[poloman]

Originally Posted by vibbs

Did anyone try rubbing the new note with a piece of cotton? The pink colour comes off in the cotton.

I tried this with my colleague today in the office after two of my friends reported this.

Now this is getting ridiculous! Lots of such videos available.

https://www.youtube.com/watch?v=-gnvPu3hTpU

[bblost]

Originally Posted by Sawyer

Honest folk really have nothing to lose sleep over.

This is the most important point, which many fail to understand.

If you have been gainfully employed in a salaried position, then the Govt already knows everything about you.
Your past Form-16's already tell the IT department what is your financial standing.
Most of us would have very little cash sitting idle at home.

Almost all of us have credit cards.

I have spent a grand total of 150 rupees in cash since this news broke. I still have another 200 or so in my wallet.

In terms of old demonetized notes, my family has barely 3000 or 4000.

We don't depend on this money for our day to day expenses.

So I have taken steps that I will NOT go to deposit or withdraw anything until the crowds subside. Let the guys who really need this get done.

I request everyone to avoid going to the banks or ATM's.

[vivek95]

Did anyone from Bombay or Delhi get the new 500 notes from ATM ?? Apparently, they have been made available only in these two cities along with Bhopal.

[binand]

Originally Posted by hemanth.anand

Too many people are reading too much into these notes IMO.

You haven't seen half of it. Take a look at this rant:

http://www.firstpost.com/india/demon...i-3103126.html

[blacksport]

They say the proof of the pudding is in the eating. Now that this exercise is underway, there is no turning back. Lets patiently wait till all the dust has settled down and then assess the damage. We would only then able to find out whether the income justifies the cost incurred. Whether the money gained in taxes would be able to supplant the money lost due to reduced economic activity.

And also how many fans our PM will acquire and how many he will lose. Who knows, we might even find out whether running a govt is tougher than bringing home a crocodile.

[Raccoon]

Originally Posted by hybridpetrol

This also is a chance that will force the system to move towards becoming more paperless. It is true that, in rural India, and even in many suburban areas of metros and major cities, they accept only cash.
I am not talking about vegetable markets here. Even many medical shops which usually sell in hundreds and thousands do not have the swiping machines. Don't you think it is time to grow and start accepting cards as well? When those who have cards, can use cards everywhere, there will be less need for currency notes.
There can be only interpretation now for not having such swiping machine, even when you are aware that the notes circulation is reduced and that you can do more business when you have a PoS machine: I do not want to disclose my true income to the Government.
Hope, soon we have a situation where we can swipe everywhere. At least then, only those who do not have cards or do not know how to use it are the only ones who needs cash.

You have missed out on the most important fact, and it is in fact being ignored by almost everyone everywhere. Maybe its because of ignorance about how card business works? Banks charge a commission for swiping cards. I believe there is a charge for the POS machine too. High margin businesses usually take the hit of the few customers that swipe cards. Low margin ones cant. They will mostly pass on the burden to the customer up front. Even those businesses that are currently taking on the burden will increase costs/reduce discounts if everyone starts swiping. In effect this will be like a new burden on consumers already bearing 50 odd taxes. So why is the government wanting to force cards down everyone's throat? To fatten the bankers? Possible vested interests at work here? Or maybe even paving the way to a future where bankers can cartelize like the telecoms industry and extract higher margins? Point is in a free market/country one should have a right choices and options. These also keep things in check.

It is surprising to see most people supporting demoetization without critical thought. Things are seldom what they seem to be. Theres a lot more I could add, but for now this is one perspective:

http://www.jantakareporter.com/india...isation/75165/

I would add, has one of the culprits been brought to book? Any of the defaulters? Anybody who was party to the loot, including those who passed the loans, etc? No! Instead those who dont even have a clear idea about what exactly black money is, like the lower and lowest end of the populace is bearing the punishment in ways that more privileged people here reading this can realize.

[heavenlybull]

Originally Posted by Raccoon

It is surprising to see most people supporting demoetization without critical thought. Things are seldom what they seem to be. Theres a lot more I could add, but for now this is one perspective:

http://www.jantakareporter.com/india...isation/75165/

Please read some of the comments made by many people in your quoted article, where they explain the flaws in that article. I doubt the writer has any understanding of economics and is mixing bad loans issue with black money thats circulating in India.

[binand]

Originally Posted by Raccoon

You have missed out on the most important fact, and it is in fact being ignored by almost everyone everywhere. Maybe its because of ignorance about how card business works? Banks charge a commission for swiping cards.

No, I expect this point was also considered and factored into the calculations. It seems you are missing an equally important fact; that handling cash also has an associated cost that someone has to bear. Let us start with the cash printing presses, handling facilities maintained by RBI & various banks, cash counting machines, cost of storage and transport of cash, transactional costs and last but not the least - cost of securing cash. Then there are risks of dealing in cash - risk of cash pilferage, risk of theft and risk of counterfeit cash.

And anyway the government has asked banks to waive these charges till December 31: http://www.business-standard.com/art...1400255_1.html

Originally Posted by Raccoon

So why is the government wanting to force cards down everyone's throat? To fatten the bankers? Possible vested interests at work here?

With this argument, almost every decision any government takes benefits some groups. That can't be an argument. If there is evidence that bankers have influenced the policy decision let us bring that out.

Originally Posted by Raccoon

Point is in a free market/country one should have a right choices and options. These also keep things in check.

Don't think you are applying the definition of free market/country correctly.

Originally Posted by Raccoon

but for now this is one perspective: http://www.jantakareporter.com/india...isation/75165/

This article has been making the rounds in WhatsApp. The first question I asked is who is this Farhan Rahman? This is not an ad hominem - why should his opinion matter to me? My biggest problem is the list of 10 companies he has listed, but are those NPAs to the banks? Are those businessmen not paying back their loans? If they aren't, let the author state it clearly. If they are, then it is nudge-nudge-wink-wink journalism.

[Raccoon]

Originally Posted by heavenlybull

Please read some of the comments made by many people in your quoted article, where they explain the flaws in that article. I doubt the writer has any understanding of economics and is mixing bad loans issue with black money thats circulating in India.

I haven't read most of the comments. Maybe I'll do that in a while. Meanwhile. hows demonetization anything but a very temporary solution to black money? Firstly its reported that just about 5% is held as cash. To catch roughly 5% (that too temporarily) you are affecting 100% of everything. Black money isn't something static. It will regenerate in different ways/forms. That much is almost certain.

Secondly, can anybody guarantee that new notes will not be counterfeited? Its almost certain that will also happen.

Thirdly, many have claimed that the move has already put a halt to myriad illegal activities. But have conveniently forgotten that a whole range of perfectly legal activities have also ground to a halt. You have thrown the baby out with the bathwater and claim to have solved the problem. How ridiculous is that? As legal activities normalize, so will the illegal ones.

Lastly, why is blackmoney being seen as... well, so black? Is black money necessarily harmful for the economy? For society? Not really. Its only harmful for the government in that it reduces its looting capability. And the loot is more often than not misused. Else we wouldn't be paying so many taxes and getting so little in return. What we were promised by this government is minimum government, maximum governance. Has that happened? No. In fact opposite has happened. This so called black money can be as much contributive to crating more wealth as any so called white money, as long as it goes back into circulation.

[SilentEngine]

Originally Posted by Raccoon

Lastly, why is blackmoney being seen as... well, so black? Is black money necessarily harmful for the economy? For society? Not really. Its only harmful for the government in that it reduces its looting capability. And the loot is more often than not misused. Else we wouldn't be paying so many taxes and getting so little in return.

How exactly is black money beneficial to anyone? We are not getting much in return for our taxes exactly for the reason that lot of people didn't pay their taxes - which is how black money got created in the first place.

[SaNdY_AR]

Another angle....

May be the banks goofed up?

http://www.ndtv.com/india-news/stock...-lateststories

[Raccoon]

Originally Posted by binand

No, I expect this point was also considered and factored into the calculations. It seems you are missing an equally important fact; that handling cash also has an associated cost that someone has to bear. Let us start with the cash printing presses, handling facilities maintained by RBI & various banks, cash counting machines, cost of storage and transport of cash, transactional costs and last but not the least - cost of securing cash. Then there are risks of dealing in cash - risk of cash pilferage, risk of theft and risk of counterfeit cash.

And anyway the government has asked banks to waive these charges till December 31: http://www.business-standard.com/art...1400255_1.html



With this argument, almost every decision any government takes benefits some groups. That can't be an argument. If there is evidence that bankers have influenced the policy decision let us bring that out.



Don't think you are applying the definition of free market/country correctly.



This article has been making the rounds in WhatsApp. The first question I asked is who is this Farhan Rahman? This is not an ad hominem - why should his opinion matter to me? My biggest problem is the list of 10 companies he has listed, but are those NPAs to the banks? Are those businessmen not paying back their loans? If they aren't, let the author state it clearly. If they are, then it is nudge-nudge-wink-wink journalism.

I kind of saw that coming. I know dealing in currency notes has its costs somewhere. However, from a consumers point of view, paying in currency more often than not carries no additional cost. For eg., go and buy say a laptop or a mobile in a physical shop. You will be asked to cough up extra charges if you pay by card. Cash payment may in fact fetch further discount. I know there are more factors here, and the argument can go on and I am not saying cash has no negatives, but what I'm saying is customer and seller should have a choice and options. You shouldn't be able to implement something at gunpoint. True there are risks of dealing in cash, but that is for the seller and buyer to weigh. You shouldn't get to decide for them.

As for the article, why is it all important who the author is? It is a known fact that banks are in bad shape. Or is that also in dispute? I admit I cannot verify all the facts in it, but broadly it makes a pretty valid point IMO.

At the risk of being presumptive, and without elaborating further on the other points, it seems you already have a pre decided stance about it, rather than one of inquiry/reason. Its possible that the stance has come thru reasoning. If that is so, I would certainly like to hear about it. I still haven't found anybody who can convincingly reply to the most important points mentioned earlier as to the temporal effect of flushing out black money vis-a-vis the loss of production/business/commerce, which is permanent and to whether the other claimed benefits like halting of illegal activities, counterfeit notes. Are you saying all these will just disappear forever, or even for an appreciable period?

[binand]

Originally Posted by Raccoon

Lastly, why is blackmoney being seen as... well, so black? Is black money necessarily harmful for the economy? For society? Not really. Its only harmful for the government in that it reduces its looting capability. And the loot is more often than not misused. Else we wouldn't be paying so many taxes and getting so little in return.

On the contrary, I'd say black money is the result of large-scale loot often with government connivance.

And please take a look at the list of countries ordered by tax-to-gdp ratio available on Wikipedia - India is nowhere as bad as you make it out to be (72 out of 179, with approx. 18% as the ratio).

Originally Posted by Raccoon

I kind of saw that coming. I know dealing in currency notes has its costs somewhere. However, from a consumers point of view, paying in currency more often than not carries no additional cost.

But that is a parochial view. And if "cash payment fetches further discount", we can mostly conclude that tax evasion is happening.

Originally Posted by Raccoon

As for the article, why is it all important who the author is? It is a known fact that banks are in bad shape. Or is that also in dispute? I admit I cannot verify all the facts in it, but broadly it makes a pretty valid point IMO.

Yes, because the Internet is full of wannabe experts. The author's pedigree is important because the article is basically a non sequitur. Yes, it is possible that recapitalization of banks might have been a factor in both the how and the when of this decision. But is that alone sufficient to call it an eyewash? The biggest giveaway for me, as I mentioned in the previous post, is the list of 10 people who are presented as though they are cheating banks. We should remember that banks have to lend money, and as long as borrowers are repaying on schedule it is all business as usual. The article offers nothing to suggest that it is not the case.

Originally Posted by Raccoon

I still haven't found anybody who can convincingly reply to the most important points mentioned earlier as to the temporal effect of flushing out black money vis-a-vis the loss of production/business/commerce

One place you could start is here:

https://www.youtube.com/watch?v=W-Bjw_SFNdM

[carwatcher]

I really can't understand all the fuss about the future generation of cash, black money, etc. etc.

Does that mean we all were happy with the status quo.

I have a strong feeling that if people feel the pain of converting the cash standing in queues etc would also won't take the future corruption lying down and the Govt would have to give the explanation for inaction on complaints against the corrupt bureaucrats.

This 3% paying taxes is not very significant as the poor or rich all pay equal amount of indirect taxes which really make the economy run and which is the norm in each country.

I also don't really believe that say even 5% of our public has income more than the exemption limits in income tax.

[Sawyer]

Originally Posted by Raccoon

Is black money necessarily harmful for the economy? For society? Not really. Its only harmful for the government in that it reduces its looting capability. And the loot is more often than not misused. Else we wouldn't be paying so many taxes and getting so little in return.

Some of these are good and valid questions - never mind that they may not be popular among many here. It is true that people will be more honest about taxes if they see a fair return in exchange from the government. That means drastically less parasitic government employees, their visible salary increases via pay commissions, their perquisites, their demanding of bribes in black money, and all made worse by their abysmally poor performance in delivering quality infrastructure. That is why people see tax collection by the government as looting, and justifiably so.

And if this temporary solution is to become a long lasting one, these issues have to be addressed too. And some others that address the root causes.

And the biggest root cause of all is the complete lack of civic sense in far too many Indians; and my experience is that there is more civic sense in the poor of the land. Talking patriotism is easy, practicing civic sense is not. Just see the traffic chaos in every Indian city to see just one example.

There is no magic bullet; not demonetisation, nor anything else. There is a lot to be done, a journey of a thousand miles. But that does not mean that the first step should not be taken; the only concern arising from past experience is that the next steps don't get taken. And only time can prove these concerns to be wrong.

Originally Posted by SilentEngine

We are not getting much in return for our taxes exactly for the reason that lot of people didn't pay their taxes - which is how black money got created in the first place.

Are you sure this is a valid line of reasoning or are you mixing cause and effect? We are not getting a return for whatever taxes we pay because there is too much leakage of what we do in fact pay. Address those leakages, and it is the equivalent of a lot more people paying their fair share of taxes by having what is paid used for useful activity and not wasted as explained in response to the earlier quote. Address that, and one reason why people are unwilling to pay their fair share is eliminated, so that less money is then left as black money. And address the whole subject of bribery, and the need for black money reduces even further.

PS: Just after posting the above, I found this:
http://www.ndtv.com/opinion/10-reaso...m=home-opinion

Very eye opening questions that should not be casually dismissed. Including the one that hasn't been asked I think - will we overnight call a halt on every bribe we pay? Because it takes two for this evil to happen.

Don't blame the politicians - we are ALL of us responsible for the state the country is in. The article misses out on saying this.