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Old 24th December 2018, 13:06   #2791
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

I've seen of late people wanting cash, this is from recent experience from 1) booking a Tempo Traveller for an out station trip, 2) Printing invitations, 3) Hiring professional photographers, everyone wants cash. I don't know how these guys are going to account for their cash but I'll have a problem with my auditor so insisted on a bill with GST. They sure must have innovative accounting methods. That said from these instances , I can say one thing that "parallel economy" is hail and healthy, again.

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Old 24th December 2018, 13:43   #2792
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Dry Ice View Post
Please see the rises each year. Nothing outstanding after Demo. Infact we have seen higher jumps in some of the earlier years.

Data manipulation, lol - I would run out of the pictures limit per post. Heres a gem though
Attachment 1830101
It would be difficult to agree about data manipulation with the picture example you gave, unless you can prove that the data in the picture itself is wrong. The picture is an example of a misleading data visualization, or presenting data in a way to suit the one's narrative.

It is ironic that you write about data manipulation in one sentence and then provide the commentary about "higher jumps in some of the earlier years" in the previous sentence.

The highest jump in the data you posted in percentage terms (39.32%) was a result of tax collection jumping from 165216 to 230181 units (I presume crores). That's an absolute increase of 64965 units. Even the highest jump in absolute units was 84149 units between FY07-08 and FY06-07.

The hike of 18.xx% in the latest FY is much larger in absolute terms (1002741 - 849713 = 153028 units) but less than half in percentage terms compared to the years mentioned above as the hike was from a much larger base. So when you say "Infact we have seen higher jumps in some of the earlier years" - it's true only in percentage terms, but clearly not true in terms of actual number of units.

What you have done is also the same "crime" of presenting/interpreting data in a way to suit your narrative.

Last edited by StarrySky : 24th December 2018 at 13:44.
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Old 24th December 2018, 13:45   #2793
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Originally Posted by SilentEngine View Post
Prosecution or not, there is not enough to dis-incentivize such wrong doers. It should also be of no surprise that, this holds true irrespective of who is at the helm of affairs. Basically lack of 'skin in the game' as Taleb would say. By the time the law catches up, at least couple of generations would have passed.
Agree with that. There is not even enough democratic feedback mechanisms.

Elections every 5 years is just not enough. The term should be reduced to 4 years with the all the state elections scheduled in the X+2 year. That way the feedback is at most within two years.
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Old 24th December 2018, 14:02   #2794
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Default Confirmation Bias !!

Slightly

Some (all?) of the posts in this thread show perfect examples of Confirmation Bias

Quoting from Wikipedia:

Quote:
Confirmation bias, also called confirmatory bias or myside bias,is the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses. It is a type of cognitive bias and a systematic error of inductive reasoning. People display this bias when they gather or remember information selectively, or when they interpret it in a biased way. The effect is stronger for emotionally charged issues and for deeply entrenched beliefs. Confirmation bias is a variation of the more general tendency of apophenia.

People also tend to interpret ambiguous evidence as supporting their existing position. Biased search, interpretation and memory have been invoked to explain attitude polarization (when a disagreement becomes more extreme even though the different parties are exposed to the same evidence), belief perseverance (when beliefs persist after the evidence for them is shown to be false), the irrational primacy effect (a greater reliance on information encountered early in a series) and illusory correlation (when people falsely perceive an association between two events or situations).

Last edited by DigitalOne : 24th December 2018 at 14:10. Reason: Emphasis added
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Old 24th December 2018, 15:57   #2795
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by StarrySky View Post

The highest jump in the data you posted in percentage terms (39.32%) was a result of tax collection jumping from 165216 to 230181 units (I presume crores). That's an absolute increase of 64965 units. Even the highest jump in absolute units was 84149 units between FY07-08 and FY06-07.

The hike of 18.xx% in the latest FY is much larger in absolute terms (1002741 - 849713 = 153028 units) but less than half in percentage terms compared to the years mentioned above as the hike was from a much larger base. So when you say "Infact we have seen higher jumps in some of the earlier years" - it's true only in percentage terms, but clearly not true in terms of actual number of units.
You can ignore the absolute or percentage increase and look at the ratios relative to GDP and GDP growth. That will give you a better picture than absolute/ or % growth.
And in that sense Dry Ice does have a point.
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Old 24th December 2018, 16:21   #2796
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by rrsteer View Post
You can ignore the absolute or percentage increase and look at the ratios relative to GDP and GDP growth. That will give you a better picture than absolute/ or % growth.
And in that sense Dry Ice does have a point.
You further illustrate the point I was trying to make. I was not arguing in favour or against the success or failure of DeMo. I was only trying to say that the same data can be interpreted in certain way (while ignoring others) to suit certain narrative.
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Old 24th December 2018, 18:52   #2797
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Originally Posted by DigitalOne View Post
How do you define "poor policies and their implementation"?
That's quite easy - any policy that is not discriminatory and has been well thought through in consultation with respective experts while considering all the ramifications and repercussions to minimize any potential damage could fall under the category of a good policy. There are well defined metrices to separate a poor policy from a good one. If a policy causes more damage than good, it's a poor one.

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Every time a government changes, should you go and prosecute the previous one?
Words expressed on a forum will have their limitations in how well we define/present the context. I am fairly positive most of us will have lot more things we'll eventually agree on than disagree if we chose get down into the details of it all.

Prosecution is more like a stick that works as deterrent for irresponsible behavior and hedge against rash decision making that has had no intelligent deliberations to back them. This helps prevent officials from adopting hasty, impetuous policies that have not been thought through and its repercussions well understood so damages minimized.

If a drunk motorist causes damage to life and property he is held responsible. On exactly the same lines, being drunk (on power) if I cause damage to life & property, I must be accountable and answerable for it and face consequences.

Higher the office, more the number of the people affected with decisions coming from it. Why should one not be held responsible if their decision has cost people lives and livelihood?

I am least bothered with academic labels of socialist/communist/capitalist etc. In my opinion, most labels are just lazy crutches and rather childish (in general). End of the day we are a complex interdependent system and need to adapt solutions that work with minimal damage.
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Old 25th December 2018, 10:19   #2798
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Just a thought guys, would like to seek your responses:
What if there was a law passed by the parliament which would make hoarding of cash beyond a certain amount, a criminal offence. The amount can ofcourse be debated. What would be the pros and cons of such a law?
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Old 25th December 2018, 10:35   #2799
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by msk016 View Post
Just a thought guys, would like to seek your responses:
What if there was a law passed by the parliament which would make hoarding of cash beyond a certain amount, a criminal offence. The amount can ofcourse be debated. What would be the pros and cons of such a law?
Would this be applicable to per person, per household, per HUF, per business establishment etc.?

For this to happen, 100% of the people would need to be under the banking system. I have known many cases where people have lost money from the banking system since they aren't familiar with it (banking illiterate, if one may say so). There are a lot of areas in the country that operate in cash, primarily because they are not literate in banking and are more worried than before with stories of online/electronic frauds. Despite OTPs, debit, credit and online frauds are widespread.

Focus on 100% education and literacy (banking) would need to be the first step.
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Old 25th December 2018, 10:51   #2800
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Quote:
Originally Posted by Durango Dude View Post
I've seen of late people wanting cash, this is from recent experience from 1) booking a Tempo Traveller for an out station trip, 2) Printing invitations, 3) Hiring professional photographers, everyone wants cash. I don't know how these guys are going to account for their cash but I'll have a problem with my auditor so insisted on a bill with GST. They sure must have innovative accounting methods. That said from these instances , I can say one thing that "parallel economy" is hail and healthy, again.

No need for innovative accounting methods to evade GST for guys like tourist taxis or printing presses or photographers or similar service providers, since they are not resellers of goods/services and do not receive any input credits. If they are the primary service providers and are not part of a chain of GST covered businesses, then its very easy to just take income in cash and not show it in their books. Yes parallel economy is healthy and it will continue to be healthy unless the govt takes real steps to stop the cash economy. IMO, a healthy parallel economy isn't necessarily a bad thing


Quote:
Originally Posted by DigitalOne View Post
Agree with that. There is not even enough democratic feedback mechanisms.


Elections every 5 years is just not enough. The term should be reduced to 4 years with the all the state elections scheduled in the X+2 year. That way the feedback is at most within two years.

The cost of conducting and contesting an election is already too high. Please don't ask for a reduction in the term. The costs to the economy will be unafordable.
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Old 25th December 2018, 11:03   #2801
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Originally Posted by Lalvaz View Post
The cost of conducting and contesting an election is already too high. Please don't ask for a reduction in the term. The costs to the economy will be unafordable.

There should be a maximum term limit on each elected representative, at all levels (from local panchayat/municipality to Parliament), and have a maximum age limit to be in active politics. Here we have people who have been MLAs/MPs for 5-6 terms.
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Old 26th December 2018, 10:41   #2802
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by Miyata View Post
That's quite easy - any policy that is not discriminatory and has been well thought through in consultation with respective experts while considering all the ramifications and repercussions to minimize any potential damage could fall under the category of a good policy. There are well defined metrices to separate a poor policy from a good one. If a policy causes more damage than good, it's a poor one.
On any policy, a different set of "experts" will (and should) argue exactly the opposite. For example, do you think the Bank nationalization done by Indira Gandhi or the Liberalization policy followed by PVNR/MMS have been unanimously supported by all experts?

Quote:
This helps prevent officials from adopting hasty, impetuous policies that have not been thought through and its repercussions well understood so damages minimized.
This will just bring in a policy paralysis. No official will take any policy decision because another set of experts will argue (with data) on the exact opposite.
Quote:
If a drunk motorist causes damage to life and property he is held responsible. On exactly the same lines, being drunk (on power) if I cause damage to life & property, I must be accountable and answerable for it and face consequences.
There are other ways than criminal prosecution in a democracy. That's why I said more frequent elections, so that the "punishment" (i.e loss of power) is faster and they can't cause further damage. Referendums could be another solution. We need more democracy; unfortunately in our system we vote once in 5 years and twiddle our thumbs for rest of the period.

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Why should one not be held responsible if their decision has cost people lives and livelihood?
Yes, they should be held responsible and accountable, but no criminal prosecution. The courts are no experts in public policy.
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Old 26th December 2018, 19:22   #2803
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by DigitalOne View Post
Yes, they should be held responsible and accountable, but no criminal prosecution. The courts are no experts in public policy.
At least something we can agree on! Like I mentioned earlier, prosecution is just the stick (hiss of the snake; bark of a dog; etc). I am not at all adamant about any specific methodology - as long as it legally allowed and works well towards a desired end result, I'm game. If early elections can do that, so be it.

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Originally Posted by DigitalOne View Post
do you think the Bank nationalization done by Indira Gandhi or the Liberalization policy followed by PVNR/MMS have been unanimously supported by all experts?
That's my point as well - experts shouldn't all agree 100%, if they do surely everything's rigged and the committee is made up of yes-men.

From what history I've read of the bank nationalization, there was much deliberation backing the decision. All one asks for is just this - good, healthy dialogue to ensure the decisions are at least intelligently thought through.

Furthermore, nationalization and liberalization didn't kill people. The notes ban did. The experts need only weigh in the pros and cons/damage and gain and then decide if it might be worth pursuing. Nothing is risk-free, just have to find ways to manage the risks.

Quote:
Originally Posted by DigitalOne View Post
This will just bring in a policy paralysis. No official will take any policy decision because another set of experts will argue (with data) on the exact opposite.
The process of argument/debate will bring forth the much needed clarity. To begin with, the statement of the problem will get well defined which in the notes ban case was not.

Obviously, there would be a process (and its documentation) in place to ensure the collective decision remains immune to prosecution (or whatever else is in its place) but the learning from the process gets well acknowledged
and mistakes promptly addressed.

Quote:
Originally Posted by DigitalOne View Post
There are other ways than criminal prosecution in a democracy.
Anything that works is well worth a try. One can't be adamant on single-track solutions. I agree.

I also fully understand the discussion here is highly theoretical and will have no bearing on our life one way or another. However, I am happy we could express our disagreements in a courteous and civil manner and no one felt offended. It's getting harder to find people that can objectively disagree without taking offence - possibly a reflection of the time we live in!
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Old 27th December 2018, 11:49   #2804
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Originally Posted by StarrySky View Post
The highest jump in the data you posted in percentage terms (39.32%) was a result of tax collection jumping from 165216 to 230181 units (I presume crores). That's an absolute increase of 64965 units. Even the highest jump in absolute units was 84149 units between FY07-08 and FY06-07.

The hike of 18.xx% in the latest FY is much larger in absolute terms (1002741 - 849713 = 153028 units) but less than half in percentage terms compared to the years mentioned above as the hike was from a much larger base. So when you say "Infact we have seen higher jumps in some of the earlier years" - it's true only in percentage terms, but clearly not true in terms of actual number of units.

What you have done is also the same "crime" of presenting/interpreting data in a way to suit your narrative.
Absolute numbers may not be the best way to judge growth. We never judge our investment successes on absolute numbers, or the hike in paycheck etc. If we are comparing absolute numbers, should we take into account the absolute numbers of population as well?

Quote:
Originally Posted by StarrySky View Post
I was not arguing in favour or against the success or failure of DeMo. I was only trying to say that the same data can be interpreted in certain way (while ignoring others) to suit certain narrative.
Unfortunately, this thread is all about discussing the merits/demerits of DeMo.

But I agree with your point (which was same as mine to start with) - data is being interpreted in certain ways to suit a narrative.

With that, I will bow out of here (from this discussion at least).



Namaste.
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Old 31st December 2018, 13:02   #2805
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Sounds like prejudice to me.

Funny thing about demonetization, hard to complain about it from a first person point of view, without incriminating oneself. Shoot from the shoulders of the "downtrodden".

Cheers

This opinion also sounds prejudiced to me.




All of us in our family have been paying taxes dutifully and have never hidden any income from the state.



I shoot from the shoulders of others in my family, because I traveled out on the night of the de-mon announcement and did not face its immediate aftermath.


My dad had withdrawn some money, fortuitously the day before, and that saved us a lot of hassle in the short run. We did not face a 'cash crunch' immediately. I dread to think the pickle we would have found ourselves in, if that withdrawal had not happened.


This did not spare us from wasting several hours trying to deposit the 500s back, and to get the 2k, 5k that we had to beg out of our OWN money from banks.



Also, I wonder if, during this period, you ever experienced doing vegetable shopping with a 2k note in the pocket? Would be interesting to know how successful that was?



I believe, the whole citizenry was trodden all over by the state with this ill conceived exercise.
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