Bharat Rakshak Forum Announcement

Hello Everyone,

A warm welcome back to the Bharat Rakshak Forum.

Important Notice: Due to a corruption in the BR forum database we regret to announce that data records relating to some of our registered users have been lost. We estimate approx. 500 user details are deleted.

To ease the process of recreating the user IDs we request members that have previously posted on the BR forums to recognise and identify their posts, once the posts are identified please contact the BRF moderator team by emailing BRF Mod Team with your post details.

The mod team will be able to update your username, email etc. so that the user history can be maintained.

Unfortunately for members that have never posted or have had all their posts deleted i.e. users that have 0 posts, we will be unable to recreate your account hence we request that you re-register again.

We apologise for any inconvenience caused and thank you for your understanding.

Regards,
Seetal

Currency Demonetisation and Future course of Indian Economy

The Technology & Economic Forum is a venue to discuss issues pertaining to Technological and Economic developments in India. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
kiranA
BRFite
Posts: 271
Joined: 25 Dec 2016 09:37

Re: Currency Demonetisation and Future course of Indian Economy

Postby kiranA » 31 Aug 2017 06:15

Austin wrote:RBI Annual Report: Only Rs 16,000 Cr Didn’t Return; Govt Spent Rs 8,000 Cr In Printing New Notes

https://swarajyamag.com/insta/rbi-annua ... -new-notes


Thats from swarajyamag trying to sugarcoat it. The reality is much worse. There has been reduction of RBI dividend to govt by 35,000 crores. In addition because banks have been flooded by deposits and no uptake of loans and are liable to pay interest on those deposits, govt had to rescue them to the tune of thousands of crores. Ministry of Finance took the hit and wont show in RBI accounts. Growth in tax collections slowed down despite govt furiously spinning lies.

Over and above that is hit to economy - a hit of 1.5% (still counting) which amounts to 1.8 lac crores annualized rate. Note this is just formal economy which govt can count - the informal economy hit is much larger.

Over and above this and which is probably the worst part unleashed by these clowns - human suffering, indignity of dragging upright citizens to huge lines to protect their own hard earned money, deaths, stalled weddings, children unable to perform rites for their dead parents, diseased having to post pone health care, loss of jobs, loss of business. Not a single apology or compensation form the govt - instead we got giggles that "Indians always died like flies ..let them die once again for the glory of the ritual cleansing of demonetization" .

But no outrage from this forum.

Over and above all is the shameless political manipulation of the tragedy by the govt to score political points. Despite the fact that bankers started serving rich for bribes within a day and almost every gully banker doing it, the govt did nothing other than a few token suspensions. Instead it went after political opponents like AIADMK to weaken their hold on TN govt. The depths to depravity is unbelievable.

hanumadu
BRF Oldie
Posts: 3817
Joined: 11 Nov 2002 12:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby hanumadu » 31 Aug 2017 06:31

^^You want outrage, go to some other forum. There are plenty of tax evaders and cheats who are outraging at other fora where you will be perfectly at home.

Can you give reference that all of the 30000cr reduction in RBI dividend is because of DeMo. The cost of printing new money was clearly given in the RBI report. Also show us the reference for banks losses because of the DeMo deposits.

You are taking lies and half truths and spinning them into a narrative convenient for you.

Now that the DeMo has not turned out into an outright cash bonanza to the govt, the termites are out of the wood work claiming it was a failure.

What about the insight it gave into the mechanisms of hiding the black money? What about the discovery and closure of shell companies it led to? What about the fear it put into future black money hoarders? What about all the other steps that are being taken to curb black money? DeMo was never supposed to work in isolation. The process of cleaning up the economy is a long drawn process.

Lastly, kitna gaya?

vnms
BRFite
Posts: 165
Joined: 15 Aug 2016 01:56

Re: Currency Demonetisation and Future course of Indian Economy

Postby vnms » 31 Aug 2017 06:48

hanumadu wrote:Lastly, kitna gaya?

Paise ke barey mein to pata nahin, lekin dimaag to poora gaya!!!!

Manish_Sharma
BRF Oldie
Posts: 3870
Joined: 07 Sep 2009 16:17

Re: Currency Demonetisation and Future course of Indian Economy

Postby Manish_Sharma » 31 Aug 2017 07:51

vnms wrote:
hanumadu wrote:Lastly, kitna gaya?

Paise ke barey mein to pata nahin, lekin dimaag to poora gaya!!!!


:rotfl:

Timeless, Classic like Kalidas' poetry !!!

vish_mulay
BRFite
Posts: 612
Joined: 14 Jan 2010 05:07

Re: Currency Demonetisation and Future course of Indian Economy

Postby vish_mulay » 31 Aug 2017 08:11

https://twitter.com/i/moments/859344286805917696
I can't post screen shots but here is a interesting compilation of twitter posts from Ashu, who has decoded the RBI report for common joes like me.

yensoy
BRFite
Posts: 551
Joined: 29 May 2002 11:31
Location: USA

Re: Currency Demonetisation and Future course of Indian Economy

Postby yensoy » 31 Aug 2017 09:04

1. Cleaning up of the system was long overdue. Was demonetization the best way to do it? Maybe not. Did it have some negative consequences? Yes. Did it do long-term damage to the economy? No bloody way.

2. Bringing all the hundreds of billions of rupees into banks was a pretty good achievement in itself, the data gathered will no doubt seed the process of better analytics for tax collection. GST is another step in the process. Eventually we need a system with leakages as small as possible so it can function efficiently in delivering goods and services to the citizens and in bringing tax revenue to the government.

3. However all this will be futile if we don't see GDP and job growth, the latter in particular.

Aditya_V
BRF Oldie
Posts: 9109
Joined: 05 Apr 2006 16:25

Re: Currency Demonetisation and Future course of Indian Economy

Postby Aditya_V » 31 Aug 2017 11:59

vish_mulay wrote:https://twitter.com/i/moments/859344286805917696
I can't post screen shots but here is a interesting compilation of twitter posts from Ashu, who has decoded the RBI report for common joes like me.


Good read, what the press is not mentioning that cost of note printing was only 5K crores, RBI lower dividend profit is on account of

1) Rs. 12K Mark to Market losses on investments which get reversed the very next day 1 July 2017, it is more of an accounting loss.

2) Forex Losses of anther Rs.5K in Forex transactions compared to an Exchange gain of Rs 3K last year- 8K

3) Rs. 7.5 Lesser Interest earning mainly since Banks needed to borrow less from and a Lower Interest rate regime.

Austin
BRF Oldie
Posts: 19614
Joined: 23 Jul 2000 11:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Austin » 31 Aug 2017 12:32

kiranA wrote:
Austin wrote:RBI Annual Report: Only Rs 16,000 Cr Didn’t Return; Govt Spent Rs 8,000 Cr In Printing New Notes

https://swarajyamag.com/insta/rbi-annua ... -new-notes


Thats from swarajyamag trying to sugarcoat it. The reality is much worse. There has been reduction of RBI dividend to govt by 35,000 crores. In addition because banks have been flooded by deposits and no uptake of loans and are liable to pay interest on those deposits, govt had to rescue them to the tune of thousands of crores. Ministry of Finance took the hit and wont show in RBI accounts. Growth in tax collections slowed down despite govt furiously spinning lies.


Very Good Point , May be the falling interest rate will save them with paying less interest.

Over and above that is hit to economy - a hit of 1.5% (still counting) which amounts to 1.8 lac crores annualized rate. Note this is just formal economy which govt can count - the informal economy hit is much larger.


The cash is back in the informal economy if you are on the street
Over and above this and which is probably the worst part unleashed by these clowns - human suffering, indignity of dragging upright citizens to huge lines to protect their own hard earned money, deaths, stalled weddings, children unable to perform rites for their dead parents, diseased having to post pone health care, loss of jobs, loss of business. Not a single apology or compensation form the govt - instead we got giggles that "Indians always died like flies ..let them die once again for the glory of the ritual cleansing of demonetization" .


Thats the sad aspect of all this but the Government would say its collateral damage
Over and above all is the shameless political manipulation of the tragedy by the govt to score political points. Despite the fact that bankers started serving rich for bribes within a day and almost every gully banker doing it, the govt did nothing other than a few token suspensions. Instead it went after political opponents like AIADMK to weaken their hold on TN govt. The depths to depravity is unbelievable.


I have yet to get any answer on what happens to Black Money of Congress , BJP and other political parties , Builders , Big and Medium Business house like the Ambanis , Tatas ,Adanis you name it.

Are we to assume these people dont have black money at all or the RBI/Banks have converted them quitely to White .... Reason you dont find any outrage from them while the Common Man and Small Business folks suffered the most in bargain.

If the IT does have information that black money was deposited then lets see if they send tax notices to Congress , BJP and other political parties , Builders , Big and Medium Business house like the Ambanis , Tatas ,Adanis and arrest them or will they go after common man

Yagnasri
BRF Oldie
Posts: 9139
Joined: 29 May 2007 18:03

Re: Currency Demonetisation and Future course of Indian Economy

Postby Yagnasri » 31 Aug 2017 13:31

It is not as simple as it sounds. The data is now available and it will be used, hopefully, in a systematic way. However, GST data which we are now getting also may be used along with this data.

nam
BRFite
Posts: 467
Joined: 05 Jan 2017 20:48

Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 31 Aug 2017 14:06

The assumption that Demo would have been bonanza was the belief that people would prefer to destroy their money, than get caught.

So if people have decided to face the music rather than throw away money( for whatever reason), how is it the fault of Demo? It was a choice given by GoI. People took this choice.

tandav
BRFite
Posts: 223
Joined: 26 Aug 2016 08:24

Re: Currency Demonetisation and Future course of Indian Economy

Postby tandav » 31 Aug 2017 14:20

If people deposited black money in their own accounts or in accounts of others/relatives and then the money was transferred (RTGS/NEFT) to pay for legitimate expenses to third parties (say purchase of equipment or materials) how will the government penalize the black money depositors? In this case there are 2 kinds of Black Money 1) Money is legitimately earned but has not paid tax 2) Money is illegitimate

What was initially black money has now turned white and entered into circulation and is as legitimate as any other. The only issue is whether Government will impose 50% + tax&penalty on the money deposited.

nam
BRFite
Posts: 467
Joined: 05 Jan 2017 20:48

Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 31 Aug 2017 14:34

People who deposited large amount post demo would need to answer. Does not matter if they have taken it out or it is already in circulation.

There is nothing called black or white for money in circulation. It is GoI who decides if it black or white. If you can explain the number, it is legal. Else not.

ofcourse it is still a open question, how much effort GoI will put in place to catch the frauds.

hanumadu
BRF Oldie
Posts: 3817
Joined: 11 Nov 2002 12:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby hanumadu » 31 Aug 2017 14:48

tandav wrote:If people deposited black money in their own accounts or in accounts of others/relatives and then the money was transferred (RTGS/NEFT) to pay for legitimate expenses to third parties (say purchase of equipment or materials) how will the government penalize the black money depositors? In this case there are 2 kinds of Black Money 1) Money is legitimately earned but has not paid tax 2) Money is illegitimate

What was initially black money has now turned white and entered into circulation and is as legitimate as any other. The only issue is whether Government will impose 50% + tax&penalty on the money deposited.


People with high deposits and without KYC norms completed will not be able to withdraw or move out any money. Those who have KYC will be found and asked to pay up if deposits don't match tax returns.

tandav
BRFite
Posts: 223
Joined: 26 Aug 2016 08:24

Re: Currency Demonetisation and Future course of Indian Economy

Postby tandav » 31 Aug 2017 14:56

So a person with Aadhar card opens a KYC compliant account in a nationalized bank, deposits Rs 2Cr and then transfers the money to various fellows (maybe buys something worthless for a lot of money and helps funnel the money back to actual black money owner) leaving account at 0. Analytics catches this dude as having unaccounted income and asks him to pay up and he claims he is bankrupt and/or is untraceable what happens then??

nam
BRFite
Posts: 467
Joined: 05 Jan 2017 20:48

Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 31 Aug 2017 15:11

tandav wrote:So a person with Aadhar card opens a KYC compliant account in a nationalized bank, deposits Rs 2Cr and then transfers the money to various fellows (maybe buys something worthless for a lot of money and helps funnel the money back to actual black money owner) leaving account at 0. Analytics catches this dude as having unaccounted income and asks him to pay up and he claims he is bankrupt and/or is untraceable what happens then??


Slam Dunk case of money laundering. Transferring large amount across accounts without valid reason is money laundering.

His choice to tell all or he is going in for money laundering.

tandav
BRFite
Posts: 223
Joined: 26 Aug 2016 08:24

Re: Currency Demonetisation and Future course of Indian Economy

Postby tandav » 31 Aug 2017 16:19

So who will be prosecuted in this case?? The payee or the payer?

nam
BRFite
Posts: 467
Joined: 05 Jan 2017 20:48

Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 31 Aug 2017 16:44

Both. The payer is not going to transfer to an account he wouldn't trust to get it back/part of some deal.

nam
BRFite
Posts: 467
Joined: 05 Jan 2017 20:48

Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 31 Aug 2017 16:55

The cash is back in the informal economy if you are on the street


I have to disagree with this comment. If GoI catches the person who has released this money in to the economy and make him pay taxes.. well it is not informal anymore.

Since almost everyone has deposited, you now know the source of 98% of the cash in the economy. The only ones who got away was 16k.

Before Demo every government could raise their hand and say we don't know the source, hence cannot crack down on black money.

Now GoI has the data. So need to be seen how much will GoI has to chase the frauds.

Gus
BRF Oldie
Posts: 7948
Joined: 07 May 2005 02:30

Re: Currency Demonetisation and Future course of Indian Economy

Postby Gus » 31 Aug 2017 18:35

The way I see it..if you had BM at DeMO, the choice was destroy or deposit. It seems that very few opted for destroy (other than FICN holders, who had to destroy).

of those who deposited, there were many routes

1. JDY accounts and agents standing in lines etc - which resulted in 'distribution of wealth' in the form of commission to the account holder. I think a lot of the support poor folks give to DeMo is because of this. Money did trickle down and folks knew why and they credit Modi for this.

2. shell accounts and all that CA tactics - this is being chased and is probably a long haul money trail investigation thing

3. deposits on self account and IT notices - this is also being pursued by IT notices. This is also a long haul.

By nature 1,2 and 3 are not immediately and clearly quantifiable as "X amount of BM was captured".

what are indicators that BM has reduced?

1. increase in money that are with the banks (if money is with bank, then it is less likely to be BM, as it is always liable to be audited and tracked, unlike cash in hand)

2. increase in tax returns filed (it's not clear how easy it is to separate what should be the number if no DeMO and what it is now)

3. increase in electronic transaction

4. reduction in inflation because BM not hoarding/speculation/chasing etc. Land prices falling should be a clear indicator. I know in my area land price for an acre shot up from ~5 lakh an acre in 2005 to 30 or 40 lakhs an acre in 2016. All this when agri was failing and sons of farmers were fleeing villages for cities. Clearly it was the BM folks chasing that land and driving up prices.

5. election spending. This should also be a good indicator.

AjayKK
BRFite
Posts: 1520
Joined: 10 Jan 2008 10:27

Re: Currency Demonetisation and Future course of Indian Economy

Postby AjayKK » 31 Aug 2017 18:40

Cash deposits of Rs 2.89 lakh core by 9.72 lakh people post-demonetisation under scanner
WION Web Team New Delhi, Delhi, India Aug 31, 2017, 06.04 PM

http://www.wionews.com/india-news/cash- ... nner-19724

The income tax department said Thursday that cash deposits of Rs 2.89 lakh core by 9.72 lakh people in 13.33 lakh accounts post demonetisation were under the radar, reported PTI.

PTI added the income tax department as saying 14,000 properties of over Rs 1 crore each were also under scrutiny since their owners had not filed income tax returns.

rvishwakarm
BRFite -Trainee
Posts: 28
Joined: 15 Aug 2016 11:37

Re: Currency Demonetisation and Future course of Indian Economy

Postby rvishwakarm » 31 Aug 2017 18:50

If anyone wants to see the real affect of Demo, check the Real State sector, they have been greatly impacted because of high percentage of black money financing.

Supratik
BRF Oldie
Posts: 4832
Joined: 09 Nov 2005 10:21
Location: USA

Re: Currency Demonetisation and Future course of Indian Economy

Postby Supratik » 31 Aug 2017 18:56

X-post

India CIC now similar to advanced countries. Demo effect. Need to see if it is maintained.

http://www.financialexpress.com/economy ... bi/834251/

Dipanker
BRF Oldie
Posts: 2897
Joined: 14 May 2002 11:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Dipanker » 31 Aug 2017 19:00

nam wrote:
The cash is back in the informal economy if you are on the street


I have to disagree with this comment. If GoI catches the person who has released this money in to the economy and make him pay taxes.. well it is not informal anymore.

Since almost everyone has deposited, you now know the source of 98% of the cash in the economy. The only ones who got away was 16k.

Before Demo every government could raise their hand and say we don't know the source, hence cannot crack down on black money.

Now GoI has the data. So need to be seen how much will GoI has to chase the frauds.


I am sure you already know that that only a very small fraction of black money/wealth (by some estimate about 5% or so ) exists as black cash. The rest ~95% as gold, gold bullion, offshore accounts, real estate etc.

kapilrdave
BRFite
Posts: 1566
Joined: 17 Nov 2008 13:10

Re: Currency Demonetisation and Future course of Indian Economy

Postby kapilrdave » 31 Aug 2017 19:15

Dipanker wrote:I am sure you already know that that only a very small fraction of black money/wealth (by some estimate about 5% or so ) exists as black cash. The rest ~95% as gold, gold bullion, offshore accounts, real estate etc.

Aayega aayega. sabka number aayega. dhiraj dhare.

Commie funding by foreign powers ka bhi number aayega. :twisted:

Suraj
Forum Moderator
Posts: 10844
Joined: 20 Jan 2002 12:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 31 Aug 2017 20:41

Dipanker wrote:I am sure you already know that that only a very small fraction of black money/wealth (by some estimate about 5% or so ) exists as black cash. The rest ~95% as gold, gold bullion, offshore accounts, real estate etc.

None of this is liquid anymore if it was acquired in black money. Unlike cash, all these are easier for government to clamp down upon by demanding ownership details. Particularly RE (benami act) and offshore accounts, and to a lesser extent gold as well. Cash was the liquidity medium of the black economy, not gold.


Supratik
BRF Oldie
Posts: 4832
Joined: 09 Nov 2005 10:21
Location: USA

Re: Currency Demonetisation and Future course of Indian Economy

Postby Supratik » 31 Aug 2017 21:25

Shifting goalposts. There were many aims behind demo and demo itself is one of the tools.

Austin
BRF Oldie
Posts: 19614
Joined: 23 Jul 2000 11:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Austin » 01 Sep 2017 11:10

P Chidambaram On Demonetisation Debacle | ET NOW Exclusive Interview


Austin
BRF Oldie
Posts: 19614
Joined: 23 Jul 2000 11:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Austin » 01 Sep 2017 13:54

Editors Roundtable : Demonetisation, More Pain Than Gain ? | Part 1


Sachin
Webmaster BR
Posts: 6888
Joined: 01 Jan 1970 05:30
Location: Undisclosed

Re: Currency Demonetisation and Future course of Indian Economy

Postby Sachin » 01 Sep 2017 14:37

Dipanker wrote:I am sure you already know that that only a very small fraction of black money/wealth (by some estimate about 5% or so ) exists as black cash. The rest ~95% as gold, gold bullion, offshore accounts, real estate etc.

The same was also mentioned by Com. Thomas Issac, the Kerala Finance Minister. He said the same, nobody is a fool to store black money in liquid cash. All comrades nodded in unison. Then in the coming weeks the state witnessed:-
1. Mad rush to Co.Op banks (Primary) to deposit loads of cash. That avenue was soon locked up. The Primary Co.Op society banks running helter skelter for ID proofs and syncing up their account books.
2. Mad rush to normal PSU banks for depositing money. PAN #, ID Proof etc. becoming mandatory and the hoarders realising that the noose is tightening.
3. Very many people getting busted with bag loads of cash. Havala dealings took a hit.
4. Even today, people carrying large bags of the now "invalid" Rs. 500 and Rs.1000 are getting caught. There was a strong rumour that such currency could be siphoned off to the Gelf, and then routed back as NRI money.
5. Real Estate tanking now complete. RE in Kerala is in the "unhealthy woman; now pregnant as well" mode.

nam
BRFite
Posts: 467
Joined: 05 Jan 2017 20:48

Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 01 Sep 2017 15:17

May be I am naive, not sure why would people returning money or not returning would be a yardstick for success of demon.

If people return money, gov may not have a cash bonanza, but gets to record all those who had cash. Legal or illegal. Plus the cash missed will be taken as tax in future.

If people burn money, gov gets cash bonanza, but miss out on record people & crooks on IT and future taxes.

Either ways GoI wins!

May be someone can correct me.

Kakkaji
BRF Oldie
Posts: 3011
Joined: 23 Oct 2002 11:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Kakkaji » 02 Sep 2017 06:39

Apart from the Rs 16,000 crores that did not get deposited in banks and thus turning worthless, what about all the fake currency that was in circulation which became useless at one stroke? It is not in the public domain, but the Govt must have had some estimate of how much it was, and that has all been extinguished now.

We will never know, but that may have been the main reason for demo.

Another view, from Anil Bokil of Artha Kranti:

Demonetisation saved India from 2008 US-like crisis, says its votary

there was a huge ‘cash bubble’ and if demonetisaiton had not happened, India would have been hit like the 2008 subprime crisis in US.

what was happening was simple, since less taxes were being collected, the governments over the years had printed more cash, this had led to a huge pile up, cash was being used for every transaction…Since there was cash bubble with far worse consequences,

He claimed that demonetisation was necessary as the Indian rupee was being eroded by the presence of fake notes. “What has been done is fencing of the economy. This was not just about curbing black money, there were many other facets involved, like fake currency, inflation. The cash was being used by anti-social elements. The government had to do it because it’s prime responsibility was to secure the nation,” Bokil said.

Suraj
Forum Moderator
Posts: 10844
Joined: 20 Jan 2002 12:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Suraj » 02 Sep 2017 07:23

Fake currency need not be deposited, if the holder knows its fake . There's a risk that the bank will immediately flag them . But yes alll those papers with 500 and 1000 on them are useless .

Dipanker
BRF Oldie
Posts: 2897
Joined: 14 May 2002 11:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Dipanker » 02 Sep 2017 09:35

Kakkaji wrote:Apart from the Rs 16,000 crores that did not get deposited in banks and thus turning worthless, what about all the fake currency that was in circulation which became useless at one stroke? It is not in the public domain, but the Govt must have had some estimate of how much it was, and that has all been extinguished now.

We will never know, but that may have been the main reason for demo.


Actually that was one of the reason touted for demonetization. In the end the amount of fake currency found was a mere 42 crore, or something like 0.0007% of the total. Interesting many of the fake notes were of the newly issued 2000 notes!

"Despite the rise the total value of counterfeit notes amounted to an insignificant Rs 42 crore."
Source

uddu
BRFite
Posts: 1726
Joined: 15 Aug 2004 17:09

Re: Currency Demonetisation and Future course of Indian Economy

Postby uddu » 02 Sep 2017 10:44

^^^This the total fake currency that got into the banking system after demonetization? Now what about the earnings in fake currency accumulated throwing stones at the soldiers? Did they deposit it in the bank or it just went Kaput?

Austin
BRF Oldie
Posts: 19614
Joined: 23 Jul 2000 11:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Austin » 02 Sep 2017 12:47

Kakkaji wrote:Apart from the Rs 16,000 crores that did not get deposited in banks and thus turning worthless, what about all the fake currency that was in circulation which became useless at one stroke? It is not in the public domain, but the Govt must have had some estimate of how much it was, and that has all been extinguished now.

We will never know, but that may have been the main reason for demo.

Another view, from Anil Bokil of Artha Kranti:

Demonetisation saved India from 2008 US-like crisis, says its votary

there was a huge ‘cash bubble’ and if demonetisaiton had not happened, India would have been hit like the 2008 subprime crisis in US.

what was happening was simple, since less taxes were being collected, the governments over the years had printed more cash, this had led to a huge pile up, cash was being used for every transaction…Since there was cash bubble with far worse consequences,

He claimed that demonetisation was necessary as the Indian rupee was being eroded by the presence of fake notes. “What has been done is fencing of the economy. This was not just about curbing black money, there were many other facets involved, like fake currency, inflation. The cash was being used by anti-social elements. The government had to do it because it’s prime responsibility was to secure the nation,” Bokil said.


Sub Prime Crisis in US and bubble in US Housing Market has little to no relevance to Demonitisation done in India.

While on the topic though here is a write up

An Indian sub-prime crisis in the making?

http://www.thehindu.com/business/Econom ... 198209.ece

Austin
BRF Oldie
Posts: 19614
Joined: 23 Jul 2000 11:31

Re: Currency Demonetisation and Future course of Indian Economy

Postby Austin » 03 Sep 2017 10:48

Warned government about cost of demonetisation, former RBI governor Raghuram Rajan says
Highlights

Rajan said that he first gave his opinion orally in February 2016
Subsequently, RBI submitted a note to the government outlining the steps that would be needed, if the Centre went ahead with the move.
Rajan also clarified that although RBI was consulted, at no point during his term was it asked to take a decision on demonetisation.


NEW DELHI: Former Reserve Bank of India governor Raghuram Rajan has said that he had cautioned the government about the short-term costs of demonetisation outweighing the long-term benefits, and suggested "alternatives" to achieve the goal of stamping out black money.

In his new book, 'I Do What I Do: On Reforms Rhetoric and Resolve', due to be released next week, Rajan said that he first gave his opinion orally in February 2016 and, subsequently, RBI submitted a note to the government outlining the steps that would be needed, and the time required, if the Centre went ahead with the move.

"The RBI flagged what would happen if preparation was inadequate," wrote Rajan, who returned to University of Chicago Booth School of Business as faculty after his term as governor ended.

n an exclusive interview to TOI, Rajan also clarified that although RBI was consulted, at no point during his term (which ended on September 5, 2016) was it asked to take a decision on demonetisation.

The government has defended the move, arguing that several other benefits have accrued, from expanding the tax base to an increase in digital transactions.

Rajan said though the intent behind the move was good, it had come at substantial costs. "Certainly at this point, one cannot in anyway say it has been an economic success," he pointed out.

uddu
BRFite
Posts: 1726
Joined: 15 Aug 2004 17:09

Re: Currency Demonetisation and Future course of Indian Economy

Postby uddu » 03 Sep 2017 13:17

He must have better advised the UPA govt on the ill will that corruption can do to the economy. Must have saved lakhs of crores of rupees of the common man.

nam
BRFite
Posts: 467
Joined: 05 Jan 2017 20:48

Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 03 Sep 2017 14:11

Dipanker wrote:Actually that was one of the reason touted for demonetization. In the end the amount of fake currency found was a mere 42 crore, or something like 0.0007% of the total. Interesting many of the fake notes were of the newly issued 2000 notes!

"Despite the rise the total value of counterfeit notes amounted to an insignificant Rs 42 crore."
Source


That would the FICN which was detected. No one will deposit large FICN in to banks and walk in to a obvious trap.

nam
BRFite
Posts: 467
Joined: 05 Jan 2017 20:48

Re: Currency Demonetisation and Future course of Indian Economy

Postby nam » 03 Sep 2017 14:12



But he forgot to remind the previous government of stop the open loot on PSU banks. For someone who predicated 2008 crash could not see the obvious path to NPA.


Return to “Technology & Economic Forum”

Who is online

Users browsing this forum: No registered users and 13 guests