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Old 14th September 2018, 00:09   #2731
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by earthian View Post
DeMo was an ambitious move. It failed because of us - ordinary citizens- who did not support the endeavour whole heartedly. When we saw our cash rich neighbour employing such means to convert his black money, did we blow the whistle? No. We preferred not to get involved.

I do not disagree with anything in particular what you have stated. However innocence is not a word I would equate with governance. The party elect is not a new member of this society. They have been in grassroot level politics since very long. Even the PM was a 3 time CM before he took office. And if you are telling me they failed due to the lack of the support if the people, I'll pass. If there's anyone who knows how this country works, more than you and me, it's them. That's why they rule and we're ruled.


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Originally Posted by Santoshbhat View Post

When DeMo was announced, it broke the back of this parallel economy.
It did. For a month. Then their logistics got easy as the new 2k note was smaller and twice the denomination. Hoarding cash became much easier than before. It had been argued before too that people didnt keep all unaccounted money in cash. Nothing changed there.

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Originally Posted by V.Narayan View Post

Mates, I have expressed my view earlier that DeMo is a failure. But I will not hurl thunderbolts and invective statements at our Prime Minister or judge him on one programme alone. If you hate him so please cast your vote appropriately in 2019. In my opinion this Govt is way way way better than UPA-II or Rajiv Gandhi (1984 to 1989) or the mish mash we had between 1996-98 and 1977-80. I certainly do not wish to see Rahul Gandhi or Mayawati or Mamtaji as the PM. Nitin Gadkari might actually make a great PM in my view but it is just the view of one voter. However my assessment is NaMo will be his party's choice and he will be the next PM either by his own majority or with help of his allies.

If you want a debate on NaMo and NDA-II then let's list out achievements and shortfalls and have a civilized debate. I am sure all members will earn from each other's views. By standards of today I am relatively new to social media and have as yet failed to appreciate that a balanced polite Oxford debate is out of fashion on social media. Wonder if the age of nuanced statements has passed.
Dear sir. The problem with this govt and leader is their own creation. Frankly speaking in my memory, this govt was welcomed with open arms by the people with full majority. I and many other anti demo people were as tired of the previous govt as can be. With scams, rising prices et al.

The PM to be, had promised a lot. 5 years into this govts rule I've already had enough.

I agree with all the points you said. There is no opposition and no other clear candidate. In such case we the citizens have to act as the opposition and make the "pradhan sevak" behave like one. You wish to give him another term? I dont mind. But my problem is with the supporters who blindly hero worship and are ignorant to reality. Why can't we question the govt? Demo killed people, I know life has little value in this overpopulated country of ours. But this is downright criminal and questions should be asked. This govt has been all show and no go. Failure of demo was inevitable, it is just some modesty that I expect. Using social media to spread lies, branding dissent , overdramatizing unnecessary issues, oversimplification of the past govts performance, taking refuge in lies and playing blame games is all what they have time for.

I was active in this thread 2 years ago when there were people for and against the move. Today the proponents have accepted demos failure however they still are impressed with the govts show of "intent". Some brushed us aside with their superior understanding of economics. Sadly it was never about economics but pure politics at its best.

To conclude, I would say that the PM is the most wonderful artist and Demonetization is the ultimate rorschach blot of the century. Some see doom some see courage. The naysayers are furious than ever and the loyalists dazzled by the bravado. All in all status quo is still maintained. People die. Nothing new. Simply superb.


PS.

But I should thank all you people on TBHP in keeping this discussion sane. I don't agree with you nor do I want you to follow everything i say. We can put our thoughts on the table and gauge all these perspectives and come out as better citizens. I can't dream of having this discussion on any other social media platform for the fear of being branded with all the trending words.
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Old 14th September 2018, 04:27   #2732
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Chetan_Rao View Post
Nobody asked for demonetisation, so it follows that the burden of proving it worked and/or met its stated objectives falls to the implementers, who so far have failed to supply any conclusive evidence to support their assertions. Hard, verifiable data, not move-goalposts-faster-than-you-can-change-underwear rhetoric.
Well said, however how many fail to comprehend this simple logic is what never ceases to amaze me.

Last edited by benbsb29 : 14th September 2018 at 04:28. Reason: Typos.
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Old 14th September 2018, 04:43   #2733
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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@longhorn; If you are correct then how have tax receipts gone up, by all accounts black money transactions are down, etc.
How much tax receipts gone up?
Put some historical data of say 10-12 years for fair comparison.
And how do you know the black money transactions are down?
Any relevant and reliable data to support this claim?

Last edited by benbsb29 : 14th September 2018 at 06:27. Reason: Corrected typo -> Fare to fair.
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Old 14th September 2018, 09:41   #2734
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by 400notout View Post
It did. For a month. Then their logistics got easy as the new 2k note was smaller and twice the denomination. Hoarding cash became much easier than before. It had been argued before too that people didnt keep all unaccounted money in cash. Nothing changed there.
Would like to understand your basis for the statements highlighted in bold. Yes almost all the cash is back in circulation. But the question is, is the generation of black money continuing at the same rate as before?

Almost everybody that I interact with echoes the same feeling that without bill and unaccounted cash transactions are on the decline. You see over the years people assumed that by not paying taxes and accumulating wealth, they would get away. Sell in cash, then convert that cash into gold or real estate and build up net worth and sit pretty. When you deal in cash predominantly, it is not easy to convert it into land or gold on the go like depositing your cheques into the bank or making a recurring deposit with the bank or doing a mutual fund SIP. You are always caught with a large chunk of cash which you can't invest in banking deposits, bonds, shares or mutual funds.

DeMO caught them unawares, disrupted their businesses, handed the advantage to others. They are now in a position to make a comeback. But they have to start building up their business from a few rungs below which they built up brick by brick by putting their blood and sweat into the business. People are under the impression that black money just falls into their laps. Black money is also hard earned money, just that tax is not paid on it. They don't want to be caught in a similar situation again. With GST now in place, there is more reason for them to come clean in business. GST may be complex, but has a lot of transparency built into it. Everything is portal based and all your purchase and sale transactions are there in the cloud for any authority to verify at any time. You are leaving your footprints wherever you go. Because of this transparency even corruption at the tax assessment level will reduce. CA's are now advising their clients to keep their accounts clean as GST is PAN based. Hanky panky business will not last long in today's world.

Also there are numerous restriction on cash transaction. High value cash transactions have to be reported. Just like banks, every entity has to report cash transaction in excess of a certain threshold. PAN no. is compulsory for cash transactions above 50K. Cash components in real estate transactions is on the decline due to raising of guidance values. All in all avenues for cash is shrinking away. Unaccounted cash is of no use unless you are a politician. The results that people expect in one or two years will take time. Was DeMO the jolt the system required? I don't know, maybe the same results can be achieved in better ways, I am no expert. But from where I sit, I see the change.

Last edited by Santoshbhat : 14th September 2018 at 09:50.
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Old 14th September 2018, 10:51   #2735
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Santoshbhat View Post

Would like to understand your basis for the statements highlighted in bold. Yes almost all the cash is back in circulation. But the question is, is the generation of black money continuing at the same rate as before?
There have been news reports about cash being back as before so I don't want to emphasize on the same. Buy let me share my concepts on "black money"

A) Tax evaded money. ie you deal in cash to avoid paying or pay less tax.

B) Money through crime like bribe money, laundered money, drug money and revenue through crime.

'B' will never change. It is mostly 'A' which civil society needs to target. Now contrary to popular opinion, very few indulge or dare to pay 0 tax. Some get away with it too. But most, especially business people indulge in under reporting and save in tax by dealing in cash. And these people form a bulk of our population. I'm talking right from the small retail shops to medium scale businesses. Bigger businesses can always cook their books. So the question is have these people changed?


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Originally Posted by Santoshbhat View Post

Almost everybody that I interact with echoes the same feeling that without bill and unaccounted cash transactions are on the decline.
I'll ask you to carry out a simple exercise. Go to any business and offer to make a deal of any amount and specify you will be paying in cash. Be it 1 lakh or 1 cr. You will be surprised that despite all mechanisms in place how people still manage to play.

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Originally Posted by Santoshbhat View Post

DeMO caught them unawares, disrupted their businesses, handed the advantage to others.
At the risk of sounding anecdotal, I must say I know of many businesses which operated on full cash which stopped manufacturing for a month, but got into usual business within a couple of months.

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Originally Posted by Santoshbhat View Post

Also there are numerous restriction on cash transaction. High value cash transactions have to be reported. Just like banks, every entity has to report cash transaction in excess of a certain threshold. PAN no. is compulsory for cash transactions above 50K. Cash components in real estate transactions is on the decline due to raising of guidance values. All in all avenues for cash is shrinking away. Unaccounted cash is of no use unless you are a politician. The results that people expect in one or two years will take time. Was DeMO the jolt the system required? I don't know, maybe the same results can be achieved in better ways, I am no expert. But from where I sit, I see the change.
Wasnt this the same case before? PAN for more than 50k is an age old rule, nothing specific or related to Demo. Hoarding cash was as risky earlier as it is now. If DeMo would have been carried out with proper procedure with standard targets and available results, the Govt. could repeat this procedure continuously maybe then people would stop dealing in high value cash. But Since the govt can't risk another DeMo, cash is safe as of now.

Like I said earlier, and Bhpian Chetan also mentioned, it's pointless arguing DeMo as there is no data to point out it's aim and accomplishments.

You are free to believe what you want, there are business communities in our country who are traditionally into business, just spend some time with them closely and you will be surprised.

People are talking about good intentions and bravado, I for one don't associate these terms with politics. DeMo was done with whatever objective, but the master surely knew he would get away with it. It's a political master stroke nevertheless.
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Old 14th September 2018, 10:52   #2736
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The GST bill was in fact introduced by the UPA government. No prizes for guessing who stalled its implementation. The fact that it was implemented by the same person who opposed it not more than 4 years ago, goes on to prove that the current dispensation was more interested in playing petty politics than the benefit of the nation. Taking credit for someone else's sweat and blood by renaming the original schemes- that unfortunately, is the hallmark of the current government.

The bill that was finally passed in parliament is highly watered down from its original form, with multiple tax slabs and innumerable cesses on products over and above the tax slabs. Not content with that, they went ahead and kept the money spinners - fuel, alcohol and tobacco out of the purview of GST. GST in its current form is a shadow of its original self and has not been implemented in the way it was originally supposed to be.

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Old 14th September 2018, 11:20   #2737
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I shudder to think what will become of India if the current dispensation continues for another 5 years. Besides their fascist agenda, every other remaining small & MSME industry will be totally demolished because of the corporatisation of banks and RBI like nobody's business. They seem to have almost run out of their diversionary tactic bag, all out war against the neighbour not yet used & increasingly difficult with comrades as their all weather friends post 2010, as it's evident when the defence minister talks about the falling rupee, law minister talks about gst and the finance minister talks about anything but finance. The man who's supposed to talk got his tongue by the cat post 2014. And yes this post is valid and adds meaning to the thread because it talks about the man who pulled off this stunt and his daily failures and because of whom this thread is on T-bhp.

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Old 14th September 2018, 11:33   #2738
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Originally Posted by Santoshbhat View Post
I would like to post some insights from my perspective as an SME engaged in manufacture of industrial consumables.
Such an awesome post, thank you for sharing a real life perspective that keyboard warriors like me don't usually get to hear. It's somewhat comforting to hear that DeMo did have some positive effects at least for a while. But sad to hear that things went back to normal so soon. Again, it's good to hear that GST is making a difference, hope it does become stronger and does more good. But still does not take away the fact that DeMo itself seems to have been a big dud, whatever may be the reasons.
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Old 14th September 2018, 12:02   #2739
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Santoshbhat View Post

...

When a trader offers the consumer the option of buying without bill, there is a tangible saving for the consumer. Products which ended up at the B to C trade would see the maximum without bill, cash sale. A transaction on which no indirect tax and no direct tax is paid to the Govt. The entire value of such sale becomes black money in the hands of the receiver. I don't intend to blame the trader or the consumer alone for this. There is a chain that traces back to the manufacturers.

...

Most of these contractors are unorganised and do not mantain accounts. They buy in cash, get paid in cheque by their companies and slip under the radar of tax men since they have no PAN or TIN or anything to grab them by. Companies are aware of this , but they are happy to unload some tough jobs to these contractors as otherwise they would need to hire labour inside their factories and adhere to a host of labour laws and minimum wage laws. These contractors would always ask for material 'without bill'. Large and medium sized companies would find it difficult to tap this market since, the smaller ones would be happy to sell to these guys without bill. By buying without bill, the saving was close to 18% (12.50% excise duty + 5.50% VAT). Many small factories thrived on this tax arbitrage.

...

After DeMo came GST. GST has been the game changer according to me. More than DeMo , it is GST that has forced the parallel economy to come into the mainstream. Once GST was introduced, almost all business entities started insisting on a GST bill.
Brilliant post - thanks for sharing the view. As a consultant in discussions with several NBFCs, the impact of Demo and GST on the SME sector and their businesses is what I got from the ground.

But regarding the cash based transactions / businesses that occurred during the VAT era; what stops these players to revert to a "without bill" scenario again under GST? Say the B to C scenario or the labor/contractor case; is it a fear factor (of the situation of something unexpected happening again)?

I don't see a case of that happening; unless I'm missing something here.

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Old 14th September 2018, 12:20   #2740
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Originally Posted by 400notout View Post
I'll ask you to carry out a simple exercise. Go to any business and offer to make a deal of any amount and specify you will be paying in cash. Be it 1 lakh or 1 cr. You will be surprised that despite all mechanisms in place how people still manage to play.
In our business it is not possible to purchase materials on cash as none of our suppliers agree to supply in cash. This was the case before DeMo too. We used to hear stories of how some competitors found sources who were willing to supply in cash, but I have heard that nowadays this chain is unable to ship goods without bill due to strict implementation of E-Way bill system. Transporters refuse to load goods which are not supported with a valid e-way bill since penalties are now levied on the transporter as well. Some people may be finding ways to beat the system, but the noose is tightening for sure.

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Originally Posted by 400notout View Post
At the risk of sounding anecdotal, I must say I know of many businesses which operated on full cash which stopped manufacturing for a month, but got into usual business within a couple of months.
We are in business for the past three decades and my experience is a bit different from yours. Maybe our industry wasn't cash based to start with.


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Originally Posted by 400notout View Post
Wasnt this the same case before? PAN for more than 50k is an age old rule, nothing specific or related to Demo. Hoarding cash was as risky earlier as it is now. If DeMo would have been carried out with proper procedure with standard targets and available results, the Govt. could repeat this procedure continuously maybe then people would stop dealing in high value cash. But Since the govt can't risk another DeMo, cash is safe as of now.
My take on this is, that the Govt. sure could have done a better job with implementation. For DeMo to have been truly effective it had to be even more draconian. After announcing DeMo I feel the govt. chickened out to some extent as they feared widespread backlash for the hardships and tax terrorism. The biggest mistake the PM made, was announcing that deposits upto 2.50 lakhs would be free from scrutiny. By making this announcement, the govt. gave its hand away. People got emboldened and all the available 2.50 lakhs scrutiny free slots got filled up with the surplus cash.

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Originally Posted by 400notout View Post
You are free to believe what you want, there are business communities in our country who are traditionally into business, just spend some time with them closely and you will be surprised.

People are talking about good intentions and bravado, I for one don't associate these terms with politics. DeMo was done with whatever objective, but the master surely knew he would get away with it. It's a political master stroke nevertheless.
As I said, we are into business since long and interact with a lot of business people. I have posted my insights above.

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Originally Posted by ninjatalli View Post
But regarding the cash based transactions / businesses that occurred during the VAT era; what stops these players to revert to a "without bill" scenario again under GST? Say the B to C scenario or the labor/contractor case; is it a fear factor (of the situation of something unexpected happening again)?

I don't see a case of that happening; unless I'm missing something here.
In the contractor case, his end customer is a GST registered entity. When the GST entity receives a service from non registered entity they had to pay GST under reverse charge, atleast until reverse charge mechanism was suspended. Companies started insisting on GST bills from all these vendors forcing them to register under GST. Once they got registered, they wanted to purchase under GST since they could now avail input credit on purchases which wasn't available to them under the erstwhile VAT regime.

B to C is different. The trader can benefit by selling without bill only if is able to purchase without bill, otherwise the GST on his purchase cannot be set off. Also traders have to justify inventory. What is purchased has to be shown in the books as sold or as inventory. Without bill purchase of FMCG products is difficult I believe, though that is not my area, others can enlighten. I believe unbranded goods are more amenable for cash trade. Certain building materials like tiles, taps, electrical items are favourites for without bill sale and purchase and here the chains are established from manufacturer to wholesalers to retailers.

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Old 14th September 2018, 12:59   #2741
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In our business it is not possible to purchase materials on cash as none of our suppliers agree to supply in cash. I have posted my insights above.
I do not disagree with a word you said. Many businesses aren't cash operated for various reasons. Most important being, the higher you go the more organised you have to get. For eg. if I have to get a tender of a crore or upwards, I have to show experience, organisation and infrastructure depending on the nature of the business. Also for international projects/ partnerships you need to have your bills, tax records, and employee data healthy, to even be considered for one.

Also after a point in time tax is saved through other resources like cooking books, showing depreciation, fake expenditures etc. Doing everything in cash is cumbersome after all.

However, at many places private or govt. A bribe has to be handed to facilitate the project. This is usually in cash or kind.

One flipside of dealing in cash for businesses is they can't show their wealth. So don't go by appearances. I've seen owners of manufacturing units tripling on an activa to work as they can't buy a new car in the fear of getting scrutinized. Also there are some businesses, which don't indulge in any profitable business. They just exist to show that some work is done while their main business is money lending informally at high interest rates. And yes people go for it too.

Most of these businesses will get out of the cash cycle at some point in time mostly for convenience sake than fear of working in cash.

I would still not give much credit to DeMo. The taxman was feared earlier as much too.
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Old 14th September 2018, 15:34   #2742
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Basically it seems that many people will be happy to get a subsidy even though it drives up inflation down the line.

In the long term this will pay.
Sir, as a boss told me in my first job - the difference between a purpose and a wish is that the wish doesnt have any completion date. I havent read any pro-subsidy comments here or on the fuel price hike thread. I also agree that meaningless subsidiies or tax breaks are a big No No.

But it is odd that we who want government to control price set by private players e.g. medicines, hospital charges, school fees, have no issue with super-high taxes on wealthy, petrol, cars, alcohol, cigarettes, good hotels etc. In fact we cheer 'others' being taxed or their wealth confiscated without a conviction in a court, even while knowing a large part of the money collected is criminally wasted or siphoned off by corrupt politicians and "public servants".

A politician claims De-Mo will end black money+++, and off the eduated folks go - now 183 pages, making assertions for and against, accusing each other. Anyone thought through the mechanism by which replacing INR notes from 1000 to 2000, or changing color of notes, will have a long term impact on corruption, terror, inflation, bank loans, black money etc etc.?? There is no way, except for the short period, which is exactly what we saw.

Subsidy theft, Loan non repayment, super high public infrastructure contracts, defence deals, illegal trade under police or politicians protection are the major originators of black money, not the small shopkeeper who sells cheap and doesnt pay taxes. If we really want to end black money and corruption, we had better focus on making government become law abiding public servants, not law disrespecting rulers making us chase bogeys, while Laloos roam free and footloose.

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Old 14th September 2018, 17:19   #2743
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Old 15th September 2018, 00:28   #2744
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Originally Posted by Santoshbhat View Post
Would like to understand your basis for the statements highlighted in bold. Yes almost all the cash is back in circulation. But the question is, is the generation of black money continuing at the same rate as before?

Almost everybody that I interact with echoes the same feeling that without bill and unaccounted cash transactions are on the decline. You see over the years people assumed that by not paying taxes and accumulating wealth, they would get away. Sell in cash, then convert that cash into gold or real estate and build up net worth and sit pretty. When you deal in cash predominantly, it is not easy to convert it into land or gold on the go like depositing your cheques into the bank or making a recurring deposit with the bank or doing a mutual fund SIP. You are always caught with a large chunk of cash which you can't invest in banking deposits, bonds, shares or mutual funds.

DeMO caught them unawares, disrupted their businesses, handed the advantage to others. They are now in a position to make a comeback. But they have to start building up their business from a few rungs below which they built up brick by brick by putting their blood and sweat into the business. People are under the impression that black money just falls into their laps. Black money is also hard earned money, just that tax is not paid on it. They don't want to be caught in a similar situation again. With GST now in place, there is more reason for them to come clean in business. GST may be complex, but has a lot of transparency built into it. Everything is portal based and all your purchase and sale transactions are there in the cloud for any authority to verify at any time. You are leaving your footprints wherever you go. Because of this transparency even corruption at the tax assessment level will reduce. CA's are now advising their clients to keep their accounts clean as GST is PAN based. Hanky panky business will not last long in today's world.

Also there are numerous restriction on cash transaction. High value cash transactions have to be reported. Just like banks, every entity has to report cash transaction in excess of a certain threshold. PAN no. is compulsory for cash transactions above 50K. Cash components in real estate transactions is on the decline due to raising of guidance values. All in all avenues for cash is shrinking away. Unaccounted cash is of no use unless you are a politician. The results that people expect in one or two years will take time. Was DeMO the jolt the system required? I don't know, maybe the same results can be achieved in better ways, I am no expert. But from where I sit, I see the change.
There is a saying "Let 100 culprits go scot free if it means an innocent does not have to be punished", What our dear leader did is something which hurt the poor and middle class the most.

How did it hurt the poor? India's unorganized sector accounts of 75 to 80% of the work force which work in the small and medium scale industries, demonetization hit their stomachs, it hit their livelihood and it made them helpless because their industries shut down and the laborer was left without a job. No he can't make a comeback like how industrialists and people in the industry can, he needs to eat, make his child go to school, pay his electric bill etc and he needs to take care of all this week after week. Look at the textile industry for example (I know because my dad is into this business), its finished, mills in south are 60-70% shut, demonetization killed this industry and then GST put an axe through its dead body and dismembered it, foolish people who don't know T of textile made policies on how various jobs that are carried out before cloth is made are supposed to be taxed.

Someone who has 100 crores stashed away has 20 crores in his bank account too, he will try to convert what he can and rest just burn it away, people who get caught in the net are people like my mother who over 10s of years has saved cash from my dad's wallet, her shaak bhaaki money, various festival money, etc etc adding all of it say for my marriage in cash at home, those 15-20 lakhs that she has saved, what will happen if she deposits it in the bank? She'll get an IT notice and government will confiscate this money.

There are lakhs of people who have such kind of money, they are just normal people who have saved money over the years in cash, these are the people who suffer because the value of money is immense and we just can't throw it away, demonetization hit these people. No big industrialist was caught, money is back in the system and nothing has changed,

What our dear leader could have done is given people 1 years time to declare money whatever they had, pay 30% tax on it and convert it to white, no questions asked, after 1 year, those notes will be demonitised and will be worthless paper, this way everyone would have come forward and done the needful, the system would have been full of white money, people would have kept their money after paying the taxes and everyone would be happy, but NO, he had to do the most foolish thing this country has ever seen in the name of a 'change'.

I don't want India to become Shanghai in 10 years, I want to live my life peacefully, with prices in check, development at its normal pace and a guy ruling over it who does not wake up one day and say "Aaj kuuch toofani karte hai', I have had enough of this nonsense in 4.5 years, I am so tired of reading the news paper everyday that listening to the word change and development on paper only enrages me to no end, the lies being peddled is so much and so loud, it breaks my ear drums, I want my old life back and I want my old India back!

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Old 15th September 2018, 12:20   #2745
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Quote:
Originally Posted by earthian View Post
"Whether DeMo was purely for political gains (UP elections) ; or was it for other reasons, with political benefits being the side benefit."
As V.Narayan said, DeMo was a failure. So bash the PM and the Government.
While Bash is a very strong word, I would say blame. The whole exercise of demonetization (DeMo) was done with one aim. What was it ? And was it achieved ? If not, was proper study undertaken before executing the same ? When an individual has a huge responsibility of taking the nation forward as large, diverse and populated, unorganized as India, such decisions like DeMo would need a lot of time to calculate and extrapolate probable outcomes. This was entirely missing given what is the result.

Quote:
Originally Posted by sgiitk View Post
Basically it seems that many people will be happy to get a subsidy even though it drives up inflation down the line.
A very valid point and true to the core. However, biggest subsidy was on fuel which is now removed and infact its taxed heavily. Isn't that contributing to inflation ?

Quote:
Originally Posted by Santoshbhat View Post
I have been a silent reader on this thread. I would like to post some insights from my perspective as an SME engaged in manufacture of industrial consumables.
Brilliant. But I feel that many are back to what their methods were earlier. They identified a vulnerable loop hole and would be ready to use it next time.

Quote:
Originally Posted by Santoshbhat View Post
Yes almost all the cash is back in circulation. But the question is, is the generation of black money continuing at the same rate as before?
DeMO caught them unawares, disrupted their businesses, handed the advantage to others.
Given that more than 99% currency notes came back, it seems that estimates of black money wrong in the first place. In that case, making another estimate about black money would be inaccurate. Also, we really dont have precise data on how many with black money were identified and caught, brought to justice.

India isnt as organized as we all are aware of. The parallel economy does give employment to many (there would be exploitation, am not refuting that). When that unorganized sector was hurt via DeMo, the employment got hurt too. Why wasn't the those employed in unorganized secured in one way or the other before DeMo ? Its a huge task, but therein lies real challenge.

Quote:
Originally Posted by humyum View Post
Look at the textile industry for example (I know because my dad is into this business), its finished, mills in south are 60-70% shut, demonetization killed this industry and then GST put an axe through its dead body and dismembered it, foolish people who don't know T of textile made policies on how various jobs that are carried out before cloth is made are supposed to be taxed.

Someone who ... this money.

There ... people. No big industrialist was caught, money is back in the system and nothing has changed,

What our dear leader could have done is given people 1 years time to declare money whatever they had, pay 30% tax on it and convert it to white, no questions asked, after 1 year, those notes will be demonitised and will be worthless paper, this way everyone would have come forward and done the needful,...

I don't want India to become Shanghai in 10 years, I want to live my life peacefully, with prices in check, development at its normal pace and a guy ruling over it who does not wake up one day and say "Aaj kuuch toofani karte hai', I have had enough of this nonsense in 4.5 years, I am so tired of reading the news paper everyday that listening to the word change and development on paper only enrages me to no end, the lies being peddled is so much and so loud, it breaks my ear drums, I want my old life back and I want my old India back!
Forget textile industry,other industries got hurt too. My uncle is a farmer and so are many who live in that village. After DeMo they were standing in queue, almost one member from all families residing in the village, and at the end of the day they were all disappointed. Cash took a long time to reach them. There were several losses they can list down, but then nobody discusses these hardships dished out to them.

Am waiting for news about how many black money hoarders were brought to justice, swiftly at that. There was some scheme before DeMo was declared that people can come forward, pay tax on their money with a promise that no legal action would be taken against them. Few did use this opportunity, but not all.

Even I want my old India back ! Where vision wasn't as hazy as its right now. But past never comes in future, all we can do is take a more informed decision to the best of our understanding when it comes to visiting poll booth next time.

Lets revisit the DeMo Exercise:
Agenda of the exercise : Started with Black Money, quickly got converted into "Digital Economy".

Result : 99% notes came back, no black money hoarders were caught, I guess they were supposed to be in huge numbers given the gravity of this exercise. Employment in unorganized sector took a hit, GDP took a hit.

Digital Economy is another joke IMO. Recently I got my credit card statement where 1% surcharge on fuel was charged and then waived off, but 18% GST on that fuel surcharge is to be paid by me. Really ? Rather than giving incentives for such digital transactions, its being taxed ! The amount of tax I pay indirectly has shot up without any tangible or intangible benefits with significance. Am open to learn more numbers to prove that DeMo helped the nation and helped those who were most impacted by the whole exercise.

Last edited by aaggoswami : 15th September 2018 at 12:23.
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