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Old 20th January 2017, 12:33   #2206
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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No, that is not true. The truth is you are unable to appreciate that there isn't a single executive action that won't hurt someone.
My post was merely to say that women do have the need to be super secretive about savings, and this move can be devastating to some of them.

I stopped posting about the note ban. It's a good move that fell short of delivering the low hanging fruits as hyped up. We have to wait and see if the effort persists to harvest the fruits that are hard to reach.
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Old 20th January 2017, 12:41   #2207
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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The fact is that India is primarily a cash economy and while there is a very large percentage of people who have unaccounted money, the first steps should have been to tackle the people with the most amounts of black money and to close all avenues of tax evasion.
How do you do that in a cash economy? Suggestions welcome.

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Secondly, do you feel that the future generation of black money and avenues of evasion have been addressed?
We won't know the impact of this move in short term. Give it at least a year.

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So please excuse me for thinking that our government has destroyed the credibility of the Indian rupee
How did it destroy the credibility of Indian rupee? Has there been massive inflation or massive drop against foreign currency since Nov 8?
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Old 20th January 2017, 12:49   #2208
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

I tried a digital transaction using BHIM app and it failed miserably. Around 500Rs is now in no man's land. I have been a big supporter of this initiative. Still I am. But incidents like this shake your confidence a lot. I have been using net banking and credit cards for online transactions for over 10 years now. But there were hardly any failures. BHIM surely has a long long way to go to become reliable.

Last edited by poloman : 20th January 2017 at 12:51.
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Old 20th January 2017, 12:52   #2209
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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How do you do that in a cash economy? Suggestions welcome.
The IT dept could have initiated raids on politicians, businesses, individuals etc. suspected of huge cash hoardings. Its not rocket science when you read about the scandals in the news papers on a daily basis. Those raids itself would have yielded substantial unaccounted income.

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We won't know the impact of this move in short term. Give it at least a year.
True, the real impact would be known only post the IT dept scrutinizing and recovering of unpaid taxes on all cash deposits, so would take over a year easily.


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How did it destroy the credibility of Indian rupee? Has there been massive inflation or massive drop against foreign currency since Nov 8?
No inflation, but the Indian rupee was widely used and accepted in neighbouring countries, like Nepal, Bangladesh, Bhutan, Sri Lanka, Singapore, HongKong, Dubai etc. and even popular with NRI's/frequent visitors to India. No more. People will not be willing to hold the Indian rupee, especially the higher value notes any longer. This is partly due to the widely circulated rumours that these new 2000 Rs notes are a stop gap measure and would also be demonetized shortly.
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Old 20th January 2017, 13:15   #2210
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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No inflation, but the Indian rupee was widely used and accepted in neighbouring countries, like Nepal, Bangladesh, Bhutan, Sri Lanka, Singapore, HongKong, Dubai etc. and even popular with NRI's/frequent visitors to India. .
Why should should be important or a matter of concern for the government of India? I think rupee is still non convertible. You shouldn't be holding it outside india.
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Old 20th January 2017, 13:16   #2211
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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The IT dept could have initiated raids on politicians, businesses, individuals etc. suspected of huge cash hoardings. Its not rocket science when you read about the scandals in the news papers on a daily basis. Those raids itself would have yielded substantial unaccounted income.
Unfortunately, the IT dept itself is highly corrupt. In a cash economy, they can be easily paid off not to raid. So they raid only those who those don't pay them. My company used to get regularly raided by IT/ST/CT dept because I pay nothing to those depts. After returning empty handed few times, now they don't bother.

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No inflation, but the Indian rupee was widely used and accepted in neighbouring countries, like Nepal, Bangladesh, Bhutan, Sri Lanka, Singapore, HongKong, Dubai etc. and even popular with NRI's/frequent visitors to India.
That means it was used for tax evasion even abroad. When you pay in rupees in a foreign country, it simply means you are avoiding sales tax and the receiver is avoiding income tax, in that country. Yup, no more. That is not a real measure of value of rupee.
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Old 20th January 2017, 13:32   #2212
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Why should should be important or a matter of concern for the government of India? I think rupee is still non convertible. You shouldn't be holding it outside india.
NRI's and frequent visitors to India prefer to keep some Indian currency for their next trip to India. It allows them to pay for taxi fares etc from the airport without having to pay the highly inflated foreign exchange rates at airports. Contrary to your belief, holding upto 25000 INR is permissible or was permissible earlier.

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Unfortunately, the IT dept itself is highly corrupt. In a cash economy, they can be easily paid off not to raid. So they raid only those who those don't pay them. My company used to get regularly raided by IT/ST/CT dept because I pay nothing to those depts. After returning empty handed few times, now they don't bother.
So, rather than fixing a corrupt department, we now penalize the entire set of law abiding citizens by making them queue up for hours to access their own funds? Forget about the adverse impact it has had on various sectors.

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That means it was used for tax evasion even abroad. When you pay in rupees in a foreign country, it simply means you are avoiding sales tax and the receiver is avoiding income tax, in that country. Yup, no more. That is not a real measure of value of rupee.
What are you saying? When a person pays for a product or service in INR in Nepal how does that equate to sales tax evasion?

It just shows that there is enough commerce between the 2 countries and the traders there accept your local currency. For your kind information, earlier the Indian currency was legal tender in the Middle East and many parts of Asia. Was that all sales tax evasion? Seriously???

The value of a currency is only based on its acceptance. People valued the Indian Rupee for its stability just like people value the US$ and the British Pound. Now that stability and the trust in the INR has been eroded, and people will be hesitant to accept INR.
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Old 20th January 2017, 14:10   #2213
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It allows them to pay for taxi fares etc from the airport without having to pay the highly inflated foreign exchange rates at airports.
Isn't that because of cash economy? Now that taxis (Uber, etc) accept Paytm, one less reason to carry it.

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So, rather than fixing a corrupt department
Oh, so corrupt departments can be cleaned up without removing cash economy. I like to hear your ideas on that.

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What are you saying? When a person pays for a product or service in INR in Nepal how does that equate to sales tax evasion?
When a seller accepts foreign currency, how is he going to account for it? Have you ever received a receipt in any country while paying in foreign currency?

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For your kind information, earlier the Indian currency was legal tender in the Middle East and many parts of Asia. Was that all sales tax evasion? Seriously???
If it was considered legal tender in that country, then shops can give out tax receipts for foreign currency. So, have you ever received a receipt in any country while paying in foreign currency?

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Now that stability and the trust in the INR has been eroded, and people will be hesitant to accept INR.
Erosion of trust in rupee as a non-legal tender in some foreign county is not of any consequence to Indian economy. This is like saying "Log kya Sochenge...". RBI wants you to convert it before use so that it comes back to banking system. This is an intended effect, RBI won't cry over this.
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Old 20th January 2017, 14:23   #2214
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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When a seller accepts foreign currency, how is he going to account for it? Have you ever received a receipt in any country while paying in foreign currency?

If it was considered legal tender in that country, then shops can give out tax receipts for foreign currency. So, have you ever received a receipt in any country while paying in foreign currency?
Just FYI, not to argue, Zimbabwe has no official currency as of now. They accept all the major world currencies. They have sales tax too. Some shops will give receipts for even Indian rupee.

This country has nine currencies

Last edited by deerhunter : 20th January 2017 at 14:27.
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Old 20th January 2017, 14:33   #2215
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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.....unable to appreciate that there isn't a single executive action that won't hurt someone......
Same as some people on here seem unable to sympathize with someone whose situation they can't empathize with?

You're right, there are no perfect solutions, but it doesn't hurt to look beyond one's personal blinkers sometimes. Nothing to do with demonetisation itself, it's a human thing.

Last edited by Chetan_Rao : 20th January 2017 at 14:34.
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Old 20th January 2017, 14:50   #2216
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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If it was considered legal tender in that country, then shops can give out tax receipts for foreign currency. So, have you ever received a receipt in any country while paying in foreign currency?
Wow, so this move basically takes care of tax evasion in foreign countries as well? what a master stroke
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Old 20th January 2017, 15:12   #2217
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Just FYI, not to argue, Zimbabwe has no official currency as of now. They accept all the major world currencies. They have sales tax too. Some shops will give receipts for even Indian rupee.
Yes, as long as it is legal currency in that country, receipts can be given and tax can be collected on foreign tender.

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Same as some people on here seem unable to sympathize with someone whose situation they can't empathize with?
How does it matter whether they empathize? My RE investments have suffered massive setback thanks to demonetization. But I am indifferent to people gloating at my loss.

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Wow, so this move basically takes care of tax evasion in foreign countries as well? what a master stroke
You think so? I doubt it. Instead of using Indian currency, they will use probably demand dollar or euro. Tax evaders don't change their habits so easily unless their really cornered.
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Old 20th January 2017, 15:37   #2218
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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.......
.....I am indifferent to people gloating at my loss.......
Me neither, but it matters to others. Who are we to decide whether it should/shouldn't?

I'm surprised this is coming from someone who's usually a staunch opponent of mass generalization.
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Old 20th January 2017, 16:26   #2219
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I tried a digital transaction using BHIM app and it failed miserably. Around 500Rs is now in no man's land.
I'm sorry about this and I hope it wasn't a significant loss.

This was and is my biggest worry about jumping into the cashless bandwagon, especially with the 'sarkari' tools. The apps have been hurriedly pushed into the world with a questionable amount of preparation and will take some sacrifices along the way.

Most of my friends whom I spoke to about these, even if they were staunch supporters of demonetization, are hesitant to try out the app or any other govt. provided electronic payment system for the fear that a software bug will wipe out their entire bank balance and leave them running between govt. and bank for their money.
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Old 20th January 2017, 16:48   #2220
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Isn't that because of cash economy? Now that taxis (Uber, etc) accept Paytm, one less reason to carry it.

Oh, so corrupt departments can be cleaned up without removing cash economy. I like to hear your ideas on that.
My friend - You seem to be hell bent on claiming that the demonetization is a success and has wiped out the menace of black money, and the inconvenience to us is a necessary evil.

I have tried to point out how that is far from the truth, but I don't think you're really interested in the other point of view.

Good luck with your beliefs and for your sake, and for the sake of this country, I hope that you're right and I'm wrong.

All the very best!
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