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Demonetisation: Will it lead to a corruption free India?

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This article is timely and shows the real reason why our PM did what he did....Will this lead to elimination of corruption?....It may take time...The common man has to face difficulties initially...May be this ushers in a new India...At least the intention is noble!!

Thu, Nov 10 2016. 04 08 PM IST[h=1]We did say we wanted less corruption[/h]For decades, the honest have felt like fools in a nation that runs on graft. The complicity, and active encouragement, of the political leadership gave feet, legs and body to this parallel economy


Monika Halan



Some of us in India have paid, what I call, the ‘honesty tax’ for decades. Our money is salaried, there is nothing on top, we pay our taxes, keep our accounts clean, pay for large spends by card, do real estate deals in white and become the guys who obey traffic signals while others in bigger cars zoom away with a smirk. We pull out our cards and carry home our small shopping bag. The guy in the next aisle pulls out a brick of cash and thumbs out a lakh in notes to take home the high-value gadget. We drive our Maruti home with the EMI (equated monthly instalment) sitting in the backseat, the luxury SUV guy comes with a sack of cash and scrapes our car out of his way. We wait to buy a house with white money, don’t get the choice set, pay more and end up feeling like losers for being honest.
For decades, the honest have felt like fools in a nation that runs on graft. The complicity, and active encouragement, of the political leadership gave feet, legs and body to this parallel economy. There is a saying that in any organisation 25% of the people will be honest, always; 25% will be corrupt, always; and the middle 50% will look at the boss and do what he does. The political boss has spoken in India finally, giving teeth to the war against corruption by making currency notes of Rs500 and Rs1,000 worthless overnight.
Why will this help? It makes the current stash of undeclared cash useless. Those who did not take the government seriously and did not declare their unaccounted income by 30 September, by paying a 45% tax plus penalty, now see a 100% loss rather than a partial loss. Those who converted their cash into gold, art and real estate—the three sumps of black money—will sit on their assets for a while. When they do sell, the deal is likely to be completed electronically rather than in cash. With buyers unable to pay with old stashes of cash, how will the sellers sell? They will either barter or be forced to use a bank to route the money. Barter may work: in 2008, during the financial crisis, certain kinds of art became currency, after the price inflation in gold made it a bubble. Something similar may happen here too. Is it the end of black money? No. This is about raising the cost of keeping unaccounted for cash. There will be an underground market for sure: already you hear of a Rs1,000 note selling for Rs300 in the Mumbai grey market, but it just gets tougher to keep it black. (Part 2 in next post)

http://www.livemint.com/Money/WTRdjKNoA2OCsI0cWquYxN/We-did-say-we-wanted-less-corruption.html
 
The intent is evident. That is really heartening. The mechanics will just follow. If PM continues to take measures this way, the reality in the nation and its image will change for the better.
 
Yes, it is true that a large portion of undeclared assets may not be in cash. However they get harder to liquidate if the liquid supply of money is withdrawn. Bartering is the only option, but that brings its own share of problems.

Money in Swiss banks though is safe. For now.
 
My feeling is honest only will suffer more.Honest are mostly inefficient and foolish on money matters. Thats why they stay at bottom rung of society

Those who are enterprising and collected huge chests would also know how to convert them

I made a survey of who stand for hours in queues[ i have nothing better to do. It has become a sport of sorts.]Today queues are longer than yesterday. Most ATMs are

not dispensing cash as promised.The claim that sr citizen will get special treatment in queue is only remains as an announcement.

The banking system has been exposed badly. It is just not able to handle the rush everywhere.

I refuse to even try for changing the few notes I have .

No milk or vegetables ,so be it.

I collected enough curd, butter and milk to last for 3 days and more.

My veg supplies will last for 4 days more.

My credit rating is good enough for some provision shops for supplies without money .

So who needs new currency urgently?

I think I should follow the hero of film pichaikaran .

The funny incidents of today.

Some bought about a lakh worth of railway tickets for journeys month later which were issued even without a PAN card since there were no guidelines regarding that.Their hope is they can return

this later with small deductions and get good new money.The well off bought refundable air tickets for big money for return later. But govt moved deftly and converted them to non

refundable tickets.lol
 
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The intent is evident. That is really heartening. The mechanics will just follow. If PM continues to take measures this way, the reality in the nation and its image will change for the better.
I doubt that. It is going to cost them heavily.

There is a credibility gap.

This utter lack of experienced talent in running the govt , specially the economic ministries will result in more mess and confusion.

Every well meaning policy is not well thought out and very badly implemented leading to every ones disgust.

It may very well be a one term govt like vajpayees"
 
Modi's this drastic decision is not the end of it all.

I am sure he will follow it up with more such actions.

The criminal law would need an amendment to make it hard for corrupt officials to escape jail. There should be no bail even for those found to be corrupt.

Immobilising a large chunk of money from the circulation and replacing the stock with new currencies is not easy. It will take a little time to get adjusted.

The intention is good. Risk has been taken and is being managed. Let us wait.

If we go by the monetary theory, there will be a fall in demand for goods and services temporarily and there can be a fall in prices too for a short while.

Once the new currencies are in circulation our babus will be back with their original ways of taking mamool for everything. Our babus are notorious in the matter of taking mamool/bribe.

There can be two colleagues in a Government office sitting in the same room and working every day. They may even be sharing their lunch in the dining room. Working means taking bribe to do their normal work. If one attends to processing of staff housing loan applications or provident loans, he would expect his next seat friend to give the usual mamool to process if his application for a PF loan is to be processed. Friendship is different from job dharma. It is that horrible.

The bribe takers are going to suffer only a temporary set back. A police inspector's concubine may have to wait a few more months to get her necklace. A commercial tax officer's plan to own a new flat in a metro may have to wait a little longer. Once life is back to normal it will be fully normal again the only diufference being the bribe money will be the new colorful currency notes. LOL. Parasites.
 
I doubt that. It is going to cost them heavily.

There is a credibility gap.

This utter lack of experienced talent in running the govt , specially the economic ministries will result in more mess and confusion.

Every well meaning policy is not well thought out and very badly implemented leading to every ones disgust.

It may very well be a one term govt like vajpayees"

Dear Shri Krish,

We see talent at the highest level when they are willing to make far reaching reforms. There is no dearth of talent required for implementation. I think the government is willing to take bold steps be it in its foreign policies or in economic matters. It only bodes well for the Modi government.
 
The answer to the Q in the OP is a big :nono:

My maid servant put it in a nutshell: 'akkA! inimE 2000 rubA nOttAk kaLLap paNam seppAnga'!
icon3.png
 
I doubt that. It is going to cost them heavily.

There is a credibility gap.

This utter lack of experienced talent in running the govt , specially the economic ministries will result in more mess and confusion.

Every well meaning policy is not well thought out and very badly implemented leading to every ones disgust.

It may very well be a one term govt like vajpayees"

It will not cost them anything. Just wait and see.

I went today to see the situation in a local bank branch out of curiosity. The crowd thronging was comprised of only decently dressed middle class males and females though there are economically poor sections of the society living in the area. That was revealing. When a carpenter's wages per day is Rs. 650, that of a mason is 650, that of a chiththal is 550, that of a plumber if 650, that of an electrician is 700 where is the scope of accumulation of 500 and 1000 denomination notes? Almost 70% of the Indian population lives on a day to day or week to week basis balancing their income and expenses. So the inconvenience is only to the middle class which plans things on a monthly basis and has saving habit. And this middle class can always be taken for granted. They never make noise. They never protest. They reason out and rationalise even tough measures. They vote only for merit and never express anger.

This so called surgical strike with demonetisation has left a large section of the society untouched and so it is not a tsunami as is made out. That is the reason why politicians of all hues are either silent or supportive.

There is no dearth of experience or talent. All such decisions, because of their very nature have to be sudden and secretive. So it can not be shared with any one and precautionary measures can not be taken. Hence the suffering though temporary.

Wait and see.
 
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It is difficult to decide who is worse-politicians or bureaucrats?

Similarly private traders readily providing everything at a huge cost or Rationing shops of govt run by shopkeepers with corrupt official living off them and they supplying

substandard provisions at low cost after taking their cut.

So in a mixed economy , there is a choice.

People can work in MNCs and after retirement curse the govt servants.

Govt types after retirement will despise the MNCs for their low pensions and high cost economy they have promoted in the country.Lol
 
It will not cost them anything. Just wait and see.

I went today to see the situation in a local bank branch. The crowd thronging was comprised of decently dressed middle class males and females only though there are economically poor sections of the society also live here. That was revealing. When a carpenter's wages per day is Rs. 650, that of a mason is 650, that of a chiththal is 550, that of a plumber if 650, that of an electrician is 700 where is the scope of accumulation of 500 and 1000 denomination notes? amost of the Indian population lives on a day to day or week to week basis balancing their income and expenses. So the inconvenience is onloy to the middle class which plans things on a monthly basis and has saving habit. And this middle class can always be taken for granted. They never makle noise. They never protest. The reason out and rationalise even tough goings. They vote only for merit and never express anger.

This so called surgical strike with demonetisation has left a large section of the society untouched and so it is not a tsunami as is made out. That is the reason why politicians of all hues are either silent or supportive.

There is no dearth of experience or talent. All such decisions, because of their very nature have to be sudden and secretive. So it can not be shared with any one and precautionary measures can not be taken. Hence the suffering though temporary.

Wait and see.

In delhi, most of the labour class live in resettlement colonies in own houses built on land given by govt in joint families. Only those recently joining the work force from

bihar or orissa ,jharkand etc live 3 or 4 to a room in ghettos.

The domestic workers women on an average earn seven to eight thousand and men upto fifteen thousands.

Most of them joined jan dhan yojana and got bank accounts opened.

They are part of the middle class of delhi having more than a few 500 re notes

The old middle class owns cars, flats [bought on borrowed money], act rich and do not stand in queues.

They are part of the the crowd with some black money exposure.

They buy consumer durables without receipts and sales tax ,vat,speculate on real estate, travel on cheap air tickets and go on holidays to exotic locations.They would

send their servants to stand in queue if necessary.lol
 
Some wooden furniture were damaged by the heavy floods last year and since we were away for about six months in Boston,

we were planning to get the repair work done during this month. Now, we have postponed it to next year because we have a

get together of family and friends in December for which we need to pile up a good amount of money! Few visits to the crowded

banks are necessary to do that!
 
Part 2 (Live Mint article)

What about conversion to gold and real estate? Yes, conversion to gold will happen. But think it through— will you see a guy pull out five gold coins to buy an iPad at a mall? The government is just making the use of black money difficult. Why give just 4 hours? What would have happened in a month? It may have made the transition easier. Two things. One: cash would have been converted to gold and high-value purchases over the month. Already there are reports of brisk sales by jewellers till early morning of 9 November. Cash hoarders would have found ways to convert their money.
Two: cash that was about to die, would have found its way to the weakest in the food chain: those who don’t know they have to, or don’t have the power to, say no to getting paid with such notes
 
Part 3 & final

End note
It’s not as if Prime Minister Narendra Modi has not taken a risk—both personal and political. The move to demonetise currency notes, to suck out black money, will upset BJP’s key constituency: traders, realtors and small businessmen. The ground speak is that this government doesn’t know how to do dhanda (business)—who pays 30% tax anyway? It is unlikely that the party cadres preparing for election were prepared with Rs100 currency notes. If other parties have lost money, so has the BJP cadre. This is a big political risk. Modi is probably calculating that things would settle down in the next 18 months before the next general election. Modi also risks short-term growth by removing cash from the market. This cash pays for jewellery, high-value cars, gadgets, clothes, hotel bills. By suddenly making the stashes of cash useless, he risks offtake of goods from the market, which could affect the economy.
So the risk is real. Modi has taken a calculated gamble and we’re all hoping that it pays off. No transition is painless. He is pressing the reset button on corruption. We, who had so desperately wanted to kill corruption, now need to support this bold move by the government.
 
I am hopeful that this demonetisation will put downward pressure on inflation, specially in the real estate sector.
 
It is one of the biggest economic stimulus in country...

A game changer...

Interest rates will come down....

Inflation will go down..

Currency will appreciate...

Zero fiscal deficit next year...

Borrowing requirements of Government will go down...

Real Estate prices will also reduce ...

Black economy will evaporate..

Equity is a big beneficiary...

Lower borrowing cost for Corporates...

7 lac crores deposited back in to Banking system economy creates a multiplier effect on the economy ..Rs 20-25 lac crores is now available for productive use ...

Naysayers will have to change...

Please watch this excellent short video (just 11 minutes) with crisp analysis by Anand Rathi..Towards the end he also talks about the impact of Trump becoming US President


https://youtu.be/W-Bjw_SFNdM
 
1.Interest rates will come down -retrired people live on interest . so they lose

2.Inflation-People care about food inflation. Irrespective of banks being flush with money and food imports for shortages, restaurants will charge more due to VAT

rationalisation and supply demand mismatches leading to shortages.Cities like chennai or delhi food at hotels is three times what it is in rural areas.House Rents are

not exactly crashing while housing sector is languishing.

3. Not more than 30% of black money will enter the banking system These are only short term money which will go out as soon as better avenues are there for it. Who

wants 4-5% interest on money.More money will be there in hawala route-200% of what banks can mop up by govt move.

4. Govt is not banning P notes investment in stock markets. Most of it is from mauritious and other safe havens.

5. corporates are not going to the banks after the NPA witch hunt.Credit offtake is difficult for housing sector from banks.only vehicle loans and consumer loans some

might approach banks.In rural areas, buying of two wheelers with harvest money is at standstill due to govt move .This is normally a cash trannsaction
 
Bonanza to Banks...Getting huge deposits...Rs 53000 crores in just 1.5 days ....Will lead to lower interest rates

ஒரே நாளில் ரூ.53 ஆயிரம் கோடிக்கு 500, 1000 நோட்டுகள் "டெபாசிட் செய்யப்பட்டுள்ளது: அருந்ததி பட்டாச்சார்யா

By DIN | Published on : 11th November 2016 05:42 PM | அ+அ அ- |


arundhati_bhattacharya.jpg
புதுதில்லி

ரூ.53,000 கோடி "டெபாசிட்': பாரத ஸ்டேட் வங்கிகளில் வியாழக்கிழமை தொடங்கி வெள்ளிக்கிழமை பிற்பகல் 2 மணி வரை சுமார் ரூ.53 ஆயிரம் கோடிக்கு 500, 1000 நோட்டுகள் "டெபாசிட்' செய்யப்பட்டு இருப்பதாக அதன் தலைவர் அருந்ததி பட்டாச்சார்யா தெரிவித்தார்.
இதுதொடர்பாக, மும்பையில் அவர் வெள்ளிக்கிழமை கூறியதாவது: நாடு முழுவதுமுள்ள பாரத ஸ்டேட் வங்கிகளில் வியாழக்கிழமை ரூ.31 ஆயிரம் கோடியும், வெள்ளிக்கிழமை பிற்பகல் 2 மணி வரை ரூ.22 ஆயிரம் கோடியும் டெபாசிட் செய்யப்பட்டுள்ளது.

பழைய நோட்டுகளுக்கு பதிலாக சுமார் ரூ.1500 கோடிக்கு பணத்தை மாற்றிக் கொடுத்துள்ளோம். வாடிக்கையாளர்களின் வசதிக்காக, எங்களது வங்கிகளில் கூடுதல் கவுன்ட்டர்கள் திறக்கப்பட்டுள்ளன. நாடு முழுவதும் எங்களது வங்கிகளின் 29,000 ஏடிஎம்கள் செயல்பாட்டுக்கு வந்துள்ளன. மீதமுள்ள 21,000 ஏடிஎம்கள் விரைவில் செயல்பாட்டுக்கு கொண்டுவரப்படும் என்றார் அவர்.


http://www.dinamani.com/latest-news...ள்ளது-அருந்ததி-பட்டாச்சா-2596687.html?pm=home
 
If I sit at my sweet home thinking of the crowded banks, can anything be achieved? A big :nono:

So, I ventured shopping today. Wow! The nearby supermarket, run by our 'aNNAchi', accpted OHD notes. :cool:

Without wasting a minute, I bought provisions for two months. This IS business. :thumb:

P.S: The store keeper of state govt.'s 'Amudham', was 'driving flies' because he is not allowed to accept OHD notes. :(
 
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If I sit at my sweet home thinking of the crowded banks, can anything be achieved? A big :nono:

So, I ventured shopping today. Wow! The nearby supermarket, run by our 'aNNAchi', accpted OHD notes. :cool:

Without wasting a minute, I bought provisions for two months. This IS business. :thumb:

P.S: The store keeper of state govt.'s 'Amudham', was 'driving flies' because he is not allowed to accept OHD notes. :(

By posting it here you are making life difficult for the 'aNNAchi', R R ji, as he is violating the Government orders as he is not supposed to accept the demonetized notes, being a private person,.
 
Dear Ganesh Sir,

It may not be a problem for the shopkeepers who deposit the money in banks since these notes are allowed till the end of this year.

Another fancy store nearby also accepts OHD notes but the only condition is that customer should not ask for balance cash! :)
 
I do agree, Madam, notes are allowed to be deposited but the transactions are not! There are many raids across the country on this account. There is another thread on this subject. News channels are also flooded with this subject. Such acts are being treated as converting black money. The only legal way of changing your old currency is to deposit it in your account.
 
Dear Ganesh Sir,

It may not be a problem for the shopkeepers who deposit the money in banks since these notes are allowed till the end of this year.

Another fancy store nearby also accepts OHD notes but the only condition is that customer should not ask for balance cash! :)


I guess they will extend it till 31 March 2017!!
 
[h=1]Demonetisation a big cleanliness drive in India: PM in Japan[/h]November 12, 2016 13:16


12live-modi1.jpg


While addressing the Indian diaspora in Japan, PM Modi spoke of his huge fight against black money in the form of the demonetisation of the Rs 500 and Rs 1000 notes.



Here are the highlights of his speech:


>> I salute each and every Indian. Many families had weddings, health problems...yes they faced inconvenience but they accepted the decision


>> Money that has been looted has to be recovered. And the rules have to be same for everyone


>> This (demonetisation) is a big cleanliness drive of the country


>> This is not an overnight decision, first we had brought in a scheme. It's not that no opportunity was given, it was given


>> This government will do everything to protect the interests of honest citizens


>> We cannot guarantee that after the completion of this scheme, there will be no further move to keep the corrupt in check


>> I will fully back honest people and go to any extent to punish the corrupt


http://news.rediff.com/commentary/2...-pm-in-japan/c1c6e2811b66c647c58def153dae567f
 
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