess. All I am saying is the entire chain is cash as of now.

Suraj: My questioning is not about what I desire or making me understand the merits of a mostly white economy. It is about what is likely to happen in India by Indians in an Indian eco-system. If you expect all of these to happen. great. Deflation of prices across the board it is.

Maybe you don't realize it, but this sounds absurd. What 'merits of a mostly white economy' do you need to understand ?

I do not, already said it in the highlighted portion.

[Suraj]

That would translate to 100% of economic activity in agriculture is black. That's not true because official GDP data says agri economic activity amounts to approx $450 billion or 18% of GDP.

I did not say it is black, said it is cash. How much of that becomes black as the produce moves from producer to other intermediaries is anyone's guess. All I am saying is the entire chain is cash as of now.

This is again false. You do know that NABARD exists, right ? The total credit flow to agriculture in 2015-16 across all banks was Rs.8.77 lakh crore ($135 billion), i.e. more than all the black money deposited as of last week.
NABARD annual report 2015-16

Code: Select all

AGENCY-WISE GROUND-LEVEL CREDIT FLOW (` crore)
Agency              2013–14   2014–15    2015–16 (Provisional)
Cooperative Banks 1,19,963.79 1,38,469.50 1,53,295
RRBs              82,652.72   1,02,482.91 1,19,261
CBs               5,09,004.96 6,04,375.82 6,04,668
Total             7,11,621.47 8,45,328.23 8,77,224

You are far off the mark about any claims about agriculture being all cash. If anything, it's the least conducive to cash operations because the product takes months to produce and therefore depends on credit to cover input costs. 'All cash' is far more easily accomplished by someone running a corner shop than running a paddy field.

[Sicanta]

We need Rs 500 notes to end bank queues: SBI

http://www.financialexpress.com/industr ... bi/464655/

At least Rs 10 lakh crore must be in circulation for the long queues at banks to end but the pressing need is the missing Rs 500 currency, a top SBI official said on Monday. “According to our study, two months of consumption amount, Rs 10 lakh crore, is required in circulation in the markets. The queues will then disappear,” SBI Managing Director Rajnish Kumar said.

“Out of this, at least Rs 3-4 lakh crore should move to the digital or online medium,” Kumar added at the Inclusive finance India Summit here.

Hundreds of thousands have been queuing up at banks and ATMs across the country daily since the 500 and 1,000 currency notes were declared illegal tender on November 8.

The State Bank of India official pointed out that lack of enough Rs 500 notes was hindering the faster circulation of currency.

“Right now there is nothing between Rs 100 and Rs 2,000 notes which is causing problems. Once Rs 500 is in circulation, it will ease the situation,” he said. He added that Rs 500 denomination notes were not available.

Kumar said that of the 49,000 SBI ATMs, 43,000 had been recalibrated. “Every day SBI ATMs are dispensing Rs 17,000-19,000 crore,” he said.

[Suraj]

Income Disclosure Scheme bags Rs 67,382 cr unaccounted money

The government on Sunday revised upwards the amount of black money disclosed under Income Declaration Scheme (IDS) to Rs 67,382 crore, even as it did not take into account two high-value disclosures.

“After final reconciliation, the revised figure of actual declarations received and taken on record was Rs 67,382 crore which had been made by 71,726 declarants,” the Finance Ministry said in a statement here on IDS 2016.

“On Oct 1, 2016, it was announced that declarations totalling Rs 65,250 crore were received from 64,275 declarants, subject to reconciliation,” it said.

The Income Tax Department did not take into consideration the Rs 13,860 crore declaration made by Ahemdabad-based Maheshkumar Champaklal Shah, which was reported prominently, as well as another made from Mumbai.

“Among the declarations received, there were two sets of declarations of high value which were not taken on record in the above figure because they were found to be suspicious in nature being filed by persons of small means,” the statement said.

PMO maintains a close watch over bank operations:
Demonetisation crackdown: Narendra Modi govt suspends 27 public sector bank officials, transfers 6 others

The government on Friday said 27 officials of public sector banks have been suspended, while six others have been transferred to non-sensitive posts, marking the first such crackdown on ground-level officers for apparent irregularities post-demonetisation. “While all efforts are being made to facilitate genuine transactions, illegalities will not be tolerated and appropriate action will be taken against individuals involved in irregular and unauthorised activities,” the finance ministry said in a statement.

While appreciating the “commendable work” done by most officers by putting in long hours in managing banking transactions, the ministry said some bank officials were found involved in carrying out transactions “which were irregular and violative of RBI’s instructions”. It did not elaborate on the nature of violations.

[disha]

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).

Wasn't Jan Dhan account designed for the above? I understand that going to bank is a little difficult., but once that rubicon is crossed they will not be paying a hefty 15% of their meagre earnings to the money lender!

[Bart S]

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).

Wasn't Jan Dhan account designed for the above? I understand that going to bank is a little difficult., but once that rubicon is crossed they will not be paying a hefty 15% of their meagre earnings to the money lender!

No, that is a Mudra bank area, or what should have been anyway. JDY accounts will not provide the credit that these guys need to run their business.

OTOH, with 2.5 lakhs of BM deposited in their JDY account and Modiji asking them to keep it, there are interesting possibilities here.

[Suraj]

GoI to reduce tax man's discretion, lower stamp duty

Tightening the noose further around black economy, the government may abolish discretionary powers of tax officers in deciding liabilities for evasion, said NITI Aayog Vice-Chairman Arvind Panagariya.

He also hinted that stamp duty for real estate dealings may be eased with a possible rise in on-the-book property deals in the wake of the ongoing crackdown on unaccounted wealth.

“We have to also go back and begin to think much more seriously about a whole set of tax reforms, which would both bring in simplification and precision in the definition so that you reduce, and hopefully even eliminate, discretion of tax officers on this matter,” Panagariya told private TV channel India Today in an interview.

Panagariya, a former chief economist of the Asian Development Bank, was responding to questions on possible follow-up measures to the November 8 announcement of ban on 500 and 1,000-rupee banknotes.

“A lot of evasion of taxes happens when there’s too much discretion on the part of officers. So, we need to simplify,” he remarked.

“Simplification”, he explained, “would mean doing away with (tax) exemptions. In addition, (we need to) also define situations much more precisely so that it leaves no room for discretion for the tax officers to decide whether under such and such situations you are liable to tax, you are not liable to tax.”

Govt wants all workers to get wages via banking channels; eyes quick passage for law in Parliament

The labour ministry is keen that the amendments to the Payment of Wages Act are passed in the current session of Parliament itself in order to ensure that all industrial workers get their wages only through the banking channel and not otherwise.

Section 6 of the extant Act states that all wages to the persons employed in the industry be paid in current coin or currency notes or in both.
However, the employer may, after obtaining the written authorisation of the employed person, pay the wages either by cheque or by crediting the wages in his bank account.

The Act applies to both central and state sectors. There are certain industries like the railways, transport services, mines and oilfields etc, which are under the central sphere and areas like construction, water and others governed by the states.

[tandav]

Was on tour in hinterlands of Bangalore - Hyderabad and stopped off at small towns in those areas. Small roadside restaurants have been badly hit and say that the amount of business has fallen drastically and cursing DEMO. Interestingly some toll booths on Hyd-Bangalore NH4 have started accepting Paytm payments for tolls. Payment was a breeze.

Some of my acquaintances whose families are in small towns like Makrana in Rajastan state that their families have money in banks but are not able to transact day to day since the ATMs are not being stocked. Small traders who depend on such transactions have been hit. In any case the effects of this DEMO has definitely affected the small traders and the everyday common man in tier 2 and tier 3 cities and villages.

I think if the above is the status in UP hinterlands then the effect will be evident on election results.

[shynee]

Beware, benami property holders

[ShauryaT]

This is again false. You do know that NABARD exists, right ? The total credit flow to agriculture in 2015-16 across all banks was Rs.8.77 lakh crore ($135 billion), i.e. more than all the black money deposited as of last week.
NABARD annual report 2015-16

Code: Select all

AGENCY-WISE GROUND-LEVEL CREDIT FLOW (` crore)
Agency              2013–14   2014–15    2015–16 (Provisional)
Cooperative Banks 1,19,963.79 1,38,469.50 1,53,295
RRBs              82,652.72   1,02,482.91 1,19,261
CBs               5,09,004.96 6,04,375.82 6,04,668
Total             7,11,621.47 8,45,328.23 8,77,224

You are far off the mark about any claims about agriculture being all cash. If anything, it's the least conducive to cash operations because the product takes months to produce and therefore depends on credit to cover input costs. 'All cash' is far more easily accomplished by someone running a corner shop than running a paddy field.

I am referring not to the input cost to producer chain and the credit and subsidy chain therof but specifically to the farmer to consumer chain - once the crop is ripe to be sold. This chain is largely cash. The farmer sells the produce for cash to the mandi and local agents. The transport company is paid in cash. The smaller wholesalers pay the mandi and agents in cash. The retailer pays the wholesalers in cash. Most consumer pay the retailer in cash. Trade credit is the only form of widely held credit, which is eventually settled in cash. The wages paid to most in this chain is in cash, including the labour the farmer employs. This article details some of the aspects of this chain and the effects of demonetization. You may get a short term deflation here. Whether this deflation will help reduce prices only and not wages is something to watch for. My best hope is, the new currency comes to the market soon enough to avoid any contraction in the economy.

http://thewire.in/81178/azadpur-mandi-g ... old-notes/

It will take some time for change to penetrate. Voluntary participation through incentives is better than forced compliance. A simple rule of thumb is if 90%+ are not going to comply voluntarily then it is the law that has to change not the people.

[SwamyG]

I don't think suswamy was 'hindutva' when his kid was growing up..he himself was moving in congress circles a lot ..

He does pride in the fact that he has parsis and muslims in his immediate family.

[Suraj]

I am referring not to the input cost to producer chain and the credit and subsidy chain therof but specifically to the farmer to consumer chain - once the crop is ripe to be sold. This chain is largely cash. The farmer sells the produce for cash to the mandi and local agents.

Sorry, but you are being very devious here by first pretending agriculture is cash based, and then backpedaling to specifics of just the sale of goods.

Your article talks about one mandi in New Delhi, not '100% cash economy'. If your claim were true, the MCX and NCDEX would not exist, nor would the FMC of FinMin be around. These two have a combined turnover of ~Rs.70 lakh crore ($1.06 trillion), and come 2017, they will enable trading on commodity options derivatives, letting farmers sell calls on their produce for a previous prior price rather than be at the mercy of middlemens' prices at the mandi.

That article is a great example of the entire cash based chain at mandis that needs to be ripped apart and replaced with a more effective system of forward credit to farmers, instead of compelling them to be screwed over by middlemen at the mandi. Look at those pictures - those people all look wretched. The place is a dump. There's no investment in modern storage in sight. By ripping that middleman class out of the picture through DeMo, the agriculture supply chain stands a better chance of being reformed.

[tandav]

I am referring not to the input cost to producer chain and the credit and subsidy chain therof but specifically to the farmer to consumer chain - once the crop is ripe to be sold. This chain is largely cash. The farmer sells the produce for cash to the mandi and local agents.

Sorry, but you are being very devious here by first pretending agriculture is cash based, and then backpedaling to specifics of just the sale of goods.

Your article talks about one mandi in New Delhi, not '100% cash economy'. What's more, that article is a great example of the entire cash based chain at mandis that needs to be ripped apart and replaced with a more effective system of forward credit to farmers, instead of compelling them to be screwed over by middlemen at the mandi. Look at those pictures - they all look wretched. The place is a dump. There's no investment in modern storage in sight. By ripping that middleman class out of the picture through DeMo, the agriculture supply chain stands a better chance of being reformed.

The real question is 1) whether the alternative models have started to emerge with direct farm to consumer systems being put in place after DEMO. any movement on this 2) How much are the farmers and consumers being actually affected, I don't see any issues in Mumbai but is this the case in small towns and villages where the situation may be worse.

[vijayk]

With new pod/paytm/wallet to bank interfaces putting pressure on banks web services, many services are literally out of operation. My brother could not get his atms to recharge his paytm wallet. Some pos systems are slow.

Paytm itself gives many errors.

Looks like banking infrastructure is unable to scale up or Govt. is putting limits. How can we trust that cashless is going to work?

[ragupta]

With new pod/paytm/wallet to bank interfaces putting pressure on banks web services, many services are literally out of operation. My brother could not get his atms to recharge his paytm wallet. Some pos systems are slow.

Paytm itself gives many errors.

Looks like banking infrastructure is unable to scale up or Govt. is putting limits. How can we trust that cashless is going to work?

This appears to be sudden surge, no one is going to create capacity when not utilized.
I would guess before DeMo, they had excess capacity, which is not found to be enough now. Now they can justify capacity expansion, for private players it may not take much time to scale up. In most cases hardware can be procured fast, and software would be same.

[shiv]

I am referring not to the input cost to producer chain and the credit and subsidy chain therof but specifically to the farmer to consumer chain - once the crop is ripe to be sold. This chain is largely cash. The farmer sells the produce for cash to the mandi and local agents. The transport company is paid in cash. The smaller wholesalers pay the mandi and agents in cash. The retailer pays the wholesalers in cash. Most consumer pay the retailer in cash. Trade credit is the only form of widely held credit, which is eventually settled in cash. The wages paid to most in this chain is in cash, including the labour the farmer employs. This article details some of the aspects of this chain and the effects of demonetization. You may get a short term deflation here. Whether this deflation will help reduce prices only and not wages is something to watch for. My best hope is, the new currency comes to the market soon enough to avoid any contraction in the economy.

More informative than what used to happen is to see what is happening NOW even as I type. Vegetables and fodder which are "fast moving" either because they rot or because urban cattle cannot be left starving are still moving, In the city I see no issues other than a fall in veg prices and vegetable sellers accepting credit and cheques

What I find fascinating here is the break up of who needed hi denomination notes more. It is the middlemen who need the high denomination notes. When the cash crunch started it was the middlemen who refused payments in large denomination notes while they paid off farmers with demonetized notes. But now there is a crunch - there are no notes to pay either farmers and the end users don't have notes. The most robust/wealthy middlemen will give credit and wait for the end user to get notes - and they will get paid in Rs 2000 notes. These 2000 notes will then be paid to farmers when their dues build up to over Rs 2000. The ones who need cash badly are more likely to shift to accepting cheques.

Over the course of time liquidity will come in the form of low denomination notes of which the middlemen will have to carry and accept in large volumes. They may insist on being paid in 2000 notes - but after a while if a limit is put on the production of 2000 notes - it will get difficult

It will take some time for change to penetrate. Voluntary participation through incentives is better than forced compliance. A simple rule of thumb is if 90%+ are not going to comply voluntarily then it is the law that has to change not the people.

I can call out rhetoric even without reading any facts

70-100 years and more ago all Indian girls were getting married at age 16 or below. Using the logic suggested by rhetoric - society cannot change. The law should not have called for marriage after 18

[ShauryaT]

Sorry, but you are being very devious here by first pretending agriculture is cash based, and then backpedaling to specifics of just the sale of goods.

Excuse me. Please look at the quote, where you have responded. It specifically refers to the producer to retailer chain. You have misinterpreted. No deviousness or backpedaling here.

That article is a great example of the entire cash based chain at mandis that needs to be ripped apart and replaced with a more effective system of forward credit to farmers, instead of compelling them to be screwed over by middlemen at the mandi. Look at those pictures - those people all look wretched. The place is a dump. There's no investment in modern storage in sight. By ripping that middleman class out of the picture through DeMo, the agriculture supply chain stands a better chance of being reformed.

I am simply pointing to the reality on the ground as it exists today. Not opposing where things need to evolve. Between the present and the envisioned future is a gap, the gap is rather huge is the simple point being made.

[Rishi Verma]

I am predicting post-Amma it will be easier to make sasikala and her relative-mafia to sing to get to their ill-gotten wealth

[vijayk]

Scaling up needs to be done at architecture level not just by adding hardware. That's why cloud based and Infra as a service or platform as a service models are critical. You can scale up when required and scale down when it is not.

Wonder how much of this banking infra is really ready for this. Unfortunately no one in govt is ready to get these things done without bribes. Too many worthless players. Hope they get some quality players involved and resolve scalability and security issues

[vina]

He does pride in the fact that he has parsis and muslims in his immediate family.

Seriously OT. But I really don't see what is the point in this or even why it matters. Lets just say , I know people who know Suhasini quite well and she is a normal decent woman. Who she gets married is her business and that should have no bearing on anything.

In addition to Parsis and Muslims, Swamy has jews and christians too in his immediately family, in addition to Hindus of course. So what is your point ? The doctor who was attending when I was born was my aunt, who was an Anglo Indian. My grandma ( she was a matriculate even in 1920s ) could accept and respect her one of her sons marrying an Anglo Indian in those days, and welcomed her as a daughter in law and the children of that marriage as her grandchildren. I too have immediate family that has many shades of "Christians "(Catholic, Greek orthodox & Lutheran , not sure if any of them are particularly religious) and of course , I am proud of all of my relatives and I have no reason not be! So why shouldn't Swamy be as well ?

[Suraj]

That article is a great example of the entire cash based chain at mandis that needs to be ripped apart and replaced with a more effective system of forward credit to farmers, instead of compelling them to be screwed over by middlemen at the mandi. Look at those pictures - those people all look wretched. The place is a dump. There's no investment in modern storage in sight. By ripping that middleman class out of the picture through DeMo, the agriculture supply chain stands a better chance of being reformed.

I am simply pointing to the reality on the ground as it exists today. Not opposing where things need to evolve. Between the present and the envisioned future is a gap, the gap is rather huge is the simple point being made.

Pretty much everything enabling a modern agricultural supply chain already is in place, from farm and fertilizer credit, to very large commodity exchanges, to companies willing to invest in cold storage facilities. What doesn't exist, is the reform impetus to fix the mandis and APMCs. These don't just trade in cash. They trade in black money. See what happened in Maharashtra ? Right after DeMo, BJP loses all the seats in the APMC elections. These places are dens of black money. Ripping their entire cash based network apart is the first step to let others step in, because incumbents with no cash are in no position to defend their prior black money fiefdoms.

[ShauryaT]

70-100 years and more ago all Indian girls were getting married at age 16 or below. Using the logic suggested by rhetoric - society cannot change. The law should not have called for marriage after 18

The question is not about that. It is about when and how. Eco-systems have to do their part. The Hindu marriage act alone was not enough. With it came increase in life spans, education that enabled the law to have its effect. Build the eco-systems and these laws will work, not in isolation. The laws against BM have always been there. VDIS was a sign that the people are not ready. Demonetization is a forced response, we will just have to wait and see, what the results are going to be.

[tandav]

Instructive read here on next steps:
http://wwww.naomiklein.org/files/resour ... etters.pdf

[SwamyG]

He does pride in the fact that he has parsis and muslims in his immediate family.

Seriously OT. But I really don't see what is the point in this or even why it matters. Lets just say , I know people who know Suhasini quite well and she is a normal decent woman. Who she gets married is her business and that should have no bearing on anything.

In addition to Parsis and Muslims, Swamy has jews and christians too in his immediately family, in addition to Hindus of course. So what is your point ? The doctor who was attending when I was born was my aunt, who was an Anglo Indian. My grandma ( she was a matriculate even in 1920s ) could accept and respect her one of her sons marrying an Anglo Indian in those days, and welcomed her as a daughter in law and the children of that marriage as her grandchildren. I too have immediate family that has many shades of "Christians "(Catholic, Greek orthodox & Lutheran , not sure if any of them are particularly religious) and of course , I am proud of all of my relatives and I have no reason not be! So why shouldn't Swamy be as well ?

The point is he is not really trust worthy, he is not what he says. zimple onlee. Or he is using them as an cover for his taunts.

[Yagnasri]

SS is a lose cannon. He will not play by the rules of the game and is too smart for his own good sometimes. We can admire him for many things he did and will do in future. But we can not trust him with the future of the nation.

The problem is the refusal of people to transact cashlessly. Not the non-availability of cash. In Mandis etc. people know each other for decades, even for generations. They do not want to take cheques as payment or do not want to go for electronic transfer even then. The reason is the unwillingness to pay tax or even just come under taxman's scanner. Do we all want the same kind of thing to continue now also?

[shiv]

70-100 years and more ago all Indian girls were getting married at age 16 or below. Using the logic suggested by rhetoric - society cannot change. The law should not have called for marriage after 18

The question is not about that. It is about when and how. Eco-systems have to do their part. The Hindu marriage act alone was not enough. With it came increase in life spans, education that enabled the law to have its effect. Build the eco-systems and these laws will work, not in isolation. The laws against BM have always been there. VDIS was a sign that the people are not ready. Demonetization is a forced response, we will just have to wait and see, what the results are going to be.

Actually the question is about the rule of thumb that you posted without any qualification such as the one you have now added

It will take some time for change to penetrate. Voluntary participation through incentives is better than forced compliance. A simple rule of thumb is if 90%+ are not going to comply voluntarily then it is the law that has to change not the people.

The only incentive that was given to encourage people to get girls married after 18 years of age was being booked by the law and imprisonment. Forced compliance has dropped the figure from 100% to maybe 20% now.

On the other hand you have yourself quoted statistics of the success of voluntary participation via incentives regarding hoarding of black cash between the 1997 demonetization and 2016

[Suraj]

The laws against BM have always been there. VDIS was a sign that the people are not ready. Demonetization is a forced response, we will just have to wait and see, what the results are going to be.

Leaders are elected to do this - firmly push through reforms. One billion opinionated people will NEVER collectively 'be ready' for anything with the potential to inconvenience them.

It's the job of the leader to gauge public sentiment and force through reforms with long term benefits while carrying the political costs of doing so . As the saying goes - it's better to do aggressively and seek forgiveness for execution mistakes, than to seek permission that will never collectively be given .

Execution will never be perfect . People themselves will try to disrupt it deliberately to suit their convenience . GoIs goal is to demonstrate enough long term gain .

'Decision by popular committee' is the sort of bullsh1t idea that reflects what's in this thread - the majority in agreement, - few skeptics and a few outright shameless crooks .

[shiv]

Demonetization is also a logistics exercise in more ways than one

For reference:


You see that 10 lakhs in Rs 100 notes would be 12 kg - which is a significant weight that is difficult to carry in a large briefcase.
500 notes weigh about the same

That means that if our cash was reduced to Rs 100 notes and less - it would be difficult to do deals over 2-3 lakhs in cash without drawing attention to the weight changing hands. For example a man who wants to buy a huge TV set that costs say 1.4 lakhs - would have to carry a 16 kg bundle and counting 1400 notes would take time. But in 500 or 1000 notes it would simply be a counting off of 100-200 notes.

Trying to buy a 40 lakh car again would mean a bundle less than 12 kg in 500 or 1000 notes. One small suitcase in boot of other car.

In Rs 100 notes 40 lakhs would be 48Kg and 40,000 notes

There is every reason to shift to smaller denomination notes and do away with Rs 2000 als

High value deals can be done electronically/via bank

[GShankar]

Seriously OT. But I really don't see what is the point in this or even why it matters. Lets just say , I know people who know Suhasini quite well and she is a normal decent woman. Who she gets married is her business and that should have no bearing on anything.

In addition to Parsis and Muslims, Swamy has jews and christians too in his immediately family, in addition to Hindus of course. So what is your point ? The doctor who was attending when I was born was my aunt, who was an Anglo Indian. My grandma ( she was a matriculate even in 1920s ) could accept and respect her one of her sons marrying an Anglo Indian in those days, and welcomed her as a daughter in law and the children of that marriage as her grandchildren. I too have immediate family that has many shades of "Christians "(Catholic, Greek orthodox & Lutheran , not sure if any of them are particularly religious) and of course , I am proud of all of my relatives and I have no reason not be! So why shouldn't Swamy be as well ?

The point is he is not really trust worthy, he is not what he says. zimple onlee. Or he is using them as an cover for his taunts.

That is some excuse to not trust someone..

You trust a person by what they do. Though there are many things that SS does that I don't agree with, he has done more good acts than almost everyone who might suit your requirements to trust.

[Gus]

Shiv - not only logistics issues, but there will be a change in perception as well. Guys who carry suitcases of 100s will not be looked at as big shots but as crooks and soon become caricatures and there might even be social stigma eventually

[SwamyG]

GShankar, you are right and I am wrong. I should judge him by his actions. I will remember that he brought down NDA gov, by joining hands with Sonia and JJ.

No more OT.

[GShankar]

very convenient to say what one has to say and then go on and say no more OT. No more OT indeed. We need to talk about that NDA down episode and how RSS and BJP made up with him in a different thread.

[Austin]

Black money: Deposits belie expectations of large windfall

http://economictimes.indiatimes.com/art ... aign=cppst