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Old 19th November 2016, 20:55   #1021
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It's best to visit your bank. My mother went to her SBI Bank on Thursday a holiday in Karnataka. I told her she would have a very tough time considering it was a PSU bank. But she returned smiling in short time. The arrangements were good with a separate queue for senior citizens.
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Old 19th November 2016, 21:28   #1022
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To the people discussing doctor's example etc.

Therefore when the Doctor evades tax by using cash to buy free flowing wine or White goods, the Govt is happy as these goods are covered under indirect taxes and if the doctors like mentioned in the example starts to mend his ways and Govt collects more taxes then the rate of Indirect Taxes may actually come down which will result in some benefit for poor people too who also buy such goods by paying the equal rate of tax on such goods. Even we T-Bhpians often complain about the high rate of taxes on our cars.

Also kindly note that the Demonetisation exercise is for the Black money etc generated in the PAST and doubting whether it will stop generation of FUTURE black money is useless as for that many other steps will be taken.
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Old 19th November 2016, 22:07   #1023
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Talking about doctors , here is what a relative narrated. He goes to a doctor to get his mother's knee treated , the doc doesn't have a card machine, refuses to take a cheque unless an amount of 30% is added to it , after all he will have to pay that and he doesn't want it to be from his pocket and doesn't take 500 or 1000 notes. He wants the amount in 100s or lower , 40,000 is the fee. Is this the sign of things to come ?
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Old 19th November 2016, 22:37   #1024
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Re: Government scraps Rs 500 and Rs 1000 notes!

Originally Posted by sammyboy View Post
he doesn't want it to be from his pocket and doesn't take 500 or 1000 notes. He wants the amount in 100s or lower , 40,000 is the fee. Is this the sign of things to come ?
Can't he take money through wire transfer like Rtghs etc. Something is sure fishy out here.
I am actually quite happy now after being so bitter with this decision of Government. The lower denomination which was rare to see is now very common which is kind of surprising. Was there a hoarding? or simply case of greed that had crept into society. Leaving fake note aside why did RBI print so many higher denomination notes. Was is it due to falling value of rupee?

Whatever may be reason for RBI to print notes in higher denomination but it has sure taught me how my parents lived in 1970s where everything was rationed and people stood in que. No wonder we still live in a developing country and cant ever think of competing with China.
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Old 19th November 2016, 23:23   #1025
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Re: Government scraps Rs 500 and Rs 1000 notes!

Let me share my perspective of an entry level IT guy. Sorry for the long post.

I am a salaried employee and considering I donít have any business or rental income, I have no avenues to gather unaccounted money.
A big chunk of my salary is spent on rental costs towards my PG accommodation. Now this is something that HAS to be paid in cash. My landlord does not want to accept any other channels for reasons best known to him. And for anyone who would say I am wrong to go by his terms, I would encourage you to try negotiating with the local population in Gurgaon.
The rest of my salary is completely traceable as all of it is either spent through online transfers or plastic money.
So there is not much of an impact to me.

What troubles me is that I havenít come across anyone who had unaccounted money and HAS been impacted by this either.
  • Cab operators I have spoken with are happy after having deposited their money in their relativeís names.
  • Small retailers confirm that most of unaccounted money stays invested in other avenues and whatever cash is held is not significant or has been adjusted as in the first case.
  • Large players are using the multitude of measures discussed here to save their money albeit at a loss.

Let me give an example.

A person, Mr. A held 5 lakh unaccounted cash.
He requests his mother and wife to deposit that in their name. The money is now legal.
He withdraws that amount letís say 6 months after all this is yesterdayís news.
Mr. A never lost any money! And all that the nation gained is that capital over a period of six months.

Now I agree this can only be done by relatively small hoarders of cash. But I feel that it is people like them who will account for a majority of black money so to speak.
People with multiple crores of cash will be few and far between. And the smaller players, who cumulatively would have made a difference, get their money back.

This whole demonetization exercise makes the most sense if viewed as a step to reboot the fake currency rackets.
But it is hardly a surgical strike on black money as it being made out to be.
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Old 19th November 2016, 23:38   #1026
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Re: Government scraps Rs 500 and Rs 1000 notes!

I would just like to add to this an additional point.

Mr X has a good job and also owns property. He lets out the property and collects rent as cash. He does not file the rental income and pay taxes on it.
He instead uses it for his day to day expenses i.e. he spends it as it comes.

The good job he has. That white money remains in the salary account in the bank itself.

All his records are of course clean and he did not even have to clean any of his funds.

The saddest part in all this. In almost all cases Mr X will consider himself a model citizen and keep shouting about how the country will never become better.
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Old 20th November 2016, 02:53   #1027
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Government scraps Rs 500 and Rs 1000 notes!

Does anyone remember till very recently, it was very very easy to get a SIM card. But after 9/11 everything got regulated in quick time and now even a closest friend thinks twice before allowing to use his name and documents to buy even a temporary prepaid card. I am not saying that now all the 100% of SIM cards are used by verified users, but this figure should be more than say 80-90% and I can say that is a very big change.

Another example comes to mind is that now for any accident, hit and run, robbery or murder crimes we take for granted that there will be some CCTV footage available. Use of CCTVs are not mandatory but still their prevalence is getting common at a very rapid pace. So who knows the movement towards access to banking and ATMs etc also clicks big time.

Also by putting a small step of using PIN for Credit card payments (at the recommendations of the H'oble SC too) the frauds are reduced to some extent. There must be some strict security measures to be put by banks so that the poor and Sr Citizens who are wary to use the ATMs etc could gain the trust.

Last edited by carwatcher : 20th November 2016 at 02:56.
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Old 20th November 2016, 06:50   #1028
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Re: Government scraps Rs 500 and Rs 1000 notes!

Originally Posted by Sawyer View Post
could all the smart minds in Delhi not come up with what truly would have been a surgical strike that achieves may be 80% of the objective without collateral damage, instead of an explosion that achieves 100% of the results with massive collateral damage?

This becomes even more of a question IF the often stated statistic, that this objective - elimination of black wealth held in 500/1000 rupee notes - is only 6% of the total store of black wealth, is true. Why so much damage for so little effect IF that be the case?
Originally Posted by SDP View Post
That's the reason why the Govt is trying to restrict the avenues of spending old notes as much as possible. That's the same reason why it was announced at 8pm with a 4 hour window before the notes became invalid.
Before I move to the quotes above from our last two posts on the subject, let me first sincerely thank you for the first useful and intelligent exchange I have been able to have on this thread on this subject; it has helped me as well in challenging and refining my thoughts, which is more important to me than the fact that at the end that we still disagree. That to me is perfectly ok, because we are starting with different assumptions, leading to differing points of view, set out below.

Your view, in support of GOI, is full steam ahead, it is a good intention, never mind the collateral damage that all Indians may suffer, let us support the GOI even if not legally required to do so. Or even if it is not illegal to not cooperate.

My view is that it is better that the objective be diluted - and my belief is that there are ways that could have been used by GOI to limit this dilution substantially by intelligent means as in a true surgical strike - but leaving that aside, let collateral damage be restricted to a bare minimum, and in that direction, I will applaud anyone that legally works to make it so.

Which view is valid? None of us can truly say today; it can only be said when the end results are visible in terms of how much of the objective has been achieved, and what has been the extent of the collateral damage on all Indians. Although you and I are both fortunate in not having to bear the brunt of the initial collateral damage being inflicted on many of our citizens, in the medium term that certainly will not be the case. I know for sure that I will suffer it indirectly in many ways, even as an honest citizen. But my ability to absorb it, and dare I say yours as well, will definitely be better than that of many of our less fortunate citizens.

And the nature of the consequences, good or bad, that will be visited on all that made this decision will also depend on what the equation of the objective achieved versus the collateral damage done turns out to be. Only time will tell; it is too complex a chain of actions/reactions for anyone else to do so with accuracy today, but the law of Karma is eternal, universal and inexorable. That is my firm belief at any rate.
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Old 20th November 2016, 08:38   #1029
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Re: Government scraps Rs 500 and Rs 1000 notes!

Originally Posted by bblost View Post
Mr X has a good job and also owns property. He lets out the property and collects rent as cash. He does not file the rental income and pay taxes on it.
He instead uses it for his day to day expenses i.e. he spends it as it comes.

The good job he has. That white money remains in the salary account in the bank itself.

All his records are of course clean and he did not even have to clean any of his funds.
In every country, this practice exists in some form, in differing degrees. Some tax evasion will always be there and the way to minimise that isn't by any law or enforcement, it is by creating an environment where the citizen visibly sees the returns received from the taxes paid, as an overhead of his being able to live in a civilised way. Not as something he has to pay for a wasteful, inefficient, corrupt government, that has a bloated bureaucracy that is shameless with its visible perquisites like fancy cars, foreign trips that have no real purpose, and where the citizen receives inadequate infrastructure of poor quality because of all the dishonest practices by which it is built. All of this is one major disincentive to pay taxes honestly.
Who will bring about THAT change in India?

Moving on: every day brings forth to light a new unintended consequence. This one, though it may seem funny, isn't so for the women in question, particularly given how widespread is their abuse in India. Many women had a "black money" hoard, legally accumulated, but hidden from their husbands and mothers in law. Now, having to deposit it, this has vanished; many husbands are said to be surprised to see how much their wives had stashed away - legally, as far as GOI is concerned. Now, the wives have lost this and with this, some much needed financial independence. When I mentioned this to my wife, she nodded, because the servant is actively having to deal with this; the money she had hidden away to prevent her husband from drinking it away. Now that it is disclosed, he will beat it out of her. This issue therefore even affects those that deposit less the 2.5 lakhs. And those that deposit in excess have to deal with the IT dept, AND husbands/mothers in law/other parasite relatives.

Last edited by Sawyer : 20th November 2016 at 09:07.
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Old 20th November 2016, 08:57   #1030
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Re: Government scraps Rs 500 and Rs 1000 notes!

More than a 1000 posts in 12 days; this is one hot topic.

I have been fairly unaffected so far as my business takes and makes payments online or through cheques. There was also enough petty cash flow for the small grocery / fruit purchases. But yesterday I visited the fish market and boy was I shocked - there was no fresh fish. The fisher folk are in a sorry state as nobody is venturing out to fish. Their whole system was based on 500s and 1000's and now it's stuck. The boats don't go out and there's nothing to sell. When there's nothing to sell, how will they buy things. If they don't buy things, how will local businesses survive. This has affected entire villages and towns.
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Old 20th November 2016, 09:11   #1031
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Re: Government scraps Rs 500 and Rs 1000 notes!

Originally Posted by theMandarin View Post
Now I agree this can only be done by relatively small hoarders of cash. But I feel that it is people like them who will account for a majority of black money so to speak.
People with multiple crores of cash will be few and far between. And the smaller players, who cumulatively would have made a difference, get their money back.
The picture will be clear only after Dec 31 if Govt comes out with the total cash deposited figures. So far it is close to 5L Crores and expected to reach 10-12 L crores. If rest of 2-4L out of around 14L Cr in circulation is not showing up the exercise was worth the pain.
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Old 20th November 2016, 09:17   #1032
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Re: Government scraps Rs 500 and Rs 1000 notes!

Originally Posted by samaspire View Post
The fisher folk are in a sorry state as nobody is venturing out to fish. Their whole system was based on 500s and 1000's and now it's stuck. The boats don't go out and there's nothing to sell. When there's nothing to sell, how will they buy things. If they don't buy things, how will local businesses survive. This has affected entire villages and towns.
Good observation; but one that is going to resonate with very few that are posting here, I am afraid. There are many more things happening on these lines all over the country, but this forum isn't the place to discuss these, I have realised. But don't let that discourage you.
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Old 20th November 2016, 09:32   #1033
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Re: Government scraps Rs 500 and Rs 1000 notes!

Originally Posted by samaspire View Post
Their whole system was based on 500s and 1000's and now it's stuck. The boats don't go out and there's nothing to sell. When there's nothing to sell, how will they buy things. If they don't buy things, how will local businesses survive. This has affected entire villages and towns.
Well this was going to happen. For how long it will stay is anyone's guess. One good thing that has resulted from this whole exercise is that the NCR people are breathing a less toxic air these days even though the winter has set in early this time compared to last few years and we all expect pollution levels to increase in winters. But as a result of this, the truck traffic, both destined for Delhi and passing by, has reduced manifolds and hence vehicular pollution is at an all time low. Lots of small scale industries, the ones usually blamed for a significant amount of industrial pollution, are also running less shifts with there already produced goods lying unsold or un-picked.
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Old 20th November 2016, 09:45   #1034
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Frequently Shouted Questions about Demonitisation!

Taking the liberty of posting from Facebook from a dear friend of mine. He has hit the nail on the head busting all the media hullabaloo on the recent "demonitisation". It's a long post, but do read it. Try to share it with one and all. It makes a lot of sense. Being a Chartered Accountant myself, I personally feel the entire hype is over created by a media that doesnt favour the current administration.

ďFrequently Shouted QuestionsĒ (FSQs) about #Demonetization

For the past 10 days, all we see and hear around us is about #Demonetization. With so much of information from the mainstream media, WhatsApp forwards, social media shares, some of us are confused about this whole deal. First off, for those who oppose this mindlessly or because of political reasons, stop reading this. Nothing will convince you. Others read on.
This is my attempt to clarify some issues which I feel Iíve understood. Letís take some of the FSQs against this move, and my answers for it.

1. I support the move but implementation is poor!

Agreed there is a real liquidity crunch and this is a genuine concern/ question from most people. However, can you think you think of a better way? Most say they must have given time, informed in advance, printed enough notes before recalling the old ones. First, if you want it to be a tight lipped operation, printing new 500s and extensive printing of 100s and 50s will surely not let the operation be a secret. Now imagine had this not been under wraps and say, a 2-month time was given, what would have happened? Whatever we saw for 4 hours- from 8 PM till 12 midnight on 8th November would have happened for 2 months. People having black money would try their best to offload the cash by whatever means, buying gold and land for example, driving the prices up to a level that a none of us would ever be able to afford for the near future. And yeah, the hawala operators would be working overtime. Of course, I do agree there should be better penetration of banks and internet throughout the country, but as it is what other way to implement this scheme? I canít think of any. In a way, now people would be forced to adapt, demand for internet would be high, driving supply to reach everywhere! Banks would have the incentive to open more branches and ATMs throughout.

2. Thatís no excuse. You could have given time to exchange, then track all
the illicit transactions and book the guilty later on.

Theoretically yes. But imagine the amount of manpower that would be required to carry this out. And when we agree itís the super-rich who need to be booked, do you think they wouldnít hire the best lawyers to defend themselves? While their cases go on for eternity the whole purpose of this move would be defeated with them cashing out all the black without getting taxed. Prevention is always better than cure, right?

3. Common man is suffering! Are you blind to their problems?

A typical political opposition against the move. Well, let me tell you guys, we suffer so much in our daily life because of these very politicians who seem to shout for us. These sufferings have been for such a long time that we have come to accept it as a daily part of our life and we forget about that! For eg, in Chennai the metro rail project has been going on for ages. So many routes were mapped as one ways to enable traffic flow. Today even after a phase of construction is complete these remain one ways and we need to drive around for an additional kilometer just because the people in power forgot why they made it a one way in the first place! How many of you have got your driving license or ration cards hassle free? How many small businesses are able to get license to operate without bribes? How long have we waited on the road for a VIPís motorcade to pass through? So, politicians, please stop this drama. We have suffered/suffering enough already. Let us undergo one more suffering temporarily to give this a chance.

4. The rich black money hoarders donít stand in queues itís us who are bearing the brunt!

I think this too was started by some politician inciting people to feel victimized. Please people, think for yourself. Why would someone with black money ever come to the bank? It is the honest citizen who would go to the bank. The very fact that it is black doesnít allow him to deposit it in the bank for fear of facing income taxís wrath! Yes, we bear the brunt because of them. But if we donít then their black money would never go out of circulation.

5. So that means his black money is never going to come out in the open! We still don't get it back! The whole plan is a flop anyway!

If the black money in old notes is burnt, never reaches the bank it would in fact help the economy as much as the black money which reaches the bank. Let me explain this as simply in a crude manner.
Imagine you have these assets:
i. Car Ė 5 Lacs
ii. House - 20 lacs
iii. Total Assets (i+ii) Ė 25 Lacs

and imagine you have these loans (aka liabilities)
i. Car loan - 4 lacs
ii. Home loan - 16 lacs
iii. Total Liabilities (i+ii) Ė 20 Lacs

Your net worth is now Assets-Liabilities = 25-20 lacs = 5 lacs.
Now imagine one fine day you see your car loan has vanished! Then your loan/ liability is only 16 lacs now! Which means your net worth is now 25-
16= 9 lacs! Your credit worthiness has now increased!
Similarly, the currency notes are a liability to the RBI. Thatís why we see the words ďI promise to pay the bearerÖĒ on currency notes. Now when this black money doesnít reach the bank the RBIís liability will fall strengthening the rupee. Would you like a stronger rupee or a weaker one? Well thatís a no brainer, right?!

6. The government is coming up with new rules every day! Its chaotic and unplanned!

Of course, its chaotic. But why did some of us agree to exchange notes on other's behalf? Why do we agree to have someone elseís cash deposited in our accounts? I think people in the market and CAs know for a fact that some NGOs and trust started collecting cash for converting as soon as the announcement was made. Didnít we read news reports about co-operative banks and societies taking cash and issuing back dated deposit certificates? Aren't we reading about touts taking commissions for converting the notes? When we keep coming up with new ways to evade the system, the system will also evolve. To go back to question 1, imagine, within a span of 10 days if our bright minds could think of so many ways to circumvent the system then what would a 2-month notice period have done? Canít think of it! Did you know the government is also making positive rules like swiping cards in petrol stations and merchants and getting cash for it? They are paying salary advance in cash for central government employees to ease currency circulation in the market. Lets look at the bright side too now and then.

7. Black money isnít stashed under the beds like in movies. Itís the form of real estate, gold, etcÖ.

First, of course black money is stashed away as currency! Infact fake money is only stashed! And this move is directed against fake money too. Do you think naxalites and terrorists from across the border invest in lands, sell them, pay capital gain tax, then use that money to buy arms?
Its also true to a large extent that people who had untaxed income, would have invested in assets before 8th November. But tell me now when he bought the land or gold using his cash, where did that cash go? Did it magically vanish from the system? Itís still lying as black money in the hands of the seller of the land or the jewelry store owner, right? Now these guys have to either deposit the cash and pay tax or rid themselves of the cash. Either ways, going forward in the future they do not have the option to carry on these transactions! Isnít that what we want ultimately? If your argument is to say the guys who have land and gold have escaped, well yes they have! But is our intention to indict people or to rid the system of black money?

8. What about the rich fellows Ambani and Adani???!!! And the rich are finding ways around this anyway!

Well really what about them? Just because they are rich you hate them? What is the charge against them? As long as they transact in white, pay taxes, comply with laws whatís anybodyís problem how much they earn! And if they donít follow the law, yes they must be dealt with. In fact, if thereís proof the politicians must charge them instead of shouting slogans. Lets not stoop down to the level of the media and politicians. We are smarter than that.
And yes, there are leakages, which is inevitable. But no one can convert all their black into white. There is a limit to it and with news about tax department sending notices, people are feeling the heat now. Once again, we would be to blame if we allow our accounts to help them change it. Out of 14 lac crore of currency, even if a few thousand crores leakes without getting taxed, still we get to win end of the day!

9. What about the black money lying abroad.

Of course, it is a huge problem. But letís clearly understand black money stashed abroad and domestic black money are two separate issues. While itís so hard to bring back black money stashed abroad, domestic black money is very much within our control. Itís not easy to negotiate with countries with laws we donít control to force them to credit all the money back to India! Moreover, not all money lying in foreign accounts is black. Some of it may be genuine taxed income earned by the depositor. Of course, there is an SIT formed, we are hearing action is being taken. This is what we must understand again, going back to our question 2. Itís a long legal battle to prove someone is guilty especially when they engage the best lawyers and are influential. Keeping this in mind, just because we are still unable to recover the black money lying abroad, doesnít mean this move is bad! Domestic black money is an equal contributor to our woes! We are in fact affected worse by this in our day to day life and everyday transactions.

10. Because 20% of them have black money 80% of us are being punished!

First off, stop listening to politicians shouting on TV debates. Letís understand we are not punished! There is no punitive action taken against us! We are facing a massive inconvenience, not punished. Let's see the benefits of this move, then decide whether this inconvenience is worth it or not. While itís easy to feel offended we are being inconvenienced because of a small group of hoarders, we need to think what other option we have. How else do we flush the system? Because majority of us are simple people with no black we have long queues in the bank. Letís do our bit now to enjoy the benefits later. To go another step, Iíd say most of the people reading this wouldnít be the people who are really badly affected by this because we have access to cards, smartphones for e-wallets and NEFT/RTGS transactions. Itís the people in the lowest strata who really bear the brunt like fishermen, daily wage laborer, etcÖ. I am already reading that some builders are taking care of the construction workerís food requirements. Likewise, if we employ any of these people who have no clue about anything, all we need to do is show them the direction to a bank to open an account. Opening a Jan Dhan account takes hardly any time since it has limited KYC requirements.

11. What about people who donít have bank accounts? Or people who donít know to open accounts.

As per what we read on paper, just 20,000 families in India today do not have bank accounts. Anyway, assuming this to be false, Like I said earlier, educate these people to open an account! Even if they have one account per family they can survive right. Instead of complaining on behalf of someone, why not act? Why not help them? In fact, itís been 10 days now. If these politicians who are barking about the poor really care about them, theyíd have helped them open accounts. They have massive manpower and reach everywhere. If they can canvas street by street for votes, canít they help the few poor families in their reach to open bank accounts?

12. What about the deaths and the difficulty in performing weddings?!
I read a good piece on this - Read it if possible. Ok, these so called ďdemonetization deathsĒ are definitely overhyped. Of course, even a single death is tragic but donít fall for the politicians calling for rollback citing these. While no one can dare trivialize even a single death, itís not fair to call a rollback either. If itís really a massive disaster, we can be pretty sure this government will not be elected ever again. Thatís the punishment theyíll get from the people. But political parties trying to get mileage out of tragedy is their usual shameful approach to any issue.
Regarding weddings, I am sure for the first few days the unfortunate families which had weddings scheduled would have suffered badly. But now that we know there is no way to beat the system shouldnít we adapt ourselves? What are the biggest wedding expenses? Catering and hall rent. Two huge expenses that can easily by paid by cheque. The argument that the caterer isnít accepting cheque does not hold tenable now! Will he waste the vegetables purchased just because he isnít paid in cash or will he take cheque and do his job? And if you are adamant to pay only in cash, well, the whole point is to change the system! The caterer needs to accept your cheque. And jewels and clothes can always be shopped at stores which accept cards. Now donít tell its easy for me to sit and talk itís hard to follow in real life. It's hard, yes, but we need to adapt! Didnít we adapt in times of utter disarray like the Chennai floods and Gujarat earthquakes? Didnít we live through that? We can survive this period too surely.

13. Well, whatever said and done, itís the ďhonest aam-aadmiĒ who is hit now. Even if banking is the way to go, it canít be thrust upon me. Itís my wish when to adopt. This is dictatorship.

Lucky me, I am no politician. I can speak the truth without the fear of ďhurtingĒ the aam-aadmi and losing votes. Well Mr. aam aadmi, you and me are as corrupt as the politicians we blame. Take a small example. When we buy stuff from a trader when he says ďsir 500 rupees with bill 420 without bill, what do you want?Ē We gladly take the 420 rupees, being the 420s we are right? We just helped someone evade paying VAT/ state taxes and income tax right there! How many of us have undervalued lands and registered them to cut down registration fees? Probably a negligible portion of us are so straight forward that we obey the law even when we know no one is watching us/ we wonít get caught. But a bulk of us are as corrupt as the system we blame! Hell, we are the system! We canít even maintain a disciplined queue, we canít maintain lane discipline, we canít take bills and pay the extra 10-20% and so we have no right to talk about the ďhonest aam-aadmiĒ. We definitely need laws to regulate us. Most of us blame the officials for taking money, but it is us who spoil them. In fact, do you know it is the MNCs who we hate who actually do whatever they can to not pay bribe? Europe and USA have strict anti-bribery laws which pressurizes their Indian subsidiaries follow these laws diligently (read up about FCPA). They donít mind delays but they avoid paying bribe easily like us. Now is a good chance for us to avoid paying bribes, even if demanded, citing the new developments. If all of us say no, (utopia) would they take?
And think about this in the right perspective. After explaining how essential tax is for the country, given an option would we or would we not pay income tax? No one is reading you mind, so you can think honestly. Most of us would never pay income tax, was it optional. Why do we pay income tax then? Because itís a law! Thatís why. If we donít pay, we would be prosecuted. Thatís the only reason we pay. Isnít this then forced upon us? Isnít this dictatorship? If you live in a country, you need to follow its rules right. Imagine living in a lawless land like Waziristan. So, itís all a matter of perspective. Again, I understand it was too sudden, but itís our job to adapt! We had so much time! Itís been years after the advent of debit cards and NEFT and e-wallets. Given time, we would never adapt. Resistance to change is huge. Letís take this as an opportunity to learn something new! In fact weíd soon find itís so much easier than handling cash. Just yesterday I learnt how to credit the balance lying in my paytm to my bank account! Hey its damn easy and fun too! So, brighten up and adapt!

14. Fine, is it worth it?

I definitely think so! If none of these guys screw it up it definitely is worth all the trouble.
First, if you see I didn't speak much about counterfeit money because I donít know how they operate. But itís quite sensible to see the effect of this too. Violence in Kashmir has come to a standstill, clearly showing it was incited using cash from across the border! Kids in the valley have written their exams in peace! There was a whopping 94% turnout. Naxalites are nowhere to be seen. These are some major positives which are never discussed much in the media. In my opinion, the economic aspects will take time to show. It will take at least a year or two to show. But the effects are undeniably positive. We can in fact expect an increase in tax exemption limit next year. We can expect interest rates to decrease (its already happening), pushing down inflation and subsequently prices of most of the stuff we buy! A normal person like you and me can now actually afford to buy land! With the black component, out of the system the rates will become realistic and affordable to honest buyers who take loans and pay in cheque. Economic activity will pick up, adding more and better employment opportunities. Of course, itís not possible to eliminate corruption and black money totally. Someone who got cash from you will now ask you to pay him in kind. But it can be controlled effectively since everything is tracked.

15. Removing 500s and 1000s and introducing 2000s? isnít that beating the very logic behind which government started this?

This is an area I have my reservations. While I completely understand why a Rs. 2000 note was printed; I also feel if it is not phased out quickly once the market stabilizes weíll be back to square one. We read that 85% of the currency in circulation in the denomination of 500 and 1000. Removing them has created a vacuum for this 85% of the market liquidity. You canít print new 500s and 1000s without leaking the whole operation. And, starting to print after announcement would mean a logistical nightmare. Replacing them with 2000 notes makes sense and 500s can be printed after the announcement. But then if the Rs. 2,000 isnít phased out, corruption will be back no sooner than it left and itíll be back with a vengeance to earn back all that it lost! But I am hopeful they'll phase it out.

15. Looks like you are supporting this all out, clearly you must be a ďbhakthĒ.

No, I am definitely not a ďbhakthĒ and I definitely have quite a lot of reservations. Iíd have welcomed this had this been any other government. And I want to see a lot of follow up actions. As said earlier, the Rs. 2,000 note needs to be phased out as soon as the market stabilizes. I would like to see Rs. 100 as the highest denomination. There has to be quite a lot of follow up action to help us believe the governmentís intention is really honest. For eg, reform of election funding, lowering tax rates, swift improvement in public utility systems, ensuring minimal interaction with government officials to minimize corruption, transparent functioning of government agencies by promoting online compliance systems etcÖ. Without follow up action, definitely people would lose confidence.

I took time out to write this because I see quite a lot of distortion in the media and so much negative propaganda. Almost every media house is owned by either a political outfit or business barons, be it national or regional television. These are two of the worst affected sectors of this decision. Any sensible person would agree the so-called debates would hence be skewed! Itís so easy sway opinions of gullible people, especially who are on the edge. I see journalists showing images of people crying everywhere, never ending queues (without showing the date), people giving misinformation. Yesterday I saw a journalist asking a farmer, ďthe government says it has many more measures up its sleeve, what would you do if they increase your tax?Ē for which the farmer replies ďIsnít agriculture income exempt from tax?Ē and the journalist prods him ďyes as of now, but what if you are taxed because of this forced banking transaction on you?Ē. This is clearly motivated reporting, scaring people into thinking about something which isnít happening! Itís disheartening to see a section of the people trying to kill it before it takes shape. At the same time its heartening to see majority of our citizens taking this in the right spirit. Even with so much shouting, we don't see break-ins at banks and ATMs, etc.... The crowd is peaceful despite the best efforts of these propagandists. Whatever we are, Indians are still moralistic and sensible. Lets ensure the media and some vested interests doesn't change that.

We have been suffering all along. We have cribbed about the system all along. Now suddenly it looks like thereís a flickering chance for things to brighten up! And to make it a success, we donít have to do any hard labour. All we need to do is stop whining for a while! We can already see some sections trying to incite people into revolting against this. Even if we are against this whole thing, why must we add to the chaos by spreading panic? We gain nothing. And for those who want to give the change a chance, we cannot change the world, but hey, we can spend an hour at least sharing stuff we know on the internet and to people around us, right? So please educate the people you know! Tell them to support and give this a chance! And if someone near you doesnít know e-wallets or how to open a bank account, help them!

We are basically nice people. We've proved that time and again. The entire nation came together during Kargil war, Gujarat earthquakes, Chennai floods, etc... We didn't have an opinionated propagandist media during these times. We must remember to think for ourselves once again and decide what's right.

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Old 20th November 2016, 09:46   #1035
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Re: Government scraps Rs 500 and Rs 1000 notes!

@sawyer; My CA tells me that married ladies depositing up to 2L are covered, under the 'streedhan' clause and there will be no queries. This is accumulated savings from household expenses, exactly what you mention.
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