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Old 1st September 2017, 12:00   #2476
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sgiitk View Post
I am not too sure they failed miserably. Tax revenues up, no. of tax payees up, black economy down, so imho they succeeded quite well. Today the bank queues are a faded memory.
Yes, they did succeed to a small extend but was the whole pain worth for such small gains. Got below highlighting success of demonetization. While reading it, i have a laugh at myself.

http://www.narendramodi.in/demonetis...country-536794

Highlights below -

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  • In a Country of 125 crore people, they are patting their back for adding 56 lakh new tax payers!!!! .
  • Only Personal IT returns grew means only small fish were targeted.
  • If one see carefully, all stats are in percentage terms since they suit them.
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  • Above proves my biggest fears of banks recapitalization using demonetization as a means. More cheap loans to big corporate without due diligence means more bad loans. ultimately we tax payer end up paying for them all.
  • Digital payments increased means more profits for banks via way of transaction fees. So i am paying for using my own money as well !!
  • 50 Lakh new bank accounts opened. That's where that black cash went in a legal way. So more money to banks who were on the verge of collapse.
Few examples who is benefiting most from current govt -
  • A certain privately held telecom company have invested almost 85 k crores without generating single rupee in revenue till early 2016. We all know who it is but question is where did this 85 K crores came from suddenly. They have a target of investing 1.5 L crores as on March 2016. Said company continue to doll out freebies to users like us happily until 6 month ago.
  • I am not digging into another big business house in Gujarat into ports et all who got a big mining contract in Australia post take over of current govt. Funny thing, the said project was mirrored in environmental concerns earlier and all suddenly went into air.
  • The famous fighter plane deal which was tweaked to suit a business house who is struggling to survive & is a new entrant in defense space. Despite lack of experience that company went ahead into a joint venture with this house.

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Old 1st September 2017, 12:49   #2477
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Just one point from Sushil's post got my attention. Reg the 56l tax payers out of a country of 125cr. ~50% of population is <19 yrs or > 65 years. Further if you consider high unemployment among the another 10% of 20-25 year olds, ~ 52-53% are not even having income to file. Now consider the number of farmers in India. Estimates range from 25-40%. Mind you...most are above 20 years and less than 65 years in age. So no overlap with the above 52-53%. Let's take a median of 32%. Agriculture income is non taxable. So in total that's 85% population not eligible to pay taxes. I'm not done. Take women. They form around 48% of population and ~ 15% have full time employment. Let's assume this universe contributes very conservatively another 5% of no income folks. Hence, in total , around 90% of population probably doesn't have any significant taxable income. So that leaves us with 12.5 Cr of targettable population. Do the numbers look better now ?
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Old 1st September 2017, 13:05   #2478
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

I am not with a left mind set. I too voted for so called right wing politicians fully knowing their ideology. Being employed myself in private sector and reaping the benefits of same , i am a hug fan of private entities.Where did i said that "profit is bad".

My grouse is that while middle class is struggling to make ends meet, political class is burdening it with more and more taxes and stupid decisions. I too supported demonetization but clearly they did it to gain political mileage without properly due diligence & for filling the bank coffers. Because of such decisions, economy have slowed down. Job growth is in negative almost. Same time, Where is the promised reduction in cost due to GST. It is all in Air IMO

http://epaperbeta.timesofindia.com/A...01092017001026

Last edited by GTO : 1st September 2017 at 17:05. Reason: Quoted post has been deleted
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Old 1st September 2017, 13:17   #2479
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sgiitk View Post
I am not too sure they failed miserably. Tax revenues up, no. of tax payees up, black economy down, so imho they succeeded quite well...
They could have done better by re-organising the IT dept. Really.

Quote:
Today the bank queues are a faded memory.
Not for the ones whose relatives died. 100+ lives were lost. Atleast. Do we need a child's body wash up the beach to realise that public suffered?

Quote:
Originally Posted by .sushilkumar View Post
...While reading it, i have a laugh at myself.

http://www.narendramodi.in/demonetis...country-536794

Highlights below -

Attachment 1671572[list][*]In a Country of 125 crore people, they are patting their back for adding 56 lakh new tax payers!!!...
That 56 lakh figure is false. AFAIK It's simply the number of assessees who paid tax online.

I understand that the PMs Independence Day Speech writer could've made a mistake when he announced that, but can't believe they put it on the website !

Actually when journos asked for the source of the statement, officials refused clarification saying it's not a newspaper article for the PMO to be obligated to disclose sources!

Anyway.
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Old 1st September 2017, 13:27   #2480
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

@ sgiitk, There is no left left now. Whatever little of left is left, it is actually right. The right wants to set the left right, but the left says we are all right but we pretend to be left. When the left and right merge, there is a dead end.
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Last edited by GTO : 1st September 2017 at 17:05. Reason: Quoted post has been deleted
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Old 1st September 2017, 13:34   #2481
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by GrammarNazi View Post
That 56 lakh figure is false. AFAIK It's simply the number of assessees who paid tax online.
Point is not if It's false or not, point is it can't be termed as 'drastic' improvement due to demonetisation.

It's all about how skilled you are with the marketing.

Check out the data of the previous years as well, thanks to the efforts of the economists led the nation in the past:

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Source: http://www.livemint.com/Politics/C4Q...x-collect.html

Last edited by tbppjpr : 1st September 2017 at 13:36.
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Old 1st September 2017, 13:34   #2482
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

So, after reading the press and reactions from most politicians, the Press and some individuals, I assume they'd have preferred NOTHING was done to increase tax compliance and reduce unaccounted wealth. No wonder the country takes two steps forward and one step back!!

As for people dying due to demonetization that is pure sentimental hogwash fit for a TV serial or the movies. My wife and I have stood in long queues for hours to withdraw cash without groaning or moaning. If people can stand in equally long queues to buy the latest blockbuster movie tickets without dying they sure can do the same to withdraw cash.

IMO the biggest detractors of this step were the people who had undeclared income. No prizes for guessing who they could be. And I can tell you this based on my interactions with my friends and colleagues, those of us who pay our taxes honestly had nothing to complain about. My family and I faced some hardship in the early days of demonetization but we put up with it and paid bills through other digital means as we always do.

PS - Our maid servants too supported this move. They are from a strata of society whose income and expenses are always in cash. But for 2 months they agreed to take their salaries via cheque AND stood in queues to withdraw cash. Brave ladies, not like the cry babies and drama queens I read about.

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Old 1st September 2017, 13:41   #2483
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Hence, in total , around 90% of population probably doesn't have any significant taxable income. So that leaves us with 12.5 Cr of targettable population. Do the numbers look better now ?
The average income of the richest 20% is just 95k a year, they are out of the tax system for the most part. The 56 lakh includes deposits which are one time and won't be in the tax bracket ever again, rural Indians (mostly women) keep money under the mattress, having it all in the bank is a surefire way to lose it all.

Those foaming at the mouth about black money and irritated by farm loan waivers, but completely at ease with corporate tax breaks totalling 10 times that have a look at this link, the numbers explain the situation.
https://www.bloombergquint.com/opini...-conundrum.amp

The only reason the demonetization didn't allow banks to evergreen loans, stuff the pockets of political cronies and cook their books was because the RBI mopped up the money and prevented another round of no-questions-asked / minister-called lending. The CEA is on record saying that the government must bail out large defaulters because that is how capitalism works, not really, but that is how PSBs operate.
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Old 1st September 2017, 13:55   #2484
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by .sushilkumar View Post
Yes, they did succeed to a small extend but was the whole pain worth for such small gains. Got below highlighting success of demonetization. While reading it, i have a laugh at myself.

[*]I am not digging into another big business house in Gujarat into ports et all who got a big mining contract in Australia post take over of current govt. Funny thing, the said project was mirrored in environmental concerns earlier and all suddenly went into air. [/list]
To Adani, all the Australian banks refused to loan (investment to close to 10 billion dollars) citing environmental concerns and Paris environmental accord.

Not just the funding, who will use all that coal, India ? And we have no issues with having more coal powered plants ?
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Old 1st September 2017, 14:16   #2485
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Still it is too early to gauge the impact. I am an ideological fan of "Marks and Spencer"(I think members of this forum are adept in understanding what I mean). Chinese capitalism and socialism is an excellent example for how to accelerate growth but at the cost of democracy(which is anyway a farce in India - we use it to abuse each other rather than to debate healthily).

My points on open table
1.I support Demonetisation - nothing works properly in this country except a shock treatment.
2.I appreciate PM for taking such a gamble. Could have done it better without loss of life.
3.I respect Dr.Manmohan Singh. He knows its a huge task to reform and his quote is "We have to first survive to reform", he was not allowed to go to second stage. He took a risk with 123 agreement and now ministers are grinning with relatively reasonable electricity situation in the southern states. I would have preferred him in Mr.Jaitley's place in a stable government.
4.8/11 has indeed slowed down the economy to an alarming extent.
5.More cash in circulation now than before 8/11.
6.Personally I know atleast twenty people who filed income tax returns for the first time.
7.There is an increase in overall tax complaince - obviously visible.
8.Real estate sharks are shaken.
9.Capitation based educational institutions are hit.
10.Many poor people and small business owners are badly hit - poor people did not have much to loose as they get freebies but middle class businesses are still struggling to recover - personally have known 4 shopwallahs shutting down after 8/11,due to sudden slow down affecting their monthly cash flow to sustain rent and other overheads.
11.Corporate funding to political parties has become more opaque.
12.Some cozy corporates close to the top are trying to shake the economy. Freebies always break an industry not only the competition.
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Old 1st September 2017, 14:50   #2486
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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To Adani, all the Australian banks refused to loan (investment to close to 10 billion dollars) citing environmental concerns and Paris environmental accord.

Not just the funding, who will use all that coal, India ? And we have no issues with having more coal powered plants ?
Correct. Finally SBI was lined up as well but they refused after public hue & cry. Most probably that coal will be bought to India at inflated price& fed to the govt run power plants creating more pollution for us mango man and profits for Said entity. Off course since it is imported coal, we will pay triple for each unit of generated electricity.

To be honest, I am all for demonetization and such drastic steps to bring more people into tax net but it is expected from the govt that they have done their home work. On top of it they behaved very irresponsibly with both major reforms. They said some thing at start and than turned their backs later on their own statements. Ever changing goal posts only added to the confusion and frustration. Add to it the fact that since last 3 years, The indirect tax go for us salaried class have increased multi fold. Where ever they saw inflation goes up, they removed the commodity from index itself to show that inflation is under control.

I am still keeping faith in current govt with 2 more years to go and most probably will vote again for them because i cannot see a viable option available in opposition ranks.

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That 56 lakh figure is false. AFAIK It's simply the number of assessees who paid tax online.
Well, they said primary goal is to bring out black money resulting in recovery of 29213 crores. This was recovered at what cost. So we spend some 100 Rs to recover 10 re from a defaulter wasting 90 rs.

http://www.hindustantimes.com/busine...TgqOQiaEI.html

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Old 1st September 2017, 15:10   #2487
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People always manage find loopholes in the system to get away with their wrongdoings. Demonetization wasn't a success as people having money managed to distribute it around themselves. And the chain continued until everyone showed them as marginally richer than the previous year, reported huge jump in their business turnover or some BPL families started having a few lakhs in their bank accounts (even if temporary).

And I can cite few real examples which I witnessed or heard:

- Jewellers in my city reported a huge jump in their business for a couple of months(almost everyone knows this).

- I saw illiterate and very poor guys holding cash in polythene bags and waiting in a bank to open accounts.

- A builder had a lot of cash with him. He made payments for all his outstanding dues of raw materials and labor costs. He even helped out some other officials deposit cash with him which he used to make advance payments for labor and raw materials.

- Transactions were grossly undervalued (to the tune of 70-80%) and rest amount was paid in cash. Upto 20-30% premium was also paid over and above this to compensate the person receiving cash.

- A transporter took cash from a few businessmen to prepay his loans, pay the drivers' salary in advance, purchased tyres for future use and made advance payments for fuel.

Mind you, petrol pumps were accepting those notes for a long time. So one can keep passing off a few lakhs every day if he has the right contacts at the pump.

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Old 1st September 2017, 16:19   #2488
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If you like to read economists, here is one expressing his views:

Raghuram Rajan Blasts Populist Nationalism, Says it's First Step to Crony Capitalism


Corruptions remains one department, where we are number one with 69% bribery rate:

Asia's Five Most Corrupt Countries: Forbes

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Old 1st September 2017, 17:10   #2489
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If you like to read economists, here is one expressing his views:

Raghuram Rajan Blasts Populist Nationalism, Says it's First Step to Crony Capitalism
Excellent article that accurately and in a very few words points out to what is the reason why the West will not support global trade as in the past, where it means moving manufacturing jobs out of the West to China. India was never in that system as a beneficiary and there is now zero possibility of made in India for the world.

Very recently I was investigating the internals of my home UPS/inverter when it broke down and I was shocked to find out that it is basically a make in China, assemble in India product and that is how most are these days. So what the West has done, we also seem to be doing by sourcing manufactured parts from China. From furniture to smart phones.

How then are we going to create all the jobs that we need to? Without having the benefits that the West first reaped, we seem to be joining them in their job creation problems.

Instead of addressing this burning issue of job creation, we are distracted by cow welfare and Godmen/gurus.

Last edited by Sawyer : 1st September 2017 at 17:12.
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Old 1st September 2017, 17:52   #2490
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Excellent article that accurately and in a very few words points out to what is the reason why the West will not support global trade as in the past, where it means moving manufacturing jobs out of the West to China. India was never in that system as a beneficiary and there is now zero possibility of made in India for the world.

Very recently I was investigating the internals of my home UPS/inverter when it broke down and I was shocked to find out that it is basically a make in China, assemble in India product and that is how most are these days.
Excellent thought shared by Mr. Rajan. We are seeing similar reactions by the public in other countries as well, case in point - India. When people lose faith in the System, they try to put their faith in something completely opposite of what was incumbent.

Businesses, on the other hand, are driven by profits. They try to reduce costs by all means possible within the limits of local law and sometimes, beyond it too. If the cost of manufacturing in a country X is cheap, a company wouldn't look at getting the work done outside.
China was and has been attractive because of cheap labor and manufacturing costs. China is also a major consumer of products. Companies, global and Indian alike, throng to avail these benefits. Countries had ignored this outflow/outsourcing of jobs as they reaped revenues from import duties and similar. Things are changing when there isn't enough job left for the people of countries.

Two things can happen. One, the respective countries incentivize local production (similar to Make In India campaign). Or they can force companies to manufacture within their country and sell (Ford Mexico vs. Trump admin). In the first case, jobs should grow, existing companies should be benefited as well as the economy should prosper.
In the second case, costs might go up forcing prices to go up as well. For some companies, this might become unviable and they might withdraw/stop their operations.

PS: My dad got me a Compaq PC back in 2003. Back then all its components were Made in China.
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