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Old 24th February 2017, 15:38   #2341
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by V.Narayan View Post
Our tax collections are poor due to endemic tax evasion by those on whom it is leviable
So this demonetization has resulted in the IT department identifying 1.09 Crore accounts in which large deposits were made. Eventually can we expect about 25% of these to be tax evaders?

http://www.livemint.com/Politics/54o...-scrutiny.html

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Agriculture and allied activities such as fisheries, logging, dairy make up 19% of our GDP and employ 49% of our labour. Services & Manufacturing make up 81% of GDP and 51% of labour.
I had posted these numbers here sometime back; but the conclusion I drew aren't what you have done. Mine is that we need to provide the workforce locked into agriculture an exit option so that they can earn their living in other sectors, evening out employment and GDP contribution shares.
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Old 24th February 2017, 17:22   #2342
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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I am simply saying why I believe that collecting taxes by a dishonest and/or inefficient government/bureaucracy to the extent that now exists in India feels like robbery, and will therefore be avoided by fair means or foul, weighing the risks involved in doing so. One would have to be a very rare exception to behave otherwise.

Your last sentence quoted raises an interesting question: is not paying the taxes due by businessmen/self employed people objectionable to you just because as a salaried individual you don't have access to tax evasion? It seems to me that this is the case with a large majority of Indians who "honestly" pay their taxes. There is nothing honest about paying taxes when tax is deducted at source, it is just helplessness. And even here, the practice of doing what ever is still possible by way of bogus rent receipts or leave travel bills or whatever little else that is permissible as a deduction before TDS is imposed, is not rare at all.

People keep pointing out to how small the direct tax base is in India and that many Indians aren't paying income tax even when due. I am merely pointing out that this isn't because as a people Indians are less honest genetically than people from countries that pay their taxes honestly - I think more highly of Indians than to tar them with that brush. No one in the world likes paying their taxes, but for Indians it feels more of an imposition because there is much more stealing away of the taxes that they pay. And this is visible stealing because corruption/inefficiency is visibly rampant.

It is a lot easier for a government/bureaucrats to declare war on its own citizens than to clean up their own act, is the conclusion one draws these days.
People everywhere in the world are alike with respect to "paying" for a common cause. Thats why we have "Taxes" and not "Donations" around the world. If it is voluntary, you can rest assured it would not happen.

This is very clear. But these repeated statements about the Government as if you are an outsider is not really clear. The most important reason why India has an "inefficient" government is people like you and me don't take part. This is a government of the people, by the people, for the people. The largest of its kind.
Paying taxes is your duty. Dont you see how its a vicious circle ? You evade citing the inefficiencies and you profess about it to your friends and family -- it becomes more inefficient.

I cant understand how the tax evaders can be proud of it if they know how democracy works.
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Old 24th February 2017, 21:15   #2343
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

The note ban thread has eventually and very rightly turned out to be a discussion on the role of Government in our lives on one hand and our collective duties and responsibilities as citizens on the other.

We have at last and at least realised the veracity of the old dictum no man is an island. The silent majority has decided to speak, albeit in whispers.

For the post-emergency generation of youngsters and the middle aged, this is perhaps the first real experience of manufactured hardship.

History will certainly mark this event as an important milestone, success or failure notwithstanding.

PS: Please read this interesting article by Chetan Bhagat published in 2010. http://toi.in/R8tJba/a19li
Though not a huge fan of his fiction, I do agree with some of the views presented in this article.
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Old 25th February 2017, 05:35   #2344
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Excellent article in the link thanks - I too don't read his fiction, but a lot of his writing on current topics is relevant and insight filled, even if one has difficulty with all his conclusions.

For instance here is the conclusion in the article that is a common theme, but one that I have a problem with these days:
"If we resolve today that we will vote on the basis of performance alone...it would be enough to change voting patterns in the next election. And then, maybe, we will start moving towards a better India."

What does one do, if as is very common these days for all elections from the ward to a parliamentary constituency, the slate of candidates is itself poor and there is no one there that meets that criteria? How does it then matter, who one votes for? We will just gyrate from one party to the other, usually away from the incumbent party, with little to differentiate between them in terms of marked improvement in governance.

Accelerating the change therefore needs a rapid improvement in the options on offer, to a slate of candidates that offers a real choice in that direction. How is the silent majority going achieve that by just speaking, even loudly?

I can see the answer, but I can't see it happening: it is no longer enough for the silent to vote, they need to put themselves forward as candidates for public office, in large numbers, such that the quality of the slate of candidates takes quantum leaps forward. Starting from wards in municipal elections and from there in the direction of parliamentary candidature, not the other way around, the best among us have to stand for public office. Just voting isn't going to have an impact other than an evolutionary one.

Sadly, I don't see that happening in terms of a start even in a small way today and we then have no choice but to accept that as a country we will progress at the rate of the lowest common denominator, even if the voter turnout improves. Because improvement in governance cannot be faster than the improvement in the slate of candidates for all public offices.

Last edited by Sawyer : 25th February 2017 at 05:37.
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Old 26th February 2017, 21:54   #2345
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Originally Posted by binand View Post



What is your point? ATMs in India have always dispensed fake notes - sad, but true. See, for example:



http://www.thehindu.com/news/cities/...cle5596161.ece

http://www.news24.com/SouthAfrica/Ne...o-ATM-20150915

http://timesofindia.indiatimes.com/c...w/55657251.cms



So while the instance you quote is whimsical, I fail to see how it relates to any discussion on the success or failure of the demonetisation programme.

Err , wasn't counterfeit notes given as another big reason for the move other than black money?

If within 100 days of the move , we start getting Children bank of India notes dispensed at a ATM in the national capital, what does it speak of the intended move - that was the point I made.

And please don't define what is related to the topic and what is not - don't think anyone here gave you that authority.
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Old 26th February 2017, 23:04   #2346
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

OK, since this discussion of the ATM loaded with notes from the children's bank is persisting - we need to draw a distinction between counterfeit notes (look like the real thing, prentends to be legal tender, but not actually issued by RBI) and play money (does not purport to be legal tender) - this instance is one of play money, since the note never states itself to be legal tender (it talks about owing the bearer 2000 coupons, not 2000 rupees), although it is visually styled similar to the newly introduced notes.

Misleading & likely to confuse? Absolutely yes, but only under the wrong circumstances. Illegal - not sure if the design's similarity itself is illegal, that's for the RBI to define. Definitely illegal on the part of the chap who loaded an ATM with it, though.

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Old 26th February 2017, 23:46   #2347
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by arunphilip View Post
OK, since this discussion of the ATM loaded with notes from the children's bank is persisting - we need to draw a distinction between counterfeit notes (look like the real thing, prentends to be legal tender, but not actually issued by RBI) and play money (does not purport to be legal tender) - this instance is one of play money, since the note never states itself to be legal tender (it talks about owing the bearer 2000 coupons, not 2000 rupees), although it is visually styled similar to the newly introduced notes.
But it is not that counterfeits are otherwise not coming in. There was a whole article I read the other day on how the counterfeit notes have started pouring in from the Bangladesh border. The BSF there has already alerted the government but they seem helpless as the villagers are being forced into submission by the wrong doers. And it is more or less running the economy of those border villages. So, as pointed out by many people before too, this intended aim of demonetisation was always going to fail. Counterfeit currency is a problem being faced by every country and withdrawing all the current currency to curb this menace is a very funny and idiotic strategy. Sooner or later they will match the new notes and it will again pour in. The worst part is earlier most of the counterfeit currency was in the 500 denomination. Now it will target the 2000 currency note and cause a much greater havoc and also more damage to the common man, if he gets cheated by someone and lands up with such a note.
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Old 27th February 2017, 00:03   #2348
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by drmohitg View Post
But it is not that counterfeits are otherwise not coming in.
I agree to the wider point, my earlier comment was aimed at this one specific instance of play money - it could just as easily have happened in a pre-demonetization era.

In terms of actual counterfeit notes (particularly when one considers the widely-held belief that there is the backing of other governments), issuing notes with no revised anti-counterfeiting technology was bound to just buy a brief respite - this was something pointed out at the very outset of the exercise, and is something I am in agreement with you.

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the 2000 currency note and cause a much greater havoc and also more damage to the common man, if he lands up with such a note.
On a lighter note, I don't know about you, but for me getting even a legal 2000 note causes all sorts of havoc in getting it changed

Last edited by arunphilip : 27th February 2017 at 00:14.
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Old 27th February 2017, 10:36   #2349
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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People everywhere in the world are alike with respect to "paying" for a common cause. Thats why we have "Taxes" and not "Donations" around the world. If it is voluntary, you can rest assured it would not happen.

This is very clear. But these repeated statements about the Government as if you are an outsider is not really clear. The most important reason why India has an "inefficient" government is people like you and me don't take part. This is a government of the people, by the people, for the people. The largest of its kind.
Paying taxes is your duty. Dont you see how its a vicious circle ? You evade citing the inefficiencies and you profess about it to your friends and family -- it becomes more inefficient.

I cant understand how the tax evaders can be proud of it if they know how democracy works.
Isn't it funny that the same people who wouldn't willingly pay a dime as tax would instead get together to elect an authority called government to forcefully take tax from themselves?
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Old 27th February 2017, 10:43   #2350
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by arunphilip View Post
OK, since this discussion of the ATM loaded with notes from the children's bank is persisting - we need to draw a distinction between counterfeit notes (look like the real thing, prentends to be legal tender, but not actually issued by RBI) and play money (does not purport to be legal tender) - this instance is one of play money, since the note never states itself to be legal tender (it talks about owing the bearer 2000 coupons, not 2000 rupees), although it is visually styled similar to the newly introduced notes.
It really does not matter if its play or counterfeit when your account gets debited 10k, and you receive 8k regular and 2k churan label.
If a play note can infiltrate an ATM, counterfeits may already be on their 10th transaction now, undetected.
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Old 27th February 2017, 11:55   #2351
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Isn't it funny that the same people who wouldn't willingly pay a dime as tax would instead get together to elect an authority called government to forcefully take tax from themselves?
Don't think that is the Indian mentality (the underlined part). The people expect the elected government (whom they elect for a wide variety of reasons; not essentially the concept of democracy) to provide them with 1st World type facilities, without thinking for a second from where the money would flow in. That is left to the government of the day. The governments for sure know tax revenue is one way to get the money they want, and some of them do a better job of collecting the tax dues. So pay taxes at 3rd world rates, but expect 1st world type facilities; if you ask me this is mainly because of too much of "socialism" which has crept in.
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Old 27th February 2017, 11:58   #2352
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Don't think that is the Indian mentality (the underlined part). The people expect the elected government (whom they elect for a wide variety of reasons; not essentially the concept of democracy) to provide them with 1st World type facilities, without thinking for a second from where the money would flow in. That is left to the government of the day. The governments for sure know tax revenue is one way to get the money they want, and some of them do a better job of collecting the tax dues. So pay taxes at 3rd world rates, but expect 1st world type facilities; if you ask me this is mainly because of too much of "socialism" which has crept in.
Taxes are socialism. More taxes, more socialism. Its amusing to see the right bat for more taxes.
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Old 27th February 2017, 12:32   #2353
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Expecting elected representatives to actually do their defined job (collecting and using taxes judiciously being part of the job description) is socialism now? I must have missed the memo redefining the word.

I should probably call my boss a socialist too when he tells me I missed some of my annual targets during my appraisal. How dare he hold me accountable?
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Old 27th February 2017, 12:41   #2354
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Originally Posted by civic-sense View Post
Taxes are socialism. More taxes, more socialism. Its amusing to see the right bat for more taxes.
Take a look at Hayek's book: Road to Serfdom. Both Socialism and Capitalism lead to the same thing. The 200 or so pages are tough reading, but very illuminating. Often it is difficult to imagine that the book was published in 1943! It is so current.
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Old 27th February 2017, 13:09   #2355
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

This is ought to happen if we elect people who rule with their emotion/ alternative facts. We get, border walls to prevent illegal immigration and demonetization to curtail black money hoarding, terror financing etc.

This shows that democracy is working though, it allows the people's wish to come true however extreme their views are. Is it just me or are we seeing a change in political spectrum, the traditional left Vs right is giving way to authoritarian Vs liberalism.

I always used to hate the western media's portrayal of India, they always show the poor, the under developed and not the developments, I thought. If we look at objectively, it is infact true. Truth sometimes hurt, but it is better to be confronted by hard truth than comforting lies. And I am not going to blame the government nor the politicians for the state we are in, after all they are not aliens right, they came from our society.

We need a political revolution to break the shackles but for a country which is as diverse as India, it will be hard to find an ideology that transcends cultural, linguistic, religious identities and bound us together. With the current political climate, I don't see this coming any time soon.

Truth to be told I was happy with the whole demonetization move for the first few days, since I was naive about the scale and thought that the government is going to execute a well planned move and it will be backed up by even more reforms. Well, I'm disappointed. Though the demonetization move has had little impact on us (Bhpians) or the people around us, can we take those anecdotes and make a sweeping generalisation that hence it will be the same for rest of India.

The whole exercise is an ill planned one and what ever tangible benefits highlighted by the government during the initial phase was anyway temporary like reducing corruption, counterfeit currency, terror financing etc.

Sorry for the rant, this thread anyway is turning to be an academic debate, so thought of chipping in with my views.


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Originally Posted by sgiitk View Post
Take a look at Hayek's book: Road to Serfdom. Both Socialism and Capitalism lead to the same thing. The 200 or so pages are tough reading, but very illuminating. Often it is difficult to imagine that the book was published in 1943! It is so current.
Sir, I have this theory on socialism. It will work on countries with less population and there is a critical mass, people who are contributing vs the beneficiaries. Once the balance is lost, it will start putting strain on the system. It is not scalable is what I believe, it ought to become rather inefficient for larger populations. At the end of the day, some one has to bear the cost, right. And it is a general human tendency to give zero damn, if it provided free by the government.

I will give a go on the book you mentioned once I get time.

Last edited by ecenandu : 27th February 2017 at 13:37. Reason: typos
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