Currency Demonetisation and Future course of Indian Economy

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Sachin
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Sachin »

SaraLax wrote:Now wait for the FIU units of Finance Ministry, ED, IT & CBI to come into the picture to look at all these Bank A/C's that are suddenly bulging big with money. A/C Holders will be called in for explanation and will have to provide proofs of their sudden 'incomes' !.
On the flip side we also have the same old IT department babus who would be doing the verifications. And with some cajoling and bribing the BM hoarders may get some respite. Off course this also is not going to happen 100% of the time. If there is a "Passport Seva Kendra" type software system, then things may improve a lot. A system where every document can be uploaded and approvals/sign offs to be done at multiple stages on the system may be helpful. So one chap becoming the point of failure can be avoided.
kvraghav wrote:Firstly, demonetisation has not changed bribe taking. It will have some effect if even 2000 and 500 is withdrawn, gold and land made strict.
Karnataka was not like this 10 years before.
Should not be even 10 years before, it should be at least 15-20 years. Had spoken to a person now a judge but a lawyer in the 1980s and 1990s. His speciality was verification of land records. As per him, any land sale in Bengaluru city (and adjoining areas) after 1995 can be screwed up using the existing laws itself. Some or the other document was not in order, and people who want to cause trouble can do that. As per him, perhaps the government built lay outs may be a safe bet, but after year 2000 even that is dicey.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by kvraghav »

I was talking about the BBMP building laws. As for the land records, Karnataka has green belt, yellow belt, a khata, b khata, bda khata, bda noc, e khata. These are words used to confuse people. SM Krishna had digitized land records, so land record after 2004 are safe. The problem is bda. They bda khata and bda noc are two category of property which are high demand ones. They are like govt guaranteed properties.the e khata and the a khata are second most in demand ones which means property denoted as resendential and usually do not have any govt related issues. These can have legal sale related issue though. The last is where all the corruption happens and all the politicians money is hidden. The b khata is general land holding. This can belong to green belt for agriculture or yellow belt for industries. Here, all agencies make money. Bda makes money by notifying these properties for aquasition, takes money and drops some. The DC makes money by converting some land to residential from green belt. The politicians make money by buying such land and selling them after BBMP takes over. These are in suburbs but denoted as rural lands. Their govt rate will be low. When BBMP takes the area in, these will become urban area and govt value increases. They then sell the property and show the govt difference value as profit making their corruption money white.
Dasari
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Dasari »

Sachin wrote:
SaraLax wrote:Now wait for the FIU units of Finance Ministry, ED, IT & CBI to come into the picture to look at all these Bank A/C's that are suddenly bulging big with money. A/C Holders will be called in for explanation and will have to provide proofs of their sudden 'incomes' !.
On the flip side we also have the same old IT department babus who would be doing the verifications. And with some cajoling and bribing the BM hoarders may get some respite. Off course this also is not going to happen 100% of the time. If there is a "Passport Seva Kendra" type software system, then things may improve a lot. A system where every document can be uploaded and approvals/sign offs to be done at multiple stages on the system may be helpful. So one chap becoming the point of failure can be avoided.
If they create mandatory procedures of documenting everything in computer and a random audit of certain % of filings/settlements by IT officers, it should generate enough fear. I agree that some leaks cannot be avoided.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by KLNMurthy »

Cain Marko wrote:TBH, just want to know what is phoren stake in all this....I mean what warrants an article of this nature?

What India Has Done To Its Money Is Sickening And Immoral - Forbes

http://www.forbes.com/sites/steveforbes ... f569cc1148

Why so much anguish? Kahi pe jor ka jhatka to nahin baitha?
Fascinating. The Big Man himself, Steve Forbes rides into battle on this one.

And he compares note-bandi to Emergency-era nasbandi, denouncing the latter as nazi-like eugenics. Breathtakingly audacious dishonesty by the doyen of Western White capitalist interests, the very same interests that brayed endlessly and hypnotically on in the 1950s, 1960s, and 1970s about India 's population problem and the crying need for political will to take drastic measures. India's family planning propaganda culminating in nasbandi and China's disastrous one-child policy were the direct result of those countries' rulers allowing people of Forbes's ilk to do their thinking for them.

It is a very formulaic article, denouncing note-bandi as theft by government, and throwing a carrot to Indians' vanity by saying "ayyayyo some kachra country like venezuela may have done this, but never expected from India, yaar."

Demonetization is not theft, unless, like selfish American Ayn Rand bhakt plutocrats like Steve Forbes one believes that all taxation is theft.

In India, no one really believes it is theft, even though they make lot of political noise that it is. None of demonetization's enemies, including the Hon. Supreme Court, has taken up the matter under violation of right to property, even though that would have been a prima facie plausible (though ultimately losing) case. Government did not take a paisa of the citizen's legitimate property, only temporarily curtailed free access to conveniently disposing of that property. And governments with sovereign rights do this all the time, as well as banks themselves--restrict banking hours, ATM cash supplies, or even shut banks temporarily to avoid a collapse of the banking system.

There are legitimate concerns about the potential effects of this "nuclear " action by government that a good-faith critic would have talked about. I came to know only yesterday that there is a hard limit of 24k on how much cash I can withdraw from my account. I was upset at first because it makes managing my trip home that much harder, but am now convinced on reflection that it is neither illegal nor immoral. But it is still dangerous because it can undermine the faith of the citizens in the banking system altogether, defeating the purpose. The restrictions should be removed as soon as possible, and authorities must convince people that they will never make a habit of it. In this connection I am concerned about Modi sarkar's overall poor communication and messaging skills, Modi's own individual brilliance notwithstanding.

To the question of why the angst, the clue lies in the nasbandi comparison. One approach to the ongoing white western conquest and dominance of countries like India is to force them into something bad and ill-advised like imposing family size limits and hold that wrong thing in reserve as WMD in case the SDRE native autonomously undertakes something risky but far-reaching, essentially taking responsibility for his own destiny (something the Ayn Rand wallahs like Steve Forbes constantly trumpet).

Angst is not the correct word for this. In fact it is a well-caculated and structured attack on India.

Yet another demonstration to the patriotic Indian that white western elite are our frenemies at best.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by EswarPrakash »

KLNMurthy wrote:
Cain Marko wrote:TBH, just want to know what is phoren stake in all this....I mean what warrants an article of this nature?

What India Has Done To Its Money Is Sickening And Immoral - Forbes

http://www.forbes.com/sites/steveforbes ... f569cc1148

Why so much anguish? Kahi pe jor ka jhatka to nahin baitha?
Fascinating. The Big Man himself, Steve Forbes rides into battle on this one.

And he compares note-bandi to Emergency-era nasbandi, denouncing the latter as nazi-like eugenics. Breathtakingly audacious dishonesty by the doyen of Western White capitalist interests, the very same interests that brayed endlessly and hypnotically on in the 1950s, 1960s, and 1970s about India 's population problem and the crying need for political will to take drastic measures. India's family planning propaganda culminating in nasbandi and China's disastrous one-child policy were the direct result of those countries' rulers allowing people of Forbes's ilk to do their thinking for them.

It is a very formulaic article, denouncing note-bandi as theft by government, and throwing a carrot to Indians' vanity by saying "ayyayyo some kachra country like venezuela may have done this, but never expected from India, yaar."

Demonetization is not theft, unless, like selfish American Ayn Rand bhakt plutocrats like Steve Forbes one believes that all taxation is theft.

In India, no one really believes it is theft, even though they make lot of political noise that it is. None of demonetization's enemies, including the Hon. Supreme Court, has taken up the matter under violation of right to property, even though that would have been a prima facie plausible (though ultimately losing) case. Government did not take a paisa of the citizen's legitimate property, only temporarily curtailed free access to conveniently disposing of that property. And governments with sovereign rights do this all the time, as well as banks themselves--restrict banking hours, ATM cash supplies, or even shut banks temporarily to avoid a collapse of the banking system.

There are legitimate concerns about the potential effects of this "nuclear " action by government that a good-faith critic would have talked about. I came to know only yesterday that there is a hard limit of 24k on how much cash I can withdraw from my account. I was upset at first because it makes managing my trip home that much harder, but am now convinced on reflection that it is neither illegal nor immoral. But it is still dangerous because it can undermine the faith of the citizens in the banking system altogether, defeating the purpose. The restrictions should be removed as soon as possible, and authorities must convince people that they will never make a habit of it. In this connection I am concerned about Modi sarkar's overall poor communication and messaging skills, Modi's own individual brilliance notwithstanding.

To the question of why the angst, the clue lies in the nasbandi comparison. One approach to the ongoing white western conquest and dominance of countries like India is to force them into something bad and ill-advised like imposing family size limits and hold that wrong thing in reserve as WMD in case the SDRE native autonomously undertakes something risky but far-reaching, essentially taking responsibility for his own destiny (something the Ayn Rand wallahs like Steve Forbes constantly trumpet).

Angst is not the correct word for this. In fact it is a well-caculated and structured attack on India.

Yet another demonstration to the patriotic Indian that white western elite are our frenemies at best.
Not sure if you are an NRI or not, but outside India there is a hard limit of how much money you can withdraw from your bank account as cash
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Re: Currency Demonetisation and Future course of Indian Economy

Post by vijayk »

http://www.thenewsminute.com/article/ol ... -rbi-54239
Old notes worth Rs 12.44 lakh crore deposited till Dec 10: RBI
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Re: Currency Demonetisation and Future course of Indian Economy

Post by A_Gupta »

In the US, there is no limit on cash; but any cash deposit or withdrawal at or more than $10,000 generates a Cash Transaction Report (CTR) that goes to the government. If the bank employee involved feels there is something fishy then they can mark the CTR as an SAR (Suspicious Activity Report). Structuring bank transactions to avoid CTRs is a crime.

Former Speaker of the House Dennis Hastert was paying off in secret one of his victims of child abuse, dating from the time when he was a high school teacher and wrestling coach. He structured his withdrawals, and that is what led to the investigation that revealed everything. Of course, one of Hastert's mistakes was that he lied to the FBI.
The indictment alleges Hastert first started taking out $50,000 at a time, but changed course when the huge withdrawals generated Currency Transaction Reports mandated under banking law, the indictment alleges. Hastert then began withdrawing increments of less than $10,000 to skirt the reporting ruling, according to prosecutors.
http://www.mercurynews.com/2015/06/09/d ... ndictment/
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Re: Currency Demonetisation and Future course of Indian Economy

Post by A_Gupta »

vijayk wrote:http://www.thenewsminute.com/article/ol ... -rbi-54239
Old notes worth Rs 12.44 lakh crore deposited till Dec 10: RBI
The amount of Rs 1000 and Rs 500 notes in circulation prior to demonetization is supposed to be Rs 14.2 lakh crores?
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Primus »

hanumadu wrote:
shiv wrote:. Allowing 20,000 to bu sucked out of an ATM in one go may be something that all of us have done on occasion but that is higher than a month's wages of most Indians and taht limit is squarely aimed at the wealthy and convenient for a cash economy of people who spend in 500s and 1000s.

This will need to change.
In the US, there is a daily limit of 300 to 350$ on withdrawal from ATMS. An equivalent Indian sum would me 3000 to 4000 rupees.
Actually, it is quite a bit higher, and very variable. You can withdraw up to $4000 daily although most banks limit it to $800 or $1000. You can easily ask for a temporary increase if you are traveling and so on. It all depends upon your bank, your account and historical balances, whether you are a 'premium' customer or not etc.

As has already been said, you can of course withdraw any amount in cash from the teller directly but if it is over $10K it can and often will be flagged to the authorities especially if the teller is suspicious in any way. Given that you almost never need too much cash in the US, it is very rare for a person to withdraw a large amount.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Primus »

Deans wrote:I've read with interest, the posts on doctors and their acceptance (or reluctance) of digital payments. My family visits a prominent doctor in Bangalore, who like me, is from a fauji family. While most of his patients pay in cash, he reports that income in his returns. He has however been encouraging patients to pay digitally, not because of DeMo, but ever since he discovered that his receptionist/ cashier had been pocketing cash, by overcharging patients !
Variants of this exist throughout the retail space, particularly for services or restaurants (where physical goods cannot easily be matched with payment received) . Cashiers routinely under-bill for friends, or overcharge and pocket the difference - when cash payment is involved.
This is a problem here in the US too. I guess in some ways human beings are the same everywhere. I know several doctors practices where the secretary or office manager has swindled cash handling at the front desk. There is a small part of the daily income that comes in through cash (co-payments) and the front desk personnel are often tempted to siphon a little bit off.

One good friend of mine in Canada had a major issue with her manager who had secretly taken out a credit card in the doctor's name and was happily swindling her of thousands of dollars every year. In a large and complicated practice it is often difficult to keep tabs on everything. It was only by chance that my friend found out when she accidentally saw the bill lying around in the office one day.

Many shopkeepers, especially pizza and fast food merchants routinely display signs at the cash counters that say 'if you do not get a receipt for the item it is free', thus ensuring their employees have to not only charge the right amount but also log it in the system.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by UlanBatori »

AOA! I had to go and praise Mullah Forbes.
Congratulations! When this article is published in mid-January 2017, it should establish Mr. Steve Forbes' credentials as an intelligence on par with that of Mr. Rahul Gandhi and a grasp of public policy and opinion on par with, well, Presidential Candidate Forbes of 1996 and 2000. Should be hilarious. BTW, many Indians - and their foreign funding sources - share Mr. Forbes' feeling of 'sickness', brought on by viewing those stacks of 1000-rupee notes that cannot be taken to the bank with any explanation that comes under "bailable offence" in Indian legal parlance.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Lilo »

One data point :
Both WSJ & Forbes who started the coordinated campaign against DeMo are longstanding Republican mouthpieces.
So the historically strong EJ agenda in GoP could be doing the talking more than their capitalist agenda.


GoI should double down on its cashless push.Not a second to waste.
The more this gets dragged out more the chances of a compromise half-baked cashless monetary regime.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by chola »

KLNMurthy wrote:
Cain Marko wrote:TBH, just want to know what is phoren stake in all this....I mean what warrants an article of this nature?

What India Has Done To Its Money Is Sickening And Immoral - Forbes

http://www.forbes.com/sites/steveforbes ... f569cc1148

Why so much anguish? Kahi pe jor ka jhatka to nahin baitha?
Fascinating. The Big Man himself, Steve Forbes rides into battle on this one.

And he compares note-bandi to Emergency-era nasbandi, denouncing the latter as nazi-like eugenics. Breathtakingly audacious dishonesty by the doyen of Western White capitalist interests, the very same interests that brayed endlessly and hypnotically on in the 1950s, 1960s, and 1970s about India 's population problem and the crying need for political will to take drastic measures. India's family planning propaganda culminating in nasbandi and China's disastrous one-child policy were the direct result of those countries' rulers allowing people of Forbes's ilk to do their thinking for them.

It is a very formulaic article, denouncing note-bandi as theft by government, and throwing a carrot to Indians' vanity by saying "ayyayyo some kachra country like venezuela may have done this, but never expected from India, yaar."

Demonetization is not theft, unless, like selfish American Ayn Rand bhakt plutocrats like Steve Forbes one believes that all taxation is theft.

In India, no one really believes it is theft, even though they make lot of political noise that it is. None of demonetization's enemies, including the Hon. Supreme Court, has taken up the matter under violation of right to property, even though that would have been a prima facie plausible (though ultimately losing) case. Government did not take a paisa of the citizen's legitimate property, only temporarily curtailed free access to conveniently disposing of that property. And governments with sovereign rights do this all the time, as well as banks themselves--restrict banking hours, ATM cash supplies, or even shut banks temporarily to avoid a collapse of the banking system.

There are legitimate concerns about the potential effects of this "nuclear " action by government that a good-faith critic would have talked about. I came to know only yesterday that there is a hard limit of 24k on how much cash I can withdraw from my account. I was upset at first because it makes managing my trip home that much harder, but am now convinced on reflection that it is neither illegal nor immoral. But it is still dangerous because it can undermine the faith of the citizens in the banking system altogether, defeating the purpose. The restrictions should be removed as soon as possible, and authorities must convince people that they will never make a habit of it. In this connection I am concerned about Modi sarkar's overall poor communication and messaging skills, Modi's own individual brilliance notwithstanding.

To the question of why the angst, the clue lies in the nasbandi comparison. One approach to the ongoing white western conquest and dominance of countries like India is to force them into something bad and ill-advised like imposing family size limits and hold that wrong thing in reserve as WMD in case the SDRE native autonomously undertakes something risky but far-reaching, essentially taking responsibility for his own destiny (something the Ayn Rand wallahs like Steve Forbes constantly trumpet).

Angst is not the correct word for this. In fact it is a well-caculated and structured attack on India.

Yet another demonstration to the patriotic Indian that white western elite are our frenemies at best.
Without supporting the polemics of Forbes ("theft", "immoral", etc.), the crux of what the big man says is correct and I think most us are smart enough to know this is true except we do not wish to believe it.

A country where upwards of 90 percent of the people are employed by the informal cash economy (thus black economy as defined by DeModi) cannot afford to have 86% of its currency declared worthless. An population that is still 80% rural, that is often miles away from the nearest bank and thus keeps its wealth in jars and mattresses cannot suddenly convert its savings to digital without massive losses along the way.

We are smart enough to know this is true. But as citizens of Bharat's aspiring upper and middle class we BRites do not want to see pass our tinted glass windows and our shiny new credit cards and mobile wallets that are as out of reach for the average Raj and Ram as a Delhi apartment is for a bihari farmer laboring for his landlord.

The Street studied this since the week after Modi's surprise. It caught even us offguard, yes. But what I've seen in the sales numbers for white goods since is not good. Everything is down between 25 to 90 percent. The idea that all is well because prices have not gone up or down much is fools logic. Belts have tightened in sync with the disruption in the supply line. People are not spending discretionary cash. Household budgets are being cut back 50% according to some pollings. Why would you spend freely if you are forced to wait line for that money?

And even if everything moves to digital (unlikely) then there will be a permanent tax in the way of fees and interest from credit cards and mobile wallets. This informal tax (along with the real tax enforced by I-T) is nothing to huge chains like Walmart but crippling to the mom and pop stores that we instinctively knew would be hurt when fought to keep Walmart from expanding.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by UlanBatori »

The trouble with that line is that it is so backward/colonial. Forbes pretends to be too stupid to have done basic research.

Before August 15, 2015 (1+ year since NaMo took over), OVER 700 MILLION bank accounts had been set up under the PM Jan Dhan Yojana etc. Tied to Aadhar cards. So where is this "80 percent of Indians farmers too poor and too far from bank" etc argument? Ppl had a whole year to realize the basic benefits and tie their bank accounts into some sort of basic cellphone under the USSD bijnej (I don't know how to do that yet, but that's because I have had no reason to - now I do). If they did that, they also got like 1 Lac catastrophic insurance tied into the account, hain?

700 million new accounts, for a total population of 1.2B, is essentially 100 percent coverage of adults. OK, maybe 100 million were duplicative accounts of dead people, at the Keralastan Marxist Cooperative Banks, but that still leaves 600 million.

Those who still resist all this and keep doing things as they were done for the past 1,745,345,000 years, should not be allowed to dictate the nation's future. True, a lot of the problem is unscrupulous, scofflaw bosses who will deal only in cash, thereby keeping their employees out of all the rights of citizens that come into play when the transactions are visible. How do u plan to solve this issue, except by a quick, sharp jhapad that forces a quick trip to the bank to set up accounts? If they quit paying their employees, well, out goes their business plan, so they would have to rush to change their ways.

Pompous asses such as Forbes, and his brown-sahib dhimmi followers, would like to see Indians stay backward, and be targets for EJ and other exploitation. Indians - apparently over 93%, and most in the rural areas - appear to applaud this move to true freedom.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by UlanBatori »

And BTW:
This informal tax (along with the real tax enforced by I-T) is nothing to huge chains like Walmart but crippling to the mom and pop stores that we instinctively knew would be hurt when fought to keep Walmart from expanding.
Not at all. The tiny stores that I know, are very keen to get those swipe machines because they enable tons of small transactions. No need to keep a lot of change to give back either. The transaction fees have to be brought down by competition - not just by govt. fiat. That will happen in due course, it is a HUGE market.

Or the govt. can compensate that by an equivalent reduction in sales tax - or a tax credit on transaction charges.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Rishirishi »

Primus wrote:
Deans wrote:I've read with interest, the posts on doctors and their acceptance (or reluctance) of digital payments. My family visits a prominent doctor in Bangalore, who like me, is from a fauji family. While most of his patients pay in cash, he reports that income in his returns. He has however been encouraging patients to pay digitally, not because of DeMo, but ever since he discovered that his receptionist/ cashier had been pocketing cash, by overcharging patients !
Variants of this exist throughout the retail space, particularly for services or restaurants (where physical goods cannot easily be matched with payment received) . Cashiers routinely under-bill for friends, or overcharge and pocket the difference - when cash payment is involved.
This is a problem here in the US too. I guess in some ways human beings are the same everywhere. I know several doctors practices where the secretary or office manager has swindled cash handling at the front desk. There is a small part of the daily income that comes in through cash (co-payments) and the front desk personnel are often tempted to siphon a little bit off.

One good friend of mine in Canada had a major issue with her manager who had secretly taken out a credit card in the doctor's name and was happily swindling her of thousands of dollars every year. In a large and complicated practice it is often difficult to keep tabs on everything. It was only by chance that my friend found out when she accidentally saw the bill lying around in the office one day.

Many shopkeepers, especially pizza and fast food merchants routinely display signs at the cash counters that say 'if you do not get a receipt for the item it is free', thus ensuring their employees have to not only charge the right amount but also log it in the system.
People and businesses seems to not understand the benefit an open and cashless economy could bring. Theft would be reduced, Consumers will be able the prove their purchase if required. Corruption would also be reduced as it would become much more difficult to manage the proceeds from bribes. People in India end up paying more than they should. Firstly because all services end up with higher costs and secondly because they are not protected by regulation.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Lilo »

chola wrote:.
Pains from Cashless are a transitory phenomenon - e-pesa widely adopted by Kenyan women since 2007 who are predominantly illiterate & using feature phones in what is Sub-saharan Africa is an eye opener.

There is no FDI in mutibrand retail in India so I don't know where Walmart comes into picture here.
The spending on white goods during the transitory DeMo period will obviously be down.Nothing surprising here.But demand is constantly increasing & product quality & value for money will onlee increase as the white goods market is truly liberalized by getting rid of the import & price fixing & tax evading cartels.GST is also going to start from April.
Homegrown manufacturing & enterprise will be the first beneficiaries .Even the erstwhile informal engineering sector will be benefitted.Informal sectors problem in India is not DeMo or Cashless.It's the labor laws which force the entities to maintain their informal status.

Labor law reform should be the next in agenda after demo-cashless-gst.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by ShauryaT »

It is important to have come critical appraisals on this board or we will just be part of the rah rah crowd. PB Mehta is a known critic, one can easily dismiss him being biased et al but dismiss his message is hard to do.
This government’s modus operandi is constant distraction
After two and a half years of the Narendra Modi government, if the same standards of concern about India’s future were brought to bear on the present government, what would the heightened expression of concern look like? Why have the dramatic headlines that focus on worries of substance disappeared?....

The first headline would be: Spectre of Stagnation. Despite the headline GDP growth number, private investment has barely moved. In any other context, such tepid growth in private investment would have had us screaming from the rooftops. At the end of the day, this number tells you more about how the economy is doing and is likely to do than almost any other number. Second, we used to joke that India can grow despite the state. But the fact of the matter is that for the first time in a decade, the share of public investment in projects under implementation exceeds private investment. And this is likely to continue for some time.

In short, we are becoming an economy that is not growing despite the state; .....

The second headline would have been: Botched Execution......

Smart Cities is probably doing less for the health of cities than the distribution of buses under JNNURM alone did for public transport. City government reform is not even on the agenda. .....

The third headline would have been: Hyper Arbitrary State. ....

Questions of surveillance, privacy, the appropriateness of data-sharing, choice, are all by the wayside; independent institutions that were our protection are being gutted. The advocates of minimum government who excoriated the UPA for statism have left that largest intrusion of the state, across a number of sectors, into our lives unremarked. ....

I would have imagined during the UPA, we would have run the following headlines: India besieged on both ends (that is how Kashmir and Manipur would have been described). As Sushant Singh pointed out in this paper, the number of army casualties on the LoC has doubled this year.....

Conditions that would have led the press to take out its critical swords, scream Armageddon under the UPA, now barely evoke a whisper.....

Our deeper sin is not that we have caved in, but we have fallen for the circus. Governance by distraction and hubris is a recipe for long-term economic Armageddon. But it is a strange alchemy when we no longer fear that prospect.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Lilo »

PB Mehta also holds the distinction common for Presstitutes in India - he never supported Modi when he took the most apolitical & unreproachable measures like JanDhan scheme or crop insurance scheme .
If he has no record of support for the govt in the past , his protests now are not worth the paper they are printed on.

PS: Ive read the message too & as someone long used to reading b/w the lines in our mainstream presstitutes - i can certify that its tripe.
Last edited by Lilo on 24 Dec 2016 21:08, edited 1 time in total.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by pankajs »

chola wrote:Without supporting the polemics of Forbes ("theft", "immoral", etc.), the crux of what the big man says is correct and I think most us are smart enough to know this is true except we do not wish to believe it.

A country where upwards of 90 percent of the people are employed by the informal cash economy (thus black economy as defined by DeModi) cannot afford to have 86% of its currency declared worthless. An population that is still 80% rural, that is often miles away from the nearest bank and thus keeps its wealth in jars and mattresses cannot suddenly convert its savings to digital without massive losses along the way. {Saar you must come up with a better story. Everyone got about 2 months, barring the flip-flop at the end, to get the money exchanged. For village folks who do not have access to bank have someone called " mitra" or "correspondent" (effectively rural agents) of the bank who visit villages like postmen. Villagers have door to door service! Did DeMo create difficulties and disruption? Absolutely! But did it cause *massive losses*? Absolutely not! }

We are smart enough to know this is true. But as citizens of Bharat's aspiring upper and middle class we BRites do not want to see pass our tinted glass windows and our shiny new credit cards and mobile wallets that are as out of reach for the average Raj and Ram as a Delhi apartment is for a bihari farmer laboring for his landlord. {You are absolutely correct! There are a bunch who do not see past dark-tinted glass, folks who do not know about banks *mitra* for villages, who do not understand the difference between *massive disruption* and *massive loss*.}

The Street studied this since the week after Modi's surprise. It caught even us offguard, yes. But what I've seen in the sales numbers for white goods since is not good. Everything is down between 25 to 90 percent. The idea that all is well because prices have not gone up or down much is fools logic. Belts have tightened in sync with the disruption in the supply line. People are not spending discretionary cash. Household budgets are being cut back 50% according to some pollings. Why would you spend freely if you are forced to wait line for that money? {Just the rumor of shortage of salt caused its price to jump about 20x for a short period. Now if the supply line was indeed disrupted, as claimed by the media and folks on this forum, why has the has the price of Rice/Dal/Sugar/Salt/Oil (the most basic of needs) stayed stable? These are the commodities most impacted by disruption in the supply lines. On the question of discretionary spending, Yes they are down may be by as much as you suggest but that was expected. Does anyone seriously think that Modi did not know that beforehand? Or that about 2 quarters of growth will go for a toss?}

And even if everything moves to digital (unlikely) then there will be a permanent tax in the way of fees and interest from credit cards and mobile wallets. This informal tax (along with the real tax enforced by I-T) is nothing to huge chains like Walmart but crippling to the mom and pop stores that we instinctively knew would be hurt when fought to keep Walmart from expanding. {This is the same old argument that folks do not want to pay taxes because that is their competitive advantage. This does not work. After mom & pop, small enterprise will claim the same followed by medium enterprise and lastly the big industrialist too will claim taxes as a competitive disadvantage. Big industrialist too are Indians, they too claim to advance the interests of India. Where will it all end? Simple, everyone pays taxes. As for the CC/Wallet charges it will impact everyone equally. GST too will cause a slight price rise especially for service that had so far escaped its net. Should GST also be withdrawn?}
Last edited by pankajs on 24 Dec 2016 21:20, edited 2 times in total.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by pankajs »

If PB Mehta is neutral then his neutrality must be visible somewhere in some form. I have yet to see a fair and balanced (Read Neutral) opinion from him.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by UlanBatori »

PBMehta's focus on some investment number is a continuation of 60 years of focus on macro-economic mumbo-jumbo, while the realities at the bottom (no pun intended) remained stagnant: no toilets. Half the economy being under the table. MASSIVE corruption. Real estate market totally controlled by black-money. Massive counterfeiting. Cash coming in containers at Vizhinjam terminal from Pakistan/ Gelf to fund terrorism/conversion/ taking over the land and buildings. A culture of total disrespect for the law and hard honest work. Obstruction at every step if you try to start industry. A tax code that is nightmarish, but still asks in the main form:
Do you own race horses?

Forbes for instance points out that "real estate has tanked". Ah! That WOULD hurt the macro growth index badly. But are you as a thoughtful Indian terribly unhappy that real estate prices have dropped and sales are stagnant, thereby promising further drops? We all know that the reason is not a sudden lack of savings on the part of workers, it is that the black money in real estate is feeling insecure.

People are happy "rah-rah", whatever, because basic problems that have gone unaddressed for hundreds of years, are being solved in an amazingly swift and well-planned manner. A 1% GDP growth number in the short term is irrelevant compared to this. Catastrophic insurance coverage for every citizen/family! 700 million bank accounts! Mandatory hygenic facilities. A near total smoking eradication from public places. And now, some massive blows against corruption, and a swift transition to electronic transactions.

Past governments have had at most some catchy slogan:
(Sonia Gandy ki) Garibi Hatao!
Indian Shining (mostly from top politicians' heads).
Inquilab Zindabad! (Long live the revolutionary black money/ extortion enterprises of the Commies)
Here we have modern, thoughtful, dynamic action. That's why we are "rah-rah".
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Re: Currency Demonetisation and Future course of Indian Economy

Post by pankajs »

One other interesting bit about this PB Mehta chappie, is he an economist or a social science guy or a strategic affair guy or is he the Grand master of every thing anti-modi?

I mean Maun Mohana or Chiddu talking about *Spectre of Stagnation* is understandable but PB Mehta? What is the world for such know all Gyanis?
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Re: Currency Demonetisation and Future course of Indian Economy

Post by shiv »

chola wrote:
A country where upwards of 90 percent of the people are employed by the informal cash economy (thus black economy as defined by DeModi) cannot afford to have 86% of its currency declared worthless. An population that is still 80% rural, that is often miles away from the nearest bank and thus keeps its wealth in jars and mattresses cannot suddenly convert its savings to digital without massive losses along the way.
The "upwards of" 90% of people in the informal cash economy predominantly worked with 14% of the notes that are less than 500/1000 in value because most of them are daily or weekly wage earners who earn less than Rs 500 per day/week and were never paid anything higher than Rs 100 notes. People with few or no Rs 500/1000 notes are unaffected and they are the majority in India.

This fact is missed out by all the people weeping rivers of tears for the poor with the realization gradually sinking in that the poor are actually doing pretty well - its is the 10% who use 86% of the cash in 500/1000 who are howling.
Last edited by shiv on 24 Dec 2016 21:41, edited 1 time in total.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by pankajs »

http://indianexpress.com/article/india/ ... c-4443211/
Dishonest to face ruin after December 30, warns PM Modi in Mumbai
Prime Minister Narendra Modi on Saturday warned of ruin for the dishonest people after the expiry of the December 30 deadline for depositing scrapped currency and said they should not underestimate the mood of the country against corruption. “Dishonest people, you should not underestimate the mood of 125 crore people. You will have to be afraid of it… Time has come for ruin of dishonest people. This is a cleanliness campaign,” Modi said. “After 50 days (from November '8), the troubles of honest people will start to reduce and the problems of dishonest people will begin to increase,” Modi said. PM Modi was addressing a gathering at MMRDA ground in the Bandra Kurla complex, Mumbai.
Next phase to start after Dec 30.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by shiv »

pankajs wrote:http://indianexpress.com/article/india/ ... c-4443211/
Dishonest to face ruin after December 30, warns PM Modi in Mumbai
Prime Minister Narendra Modi on Saturday warned of ruin for the dishonest people after the expiry of the December 30 deadline for depositing scrapped currency and said they should not underestimate the mood of the country against corruption. “Dishonest people, you should not underestimate the mood of 125 crore people. You will have to be afraid of it… Time has come for ruin of dishonest people. This is a cleanliness campaign,” Modi said. “After 50 days (from November '8), the troubles of honest people will start to reduce and the problems of dishonest people will begin to increase,” Modi said. PM Modi was addressing a gathering at MMRDA ground in the Bandra Kurla complex, Mumbai.
Next phase to start after Dec 30.
In an Uber cab today - as the economy is picking up again - as is my own practice. Driver tells me how the corrupt rich (named a few names in Karnataka) need to be punished and how he is solidly behind Modi. I did not even ask him
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Re: Currency Demonetisation and Future course of Indian Economy

Post by nandakumar »

Shiv
More power to your practice!
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Re: Currency Demonetisation and Future course of Indian Economy

Post by gauravsh »

Was visiting my native place today, it has one of the biggest sports market in the country. People have become a little apprehensive of this whole money crunch now. Already talking that it's only till 2019 when modi will be replaced and mind that it's the traditional bussiness community which has been supportive of bjp. Also, they are vary of gst from the experience of vat in the initial stages. Things may have started getting back to normal in blr, delhi or any other metropolitan but still a way to go in tier 2 and 3 cities. Let's not get in 2004 like situation when India was shining and bjp got lost in all that glitter.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Akshay Kapoor »

shiv wrote:
chola wrote:
A country where upwards of 90 percent of the people are employed by the informal cash economy (thus black economy as defined by DeModi) cannot afford to have 86% of its currency declared worthless. An population that is still 80% rural, that is often miles away from the nearest bank and thus keeps its wealth in jars and mattresses cannot suddenly convert its savings to digital without massive losses along the way.
The "upwards of" 90% of people in the informal cash economy predominantly worked with 14% of the notes that are less than 500/1000 in value because most of them are daily or weekly wage earners who earn less than Rs 500 per day/week and were never paid anything higher than Rs 100 notes. People with few or no Rs 500/1000 notes are unaffected and they are the majority in India.

This fact is missed out by all the people weeping rivers of tears for the poor with the realization gradually sinking in that the poor are actually doing pretty well - its is the 10% who use 86% of the cash in 500/1000 who are howling.
My autowalla was trying to show me how to use über and Paytm. There is a massive impetus amongst the Lowe r classes for digital. We just need govt to deliver. I can't vouch for rest of the country but in Pune for sure. I have a sense that press et all are grossly underestimating the intelligence of the poor.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Akshay Kapoor »

This is going to be another disconnect between the experts and the people. The press just don't get it
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Re: Currency Demonetisation and Future course of Indian Economy

Post by KLNMurthy »

EswarPrakash wrote:
KLNMurthy wrote:
Fascinating. The Big Man himself, Steve Forbes rides into battle on this one.

And he compares note-bandi to Emergency-era nasbandi, denouncing the latter as nazi-like eugenics. Breathtakingly audacious dishonesty by the doyen of Western White capitalist interests, the very same interests that brayed endlessly and hypnotically on in the 1950s, 1960s, and 1970s about India 's population problem and the crying need for political will to take drastic measures. India's family planning propaganda culminating in nasbandi and China's disastrous one-child policy were the direct result of those countries' rulers allowing people of Forbes's ilk to do their thinking for them.

It is a very formulaic article, denouncing note-bandi as theft by government, and throwing a carrot to Indians' vanity by saying "ayyayyo some kachra country like venezuela may have done this, but never expected from India, yaar."

Demonetization is not theft, unless, like selfish American Ayn Rand bhakt plutocrats like Steve Forbes one believes that all taxation is theft.

In India, no one really believes it is theft, even though they make lot of political noise that it is. None of demonetization's enemies, including the Hon. Supreme Court, has taken up the matter under violation of right to property, even though that would have been a prima facie plausible (though ultimately losing) case. Government did not take a paisa of the citizen's legitimate property, only temporarily curtailed free access to conveniently disposing of that property. And governments with sovereign rights do this all the time, as well as banks themselves--restrict banking hours, ATM cash supplies, or even shut banks temporarily to avoid a collapse of the banking system.

There are legitimate concerns about the potential effects of this "nuclear " action by government that a good-faith critic would have talked about. I came to know only yesterday that there is a hard limit of 24k on how much cash I can withdraw from my account. I was upset at first because it makes managing my trip home that much harder, but am now convinced on reflection that it is neither illegal nor immoral. But it is still dangerous because it can undermine the faith of the citizens in the banking system altogether, defeating the purpose. The restrictions should be removed as soon as possible, and authorities must convince people that they will never make a habit of it. In this connection I am concerned about Modi sarkar's overall poor communication and messaging skills, Modi's own individual brilliance notwithstanding.

To the question of why the angst, the clue lies in the nasbandi comparison. One approach to the ongoing white western conquest and dominance of countries like India is to force them into something bad and ill-advised like imposing family size limits and hold that wrong thing in reserve as WMD in case the SDRE native autonomously undertakes something risky but far-reaching, essentially taking responsibility for his own destiny (something the Ayn Rand wallahs like Steve Forbes constantly trumpet).

Angst is not the correct word for this. In fact it is a well-caculated and structured attack on India.

Yet another demonstration to the patriotic Indian that white western elite are our frenemies at best.
Not sure if you are an NRI or not, but outside India there is a hard limit of how much money you can withdraw from your bank account as cash
That may well be the case, I am one of the "lucky " ones who never came close to hitting that limit then.

Just reinforces my point, contra Forbes, there is no crime or immorality by GOI. It is all TFTA drama and psywar against SDREs commanding their own destiny, as shiv noted.
Last edited by KLNMurthy on 24 Dec 2016 22:07, edited 1 time in total.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Dasari »

Modi and govt needs to raise the ante further. Need to come out everyday for next few days and create a kind of fear for BM hoarders what is going to happen after Dec 30.

Though technically time is on their side and all of them can be caught, govt may not have the man power. The scrutiny can go on for months. So the compromise solution is for BM hoarders to subscribe to PMGKY program, though they can get away with 50% of their loot. If 50% of hoarders opt for this, then Govt will have sufficient man power to go after the rest very agrressively.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by Mukesh.Kumar »

Reporting from Calcutta today.
Two taxi drivers, our caretaker, security guard at colony, and pan walla. All said that no hitches. It does not affect us. It seems that demo hurt the middle class/upset module class more.

Even saw local tea shops in Santoshpur bearing PAYTM boards. Could not verify if they were working or not. Will do that tomorrow
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Re: Currency Demonetisation and Future course of Indian Economy

Post by UlanBatori »

" hard limit of 24k on how much cash I can withdraw from my account. "
Per week, AFAIK. If one needs more than that in cash per week, one needs a "current account" whatever that is.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by UlanBatori »

Pssst: What eej PAYTM pls?
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Re: Currency Demonetisation and Future course of Indian Economy

Post by UlanBatori »

The beauty of this is that ppl who missed the implications of the 700 million bank accounts, also missed the chance to think through the gubermint's sheer capacity for bloodymindedness.

Thus we hear of the smart-alecks who force the gold shops to re-open on Nov. 8 after 10PM - and obligingly went in under the mandatory CCTV view to do their bijnej.

They opened hajaar-hajaar accounts.
Their chamchas in the banks hoarded new notes to change under the table. Under CCTV.
.
They filled the Jan Dhan accounts of poor people with unaccounted cash.
They rushed out to their 10 banks and changed/withdrew the limit from each, though that was a violation.

Now comes the fun: the evidence is there for all of this. Will the govt prosecute? Won't they? It is certain that they CAN.

I don't think (Wo)manpower is an issue. With digital transactions, all these are visible with a few different Oracle Operators. Lists of ppl doing each crime will go to automatic Notification Generators, with a kind demand for pmt of fine etc.

The lines may be long at the IT counters after that. But oh! They will make it E-Z to pay the fine by Ungli tech.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by pankajs »

For people who are weeping rivers of tears for rural folks

http://www.thehindu.com/opinion/op-ed/A ... 793777.ece
Asking the right questions -- Bibek Debroy

Bank account penetration
I prefer to believe the country’s Prime Minister. “Just 10 years back only three out of every 10 households in our villages were benefiting from banking services. Today more than half of the rural households get the benefit of bank accounts. It will be our endeavour to ensure that all households benefit from bank accounts in the next two years.” This is from the then Prime Minister’s Independence Day speech in 2012. The speech doesn’t mention towns because there was no need to. All towns have bank branches. Financial inclusion, if interpreted as opening bank accounts, is primarily a rural problem. In 2012, the then Prime Minister {Maun Mohana} told us more than half of rural households have bank accounts and the rest would have bank accounts in the next two years, that is, by 2014.

<...>

To spread banking services, you don’t necessarily need branches. There is the Bank Mitra infrastructure, which caters to almost four times the number of sub-service areas addressed by bank branches. Thus we have the PRICE (People Research on India’s Consumer Economy) survey in August 2016, with more than 3,00,000 households. This shows 98.7 per cent of households have bank accounts (98.9 per cent u, 98.6 per cent rural), a fact worth remembering when citing dated data on households with bank accounts, such as from Census 2011. Incidentally, if one has financial inclusion in mind, total population is irrelevant. After all, below an age threshold, one can’t open independent bank accounts (more than 40 per cent of the population is less than 18.)
So 98% of rural household have bank accounts and Bank Mitras travel to the village to provide services of banks right at their door steps and the coverage is four times that of banks!
Last edited by pankajs on 24 Dec 2016 22:23, edited 2 times in total.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by KLNMurthy »

UlanBatori wrote:" hard limit of 24k on how much cash I can withdraw from my account. "
Per week, AFAIK. If one needs more than that in cash per week, one needs a "current account" whatever that is.
Correct, I neglected to add that.

Probably fine for most steady-state households. It's just that when cash expenses are high in the first week after my arrival, it makes things messy, needing to make transfers and get cash from relatives etc., till week 2.

No big deal, all manageable. Just a bit more stress that's all.
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Re: Currency Demonetisation and Future course of Indian Economy

Post by shiv »

UlanBatori wrote:Pssst: What eej PAYTM pls?
eet eej a mobile wallet - downloadable on to onej Andhroid smartphone. Needj loading with cash frm bank.Can be used to pay for large no of utilities, movie tickets, taxis etc

https://en.wikipedia.org/wiki/Paytm
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Re: Currency Demonetisation and Future course of Indian Economy

Post by shiv »

Riddle me this.

For the last 10 years no one has stood in a bank queue for withdrawing cash.

So where did people get all those 500/1000 notes from? From ATMs of course

Who uses ATMs? People with bank accounts and ATM cards

Who does not use ATMs? The poorest people - maybe 50% of Indians who either do not have bank accounts or enough of a bank balance to get an ATM card

How much do these poor people earn? Less than Rs 100 per day.

So where did India's poor get all those 500/1000 notes that cause them so soo much distress after demonetization? Nowhere. The poor in India have been dealing with only 100 notes and smaller denominations, and women less than men.

I posit that demonetization at the outset did not affect the poor at all, or very little. The poor may have been indirectly affected a little later as they passed on small denomination notes but could not earn much. That is the phase when they probably shifted to credit. But the notes situation is getting better now. The people who find it hardest to come are the people who were seeing a free flow of Rs 500 and 1000 notes.
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