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Old 3rd September 2019, 19:27   #2821
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Demonitisation was a thing. A specific thing. It is not the same as a note or coin going out of use because of replacement, or lack of popularity, or even because it is no longer produced.
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Old 4th September 2019, 08:00   #2822
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by sushantr5 View Post
I think the slowdown we see today is long term impact of first demonetization. Though I supported demonetization when it was happening but today I feel it was huge mistake from economics perspective.
Demonetisation was not a mistake, it was a blunder with a capital 'B' to put it lightly. It hit everyone other than the intended target. If 99.3 % of the notes coming back is not proof enough of the blunder, I don't know what else could be.

Even before the impact of demonetisation started to reflect on the economy, a hastily put together GST was thrust on us. You don't roll out half baked systems in a nation of 1.2 billion people. Ensure all systems are properly functioning. Roll it out in a small state and fine tune the systems / processes wherever necessary. Train all the associated staff. Fix the hitches before a national roll out.

It took 18 months of constant decline in auto sales for the govt to even acknowledge that there is a problem. The latest budget lead to flight of FPI when we least wanted it. 8400 crores, nothing less. Who in their right mind would want to pay 42% tax on their earnings? Don't the policy makers have any kind of common sense in their heads?

Last edited by Aditya : 4th September 2019 at 21:42. Reason: Political comment deleted
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Old 4th September 2019, 17:00   #2823
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by longhorn View Post
Demonetisation was not a mistake, it was a blunder with a capital 'B' to put it lightly.
It certainly does sounds like a blunder to me...

... until I read this:
Quote:
If 99.3 % of the notes coming back
Only when I see this number I get reminded that something is not right.

I can't seem to accept that number. I still feel that only about 90% could came back. But they printed the difference which is now being used to buy MLAs and MPs in bulk.

So it is hardly a blunder, right?
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Old 4th September 2019, 17:06   #2824
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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OT: I wish ATMs have an option to select the denomination that one wants. This can be done at the teller windows, why not in ATMs?
Don't know which bank ATM you did use. But in Citibank, if I withdraw 4k, then it disburse only 500s and 100s. I know, this may not be a practical case when one has to withdraw large amount, but just thought of sharing this info.
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Old 4th September 2019, 17:18   #2825
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Don't know which bank ATM you did use. But in Citibank, if I withdraw 4k, then it disburse only 500s and 100s. I know, this may not be a practical case when one has to withdraw large amount, but just thought of sharing this info.
The bank is HDFC. The ATM is in DLF, Chennai.
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Old 4th September 2019, 17:32   #2826
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by swissknife View Post
OT: I wish ATMs have an option to select the denomination that one wants. This can be done at the teller windows, why not in ATMs?
To avoid getting 2000 rupee notes, make multiple withdrawals of Rs. 1500.

PS: On the night of demonetization, I made 18 withdrawals of Rs 400 each to avoid getting a 500 or 100 rupee note. Luckily there was nobody in queue.
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Old 4th September 2019, 17:46   #2827
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

By some estimates more money came back into the system than was printed in the first place. This argues that a flood of fake currency notes came in and was converted to legal tender by being accepted by banks.

My father is in the printing industry and he told me that the new notes have no particularly new security features compared to the old ones, whose security dates back to the 1990s / early 2000s. So despite the bright colours itís all 20-25 year old technology and just as easy to counterfeit as the old notes were.

The fake 2k notes detected jumped 28 times is a sure indicator that far more than that is floating around and probably already in your wallet.

https://www.indiatoday.in/india/stor...959-2019-07-16

Out of these 3.34 lakh or 63.9 per cent notes were detected by banks and the remaining by RBI. In 2017-18 detection of Rs 2,000 counterfeit notes had jumped 28 times to 17,929. The detection of same denomination was lesser in 2016-17 as the Rs 2,000 notes were circulated November, 2016 onwards.

Quote:
Originally Posted by blacksport View Post
It certainly does sounds like a blunder to me...

... until I read this:

Only when I see this number I get reminded that something is not right.

I can't seem to accept that number. I still feel that only about 90% could came back. But they printed the difference which is now being used to buy MLAs and MPs in bulk.

So it is hardly a blunder, right?
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Old 4th September 2019, 18:03   #2828
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Quote:
Originally Posted by kavensri View Post
Don't know which bank ATM you did use. But in Citibank, if I withdraw 4k, then it disburse only 500s and 100s. I know, this may not be a practical case when one has to withdraw large amount, but just thought of sharing this info.
Quote:
Originally Posted by swissknife View Post
The bank is HDFC. The ATM is in DLF, Chennai.
Quote:
Originally Posted by blacksport View Post
To avoid getting 2000 rupee notes, make multiple withdrawals of Rs. 1500.
IndusInd Bank ATMs (at least in Chennai, not sure about other cities) allows you to choose the denomination.
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Old 4th September 2019, 19:09   #2829
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Political comments in this thread apart- I see the slowdown as the cold war between government(or what's good of it) and the unorganized/parallel economy/black money sector.

Tax hawks are sitting on vast data of 1)IT paid before demo years; 2) cash deposits during demo 3) tax compliance post demo/GST. This has resulted in them being able to find incomes in 2nd tier cities and towns; I am not sure if this is the main motive for demo or an unintended side-effect.

On the business side, entrepreneurs have to keep bribing the various state and central departments to ignore the mild and larger discrepancies; post GST, the without-bill practice becoming difficult, that auxiliary revenue source is drying up. This is like the whole ecosystem is aligned to benefit you if you are corrupt and will punish you if you do business by the book.

Only if this 'cash only' economy starts paying it's taxes, a progressive tax regime is possible; till then the TDS paying salaried classes will continue to get a raw deal.
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Old 5th September 2019, 10:32   #2830
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Economies existed even before there were taxes or government. The whole idea of govt running our lives for us has been indoctrinated in our minds that we do not see beyond societies without taxes.

Not to say that we should do away with govt and taxes. But governments now do not simply provide basic necessities like infrastructure ans security, but has now got into income/wealth redistribution.

And no, the rich guy next door deserves to pay nothing more to the government than you, and you have the right to be treated on par with him.

Do away with the insane tax system and there will not be people hoarding large amounts of undocumented wealth.
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Old 5th September 2019, 15:24   #2831
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

Quote:
Originally Posted by blacksport View Post
Only when I see this number I get reminded that something is not right.

I can't seem to accept that number. I still feel that only about 90% could came back.
Unofficial estimates say that more than 100% of the notes came back. Which is why the daily declaration of score ( X % of notes have come back) stopped all of a sudden much before the 31st December deadline. There are two reasons for this. Some banks were not able to distinguish between real and fake notes. Hence they accepted both. Some banks knowingly accepted both, based on the 'relationship' with their clients. There was also talk of RBI press goofing up and printing the same series twice over. End result - the stated goal of 30% notes not coming back remained a pipe dream.
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Old 6th September 2019, 10:41   #2832
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Default Re: Government scraps Rs 500 and Rs 1000 notes!

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Originally Posted by hserus View Post
By some estimates more money came back into the system than was printed in the first place. This argues that a flood of fake currency notes came in and was converted to legal tender by being accepted by banks.
This has been a long standing story. Counterfeiting could have been a foreign enterprise or from within, incl printing of duplicate notes. In either case it is very tough to fix.

Let us see how it develops. However, I do not think the 2000 note surviving for long. Most likely not demonetized but essentially quietly withdrawn.
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