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Old 17th November 2016, 15:09   #871
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The scheme till now didn't have any meaning. Please try to understand. People in our country have become used to a certain way of doing things. And almost always it's the stick approach that works and not the carrot. Now people have finally realized that the present government is serious about this and they will hence willingly declare.

Otherwise what's the point of this. Do enlighten me. People get their black money changed at 40% and then hence will again start business as usual. The hoard to recover the lost money will take over and so on. Please don't be fooled with media reports of people burning cash and throwing it. Those would most likely be fake notes or staged news report. Any sane person knows of multiple ways of saving his money, available freely in the market. Why would they throw it away amounting it to zero than get it changed using one of the above mentioned methods and still be left with at least 60% of the amount. Think logically please.

And I get a sense of bitterness in the posts here. It's the same feeling I used to get when petrol users were celebrating deregulation of diesel. Answer me one thing. What's better for the country?

1. Person A has 1000 rs in black. He easily gets to convert it into new currency @40% and is hence now left with 600 rs black cash and person B who converted now has newly acquired 400 rs black cash. Not much changed for the country on a whole.

2. Govt reintroduces the amnesty scheme. Person A now will rather pay one time tax of 45% and declare and hence enjoy his money post that. So now person A has 550 rs in white and government gets rs 450 as tax. Plus person A would obviously not keep this white money at home and would use it freely to invest in market, banking, stocks or whatever suits him.

Keeping emotions side, which option is better for the country?

Last edited by drmohitg : 17th November 2016 at 15:14.
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Old 17th November 2016, 15:20   #872
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Originally Posted by drmohitg View Post

2. Govt reintroduces the amnesty scheme. Person A now will rather pay one time tax of 45% and declare and hence enjoy his money post that. So now person A has 550 rs in white and government gets rs 450 as tax. Plus person A would obviously not keep this white money at home and would use it freely to invest in market, banking, stocks or whatever suits him.

Keeping emotions side, which option is better for the country?
It's probably not easy to do otherwise they would have done it. I remember the SC pulling up the government last time the scheme was launched. Govt had to give an undertaking to the SC that they will not offer this kind amnesty again as this legalizes black money. Now I don't remember if it was NDA or MMS govt who gave that undertaking. Since there already was a tax amnesty very recently, another one now would not have been possible. Imagine the clutter from opposition, they would be shooting from the top of their heads that this is for rich people's benefit!!! It would be a political disaster.
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Old 17th November 2016, 15:32   #873
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by drmohitg View Post

1. Person A has 1000 rs in black. He easily gets to convert it into new currency @40% and is hence now left with 600 rs black cash and person B who converted now has newly acquired 400 rs black cash. Not much changed for the country on a whole.
Hmmm that looks like a logical thing except that when we consider larger amounts. A person converting 10 lac cash thru these dubious means will be very pissed off with 4 lack gone down the drain. This will prove to be a deterrent for him in future not to hoard black money, at least in cash.

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Originally Posted by drmohitg View Post
2. Govt reintroduces the amnesty scheme. Person A now will rather pay one time tax of 45% and declare and hence enjoy his money post that. So now person A has 550 rs in white and government gets rs 450 as tax.
I don't understand. Why would a habitual offender take the second/third/fourth amnesty scheme unless there is a compulsion?
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Old 17th November 2016, 16:14   #874
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by drmohitg View Post
.....
1. Person A has 1000 rs in black. He easily gets to convert it into new currency @40% and is hence now left with 600 rs black cash and person B who converted now has newly acquired 400 rs black cash. Not much changed for the country on a whole.
......
We are certainly assuming that easy ways are available to convert huge amount of money from old currency to the new currency.
I believe government has kept sufficient checks in the system to anticipate and address these black to black - old currency to new currency conversions. Any idea what will happen to the persons/vendors who has collected old currency black money in big amount - in cash?

Care to enlighten and provide details on your first option - I think it is totally invalid option - should not be in consideration at all.
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Old 17th November 2016, 16:37   #875
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Originally Posted by poloman
How can people buy such high amounts of gold and other assets in short period of time? Is there so much gold in black market? Any person with common sense won't sell a good quality asset for bundles of scrapped notes?
There could be lots of gold in the black market. The jewellers are the next set who needs to be chased down after the hoarders of black money are done with. There is lot of unaccounted gold out there, which these people manage to hide away. So lot of black money hoarders may also have exchanged it with unaccounted gold. The plan may be to cook the account books and deposit this money in the account. I mean some how prove that any 500 or 1000 note came in before Nov 7th, and the rest of the sales all happened with currency from other denominations or by cheque etc. Or back date the invoices etc.

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Originally Posted by diyguy
I know that a neighbor has spent close to 10L on white goods from one store for purchase of UHD tvs, 700+L fridge, Home theater, inverter ac
These purchases have boosted the economy, and a good amount is going to the state exchequer . See the number of goods which got sold. And none of the products can be resoled at the same (or higher) price at a later point of time. The shop keeper will have to cook his books to make these transactions valid.

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Another is lending money to folks at a discount payback.
What if the person who took the loan comes back with these Rs.500 & Rs.1000 notes? Or are you mentioning about lending money to poor people, asking them to "exchange" it with good currency and bring it back? And get a commission for that?
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Old 17th November 2016, 16:38   #876
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by drmohitg View Post
And I get a sense of bitterness in the posts here. It's the same feeling I used to get when petrol users were celebrating deregulation of diesel. Answer me one thing. What's better for the country?
If there was an amnesty scheme, then the middle man will offer lower rates for conversion, they will be competitive.

People are using common sense, I see no bitterness buddy. In fact we need more deterrents for scams, tax evading etc.

Last edited by ecenandu : 17th November 2016 at 16:47.
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Old 17th November 2016, 16:55   #877
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by drmohitg View Post
Think logically please.

And I get a sense of bitterness in the posts here. It's the same feeling I used to get when petrol users were celebrating deregulation of diesel. Answer me one thing. What's better for the country?

1. Person A has 1000 rs in black. He easily gets to convert it into new currency @40% and is hence now left with 600 rs black cash and person B who converted now has newly acquired 400 rs black cash. Not much changed for the country on a whole.
...
Person B has 1000Rs of invalid currency. He has possibly "helped" 10 such poor souls. So he is sitting on 10,000Rs in old notes.

What does he do with all this cash in old (now invalid) notes? Find a bigger money laundering Person C, who would charge 40% and give him 6000 in new currency?
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Old 17th November 2016, 17:02   #878
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Quote:
Originally Posted by heavenlybull View Post
Hmmm that looks like a logical thing except that when we consider larger amounts. A person converting 10 lac cash thru these dubious means will be very pissed off with 4 lack gone down the drain. This will prove to be a deterrent for him in future not to hoard black money, at least in cash.
True he will be very pissed. But it will act as a deterrent? Really? Why will that be. The way business is run in our country is via hard cash used as black money. Why will this person who has only 60% of his cash left not again try to earn and cover the losses? One thing will change that he won't keep it as hard cash in his house since he will be apprehensive that something like this might be repeated.

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I don't understand. Why would a habitual offender take the second/third/fourth amnesty scheme unless there is a compulsion?
Exactly my point. There is the compulsion NOW since this government has showed that it is willing to walk the talk. Till now it was always about how we will do this and that. But this time they have done something and hence the compulsion. If I have to lose 40% of my treasure, I would rather lose 45% and then happily use the remaining.


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Originally Posted by JLS View Post
We are certainly assuming that easy ways are available to convert huge amount of money from old currency to the new currency.
I believe government has kept sufficient checks in the system to anticipate and address these black to black - old currency to new currency conversions.

Care to enlighten and provide details on your first option - I think it is totally invalid option - should not be in consideration at all.


I am really sorry but I am not going to answer that. Its openly available out in the market and is easier than you think. Please trust me on this. And it isn't just something privy to a few people. You will need to believe my word on this. I cannot comment any more on this.

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Originally Posted by SDP View Post
Person B has 1000Rs of invalid currency. He has possibly "helped" 10 such poor souls. So he is sitting on 10,000Rs in old notes.

What does he do with all this cash in old (now invalid) notes? Find a bigger money laundering Person C, who would charge 40% and give him 6000 in new currency?
Well that is something I am also unable to figure out that how is person B managing to convert the money. Some say its by using farmers, villagers, bank accounts of multiple people and so on. I am not sure and no one will talk of course and tell what they do. But the deal is happening openly at rates varying from as low as 15% to as high as 45%. Most of the times, there is a whole chain already formed where each person is adding a fixed % as his commission and passing on the money. But yes I am clueless as to what the last person is doing with this cash.

Again there are a few other ways too that I know of where you can convert black money into white, mostly using bills and challans from false companies and all. There are people who earn their livelihood doing this.

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Originally Posted by ecenandu View Post
If there was an amnesty scheme, then the middle man will offer lower rates for conversion, they will be competitive.
So very true. I didn't think of that. But still the government will benefit more than they are now as at least a few more people will opt for the scheme. That is of course my opinion.

Last edited by drmohitg : 17th November 2016 at 17:09. Reason: As requested
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Old 17th November 2016, 17:23   #879
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Originally Posted by drmohitg View Post

I am really sorry but I am not going to answer that.
I hope right now they are only promising to pay the new currency on a future date or are they giving the new currency now?



Interesting.
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Old 17th November 2016, 17:25   #880
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The current step was taken with a good motive but with the current limitations it is not achieving what it was intended for. The black money is just changing hands and the aim towards cashless economy is not being achieved. We will be heading for the same amount of cash in the economy few months into the 2017.

The best instructions the government could have sent was:
Go to the income tax website enter the tax evaded amount and your pan card number, Bank account no and name , The website will print two challans 45 % Favoring the Government Treasury account and 55 % favoring your bank account. Take these challans to the bank and deposit your tax evaded cash in hand to both govt treasury and your own savings account. Keep the stamped challans in your book of accounts. No Questions asked Government gets its tax and the owner saves his 55 %. Currently this 45 % will still stay as black in the economy and the aim of the move will not suffice.
Make swipe machines mandatory for all businesses, And all transactions above Rs 3000 have to be done only using Debit Cards, Credit Cards, Cheques and NEFT. Waive the charges on Card Transactions.
Give GST incentive discount of 2% on all transactions using plastic money, E transfers and cheques.
Have fast track teams to listen to cheque bounce problems with government fulfilling the trader with the bounced amount and recovering 200 % from the party giving a bounced cheque with atleast 5 years in prison.

Last edited by SDP : 17th November 2016 at 17:58. Reason: typos
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Old 17th November 2016, 17:26   #881
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Originally Posted by ecenandu View Post
I hope right now they are only promising to pay the new currency on a future date or are they giving the new currency now?
Higher rate for hand to hand ( 40-45%) and lower rate if you are willing to take delivery after a fortnight. More the waiting period, lesser the rate of commission.
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Old 17th November 2016, 18:39   #882
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The only reason I can deduce is the non-seriousness with which we treat the Govt and it's decisions.

With this one step now everyone would take the PM seriously at least.

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Originally Posted by arun_kun View Post
Any particular reason you are aware of on why they did not use the Amnesty Scheme which was available till Sept 30th? Just wanted to understand.
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Old 17th November 2016, 19:05   #883
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Great move to cap the exchange to 2000 from tomorrow, that should have been from the start in order to stop daily wage laborers being used to convert black to white, however small. That and the decision to put in indelible ink would step the rot a bit.

I again reiterate honest people have nothing to be wary of - troubled a bit, yes, but not scared. The Govt is looking to ease out pain in a very sensitive manner and for once I appreciate them.

As someone had said, people were just used to amnesty schemes and a certain way of life, these have been shattered. Again the media is a monster and has been fueling most of the fire. The opposition is downright comical now. The unanimity is just something to behold! I wish they had supported the scheme rather than just talk trash. But we all know why most would not. Some of the allies too are against the govt, it's comical to hear the reasons.

No one said, this would be easy, but a certain section trying to convert as much money to white (while exchanging) has made it cumbersome for everyone. A couple of my banker friends noticed this on the first two days itself, when the same people kept coming to exchange.
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Old 17th November 2016, 19:10   #884
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https://sputniknews.com/business/20110202162419049/
Quote:
The final Soviet monetary reform began on January 22, 1991.The confiscatory monetary reform was arranged to withdraw excessive money from circulation and to solve, at least in part, the problem of commodity shortages. The official reason was the removal of counterfeit rubles allegedly being brought into the Soviet Union from abroad.
On January 22, 1991, Gorbachev signed a decree eliminating all 50-rouble and 100-rouble banknotes issued since 1961 and restricting bank withdrawals from private accounts. The Vremya (Time) television news program, which was broadcast daily at 9.00 p.m., reported on the signing of the document at a time when virtually all financial institutions and stores were closed.
What happened next will SHOCK YOU

"Those who do not learn history are doomed to repeat it."
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Old 17th November 2016, 19:31   #885
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Originally Posted by greenhorn View Post
https://sputniknews.com/business/20110202162419049/

What happened next will SHOCK YOU

"Those who do not learn history are doomed to repeat it."
The only problem here is USSR and its economy were already at the verge of collapse and this step might have accelerated it. We cannot compare apples to oranges.
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