[avira_tk]

Originally Posted by Samurai

You are actually trying to tell an entrepreneur about unfairness of taxation? That is no excuse for cheating.

Can you explain why he should visit the bank at all?

Obviously, you don't fall into the common category that is affected, explains your zeal, that's usually the trait of someone with no skin in the game, but obviously someone else having a hard time makes you feel good.

Why don't you answer the question, instead of asking another one? The answer is to withdraw his money, not to alter the managers suit.

Originally Posted by Samurai

Especially builders will drop price, because of rising inventory.

It was impossible until now. It has become very hard to pay bribe because of limited cash. So related departments are very concerned now.

The graph is just theoretical economics with perfect competition, still fresh in my memory. Perfect competition doesn't exist in patronage industries that are highly regulated. The demand curve will not shift because the seller is under no pressure to reduce rates, why, because the black component has covered all the costs. Idiots waiting for the prices to crash are in for a surpise, the only crash in real estate comes in areas that are illegal to begin with, the rest will hold up.

Bribes at the registration process are still high and to top it off, builders are being asked to change old money held by the boss man. I assume you read the news, vast quantities of cash are already back in the system, just not in ATMs and bank branches. People who front for the political class have no trouble accessing what is needed to smoothen regulations. Those departments will squeeze what they usually do, hell or high water, normal people are affected, and its not like it bothers you.

[Samurai]

Originally Posted by avira_tk

Obviously, you don't fall into the common category that is affected, explains your zeal, that's usually the trait of someone with no skin in the game, but obviously someone else having a hard time makes you feel good.

Lots of assumptions here. I pay all my employees via bank account. Yes, even cleaners and office boys. Nobody has complained about it ever.

Do you know the real cost of paying low level workers with cash? They will be undocumented. Which means they won't get minimum wage, which is revised every year in India. And they won't get PF, gratuity, and ESI benefits. I know companies that keep most of their staff off the payroll for this reason. Pay cash, skip benefits. If labour department catches them, they bribe them off. Most poor workers don't know what they are losing by taking cash.

Originally Posted by avira_tk

The graph is just theoretical economics with perfect competition, still fresh in my memory.

Theoretical economics? Yes, I hear this word from people who studied economics, but never got to use it. But as entrepreneur, one has to use it on a regular basis. That's when real understanding happens. I have explained the myth of theoretical economics before in the economics thread.

Originally Posted by avira_tk

I assume you read the news, vast quantities of cash are already back in the system, just not in ATMs and bank branches.

What is vast quantity? What is the percentage compared to bank channel? These days every news is sensational. Last month they claimed terrorists are already funded with 2K notes. Turns out they just had 2 notes.

[androdev]

Originally Posted by Samurai

Like most people, you are only looking at short term effects. One doesn't get 45K by demanding it. One needs look at the demand curve too.

I am not against demonetisation for what's it's worth but it is not a game changer by any means. At the most people will go to Big Bazar instead of push carts to buy vegetables. I am also not looking at short term effects (for instance, I have not complained about people standing in queue and losing daily wages, etc. precisely because they are short term consequences).

But like a force of gravity, the "seller-buyer" incentive to do black money transactions is as strong as ever. The nexus between corrupt business, babus, politicians is intact.

Even if the cash is cut down, hitherto legit-cash transactions will move to digital format leaving enough cash for the black economy to flourish.

It reminds me so much of the book "Animal Farm"

[ecenandu]

Originally Posted by hybridpetrol

.

Attitude change will happen gradually and with right steps, it will happen sooner. If all the loopholes to bribe are plugged, then people must follow the rules to get things done. If people are asked to follow rules for a year or two, they get used to it, and they will see there is no point in bribing someone to get the usual things done.

Can we plug all the loopholes, that easily? In order to do that we have to bring in more restrictions and thereby making the process a lot tougher. So, another way is to reduce restrictions, less bureaucratic overheads, more transparent system etc.

Similarly, those who have been living off the bribes would have already found themselves in jail or found something better to do for their earnings.
We should realize that we are at a tipping point in the history where very drastic things can start to unfold for a better tomorrow.

Absolutely, the deterrent should be severe enough that people won't take more bribe.

Are you saying this, demonetization move, is the tipping point in the history?

Everyone can take care of their lives. Rich or poor.

Of course, they can. As a citizen you or me can take that stand. But I don't think a government can take such a stand. One of the objective of the government is to, take care of the vulnerable section of the society.

[rrsteer]

If I may add to the discussion here, please dont think of demonitization as something coming from left field. It was a matter of time before such a move had to be made. Ofcourse the govt deserves credit and I have the benefit of hindsight to make this statement. Do check RBIs balance sheet to see how there are excess liabilities present. The situation would have become almost untenable in future. I also feel it is a planned move or why else the push to open jan dhan accounts for the last 2 years which were drawing so much criticism.

The government does desire a country wide behavioral change with regards to how we approach cash and do transactions. As this behavioral change will help prevent such a situation again. But given our population and the massive social inequities, this is difficult to pull off. And i think this is where the biggest challenge lies.

And finally our banking system is a mess as is being brought to the open with daily news of how huge notes were siphoned off. Had banks played the role expected of them, the pain accompanying this move would have been lot lesser.

PS: Do search for a news item regarding a UK based manufacturer of currency paper sometime around 2010 and try to connect the dots with this move.

[Guite]

Originally Posted by rrsteer

And finally our banking system is a mess as is being brought to the open with daily news of how huge notes were siphoned off. Had banks played the role expected of them, the pain accompanying this move would have been lot lesser.

It is tragic that many many people at the bottom of the social strata cannot withdraw 2000 rupees a day but few people at the top can gain lakhs and crores of new currency a day. Our system is totally flawed. It need thorough cleanup. But will it ever happen?

[ajmat]

Originally Posted by rrsteer

PS: Do search for a news item regarding a UK based manufacturer of currency paper sometime around 2010 and try to connect the dots with this move.

The company is called De La Rue

[nowwhat?]

Originally Posted by Guite

It is tragic that many many people at the bottom of the social strata cannot withdraw 2000 rupees a day but few people at the top can gain lakhs and crores of new currency a day. Our system is totally flawed. It need thorough cleanup. But will it ever happen?

By the way, ₹2,000 is the ATM limit, one can withdraw up to ₹24,000 per week from the bank. I doubt people at the bottom of the social strata have any need to withdraw so much unless there is a wedding or hospitalization.

Many people are making sweeping generalizations on this thread and shedding tears for the poor, but in my own personal experience the ones who should be suffering the most, i.e. my relatives in the rural hinterland, are the ones who are the most nonchalant about it. As I have said before on this thread, I sense a big disconnect between those who claim to be going through pains and posting here versus those who are going on with their lives as they always did albeit with a few changes.

Personally, I think I have been through more pain than my rural folk. It took me some effort to figure out PayTM, but now I use it pay with that for everything from milk to veggies. When I first received a ₹2,000 note I didn't know what to do with it, but people are accepting it and in fact I got change of ₹900 for it from a restaurant recently all in ₹10 notes.

[sgiitk]

Originally Posted by nakul0888

Guys, I just read this article that takes a different and far more sinister view on the note ban.

http://schiffgold.com/commentaries/c...pha-predicted/

What do you think? Is India headed for a crash?

Looks more of whumf and self marketing to me. I will treat it as just another input, nothing more. This is the time for the doomsdayers to have a field day. Yesterday, I learnt that queues in Gwalior are now vanished, and banks are dishing out 24k per week. My wife saw some stuff on Rajat Sharma's channel (hard core opponent of the demonetization) that Nitish forced banks to work yesterday, and near normal working. My s-i-l in Kolkata also reported near normal but did add that things are still bad in the hinterland.

So what I will say is that things seem to be coming back to normal. imho the crunch was the non-availability of the ₹500 note. As things normalize a lot of panic withdrawals will also settle down.

[ptushar]

Originally Posted by Guite

It is tragic that many many people at the bottom of the social strata cannot withdraw 2000 rupees a day but few people at the top can gain lakhs and crores of new currency a day. Our system is totally flawed. It need thorough cleanup. But will it ever happen?

Sure. It can happen. But when it happens, the people who will suffer the most will be those who have crores stashed away. They will be rich and influential people. These people will have control over media houses and have access to mass communications. They will start showing poor people who are suffering. The will try and build a consensus that India is suffering. They will buy their way and try to sway public opinion. Many more people who are in the middle strata will get influenced and start singing the same tune as these rich and influential. They will be part of the consensus that these rich and influential people always wanted. Then we will be back to where we are today.

Originally Posted by nowwhat?

I sense a big disconnect between those who claim to be going through pains and posting here versus those who are going on with their lives as they always did albeit with a few changes.

Absolutely. The real people who are suffering are those who have lost crores. Not those who need to stand in a line. Think about it for a minute:

• A rich tax-evading businessman, a rich corrupt politician or a bureaucrat who had crores stashed away under their beds.
• An honest middle class tax-paying citizen who, at max, had to learn a few new technologies and probably stand in a queue for a few days
• A lower class below tax paying bracket worker who now needs to stand in a queue for longer and probably now needs to open a bank account and start learning how to operate the banking system

Who, in your view, has suffered the most? It's a no brainer, isn't it? But what is the media showing us? They are showing us the poor and middle class people standing in a queue. They are showing us people who were "forced to open bank accounts". Seriously? Are they showing us the rich and corrupt who are silently crying and cursing their luck?

In my view, change is difficult. Here's another analogy. When you need to get a bypass surgery done, the doctor has to make you unconscious, cut open your chest, break a few ribs, make you go through severe blood loss. Basically put your life at risk. So when the surgery is done, and the doctor comes out and announces that surgery went fine but there was heavy blood loss, the wound will take a few months to heal, the lifestyle of the person will be severely disrupted for a few months, the family will need to take more care over these months and the expenses will drastically increase over these months so the family will need to let go of a few needs.

Now again think for a moment:

• You start cursing the doctor for the 'pain and suffering' that the patient and the family have to go through. You scream at the doctor and his/her team for the blood loss, the cut on the chest, the broken ribs, the unconscious patient, the excess expenses and the changed lifestyle.
• You thank the doctor for the effort. You make notes of the lifestyle changes and start planning your life around them. You ask the doctor for any other care & precautions to be taken. You look at the future with hope

What do you do?

[west]

Originally Posted by sgiitk

Looks more of whumf and self marketing to me. I will treat it as just another input, nothing more. This is the time for the doomsdayers to have a field day. Yesterday, I learnt that queues in Gwalior are now vanished, and banks are dishing out 24k per week. My wife saw some stuff on Rajat Sharma's channel (hard core opponent of the demonetization) that Nitish forced banks to work yesterday, and near normal working. My s-i-l in Kolkata also reported near normal but did add that things are still bad in the hinterland.

So what I will say is that things seem to be coming back to normal. imho the crunch was the non-availability of the ₹500 note. As things normalize a lot of panic withdrawals will also settle down.

Sorry to say but we are feeling the cash crunch this month. I need to go to the bank at 630am standing in line till 10 am to get coupon for the day which will again take 4-5 hrs ti get only 4000 inr that too 2000 notes. I never felt this last month. I do 98% transactions by card. This is in hyderabad posh area, and at some mass areas its like fist fighting for coupons

[sachinayak]

Originally Posted by sgiitk

So what I will say is that things seem to be coming back to normal. imho the crunch was the non-availability of the ₹500 note. As things normalize a lot of panic withdrawals will also settle down.

This may be true for specific places, but at least in Bangalore (or some parts), there are still long queues for cash withdrawal.

Before December 1, withdrawing money was super easy if you were okay with 2000 Rs notes. Now there are long queues for that too. At the ATM in my office, whenever it is operational, the queue runs over 50 people whenever I have seen it.

Hopefully once the 500 Rs notes get into the market, things should ease out, but right now the situation is different in different places.

[poloman]

There is something going on out there. I am shocked to see the queues before banks today as long as that we saw in first weeks of demonetization. The Govt claims they have pumped back more then 30% of cash back to the system. Where has this cash gone? Why are the queues not subsiding?
I suspect two reasons
People hoarding cash anticipating shortage and panic fanned by media
Money laundering happening at smaller scales using common people and 24000x4 withdrawal limits. If this is the case queue will magically vanish after Dec31.

[nowwhat?]

Originally Posted by ptushar

In my view, change is difficult. Here's another analogy. When you need to get a bypass surgery done, the doctor has to make you unconscious, cut open your chest, break a few ribs, make you go through severe blood loss. Basically put your life at risk. So when the surgery is done, and the doctor comes out and announces that surgery went fine but there was heavy blood loss, the wound will take a few months to heal, the lifestyle of the person will be severely disrupted for a few months, the family will need to take more care over these months and the expenses will drastically increase over these months so the family will need to let go of a few needs.

Now again think for a moment:

• You start cursing the doctor for the 'pain and suffering' that the patient and the family have to go through. You scream at the doctor and his/her team for the blood loss, the cut on the chest, the broken ribs, the unconscious patient, the excess expenses and the changed lifestyle.
• You thank the doctor for the effort. You make notes of the lifestyle changes and start planning your life around them. You ask the doctor for any other care & precautions to be taken. You look at the future with hope

What do you do?

How did you know? I actually had a bypass surgery last year .

Originally Posted by ptushar

Think about it for a minute:

• A rich tax-evading businessman, a rich corrupt politician or a bureaucrat who had crores stashed away under their beds.
• An honest middle class tax-paying citizen who, at max, had to learn a few new technologies and probably stand in a queue for a few days
• A lower class below tax paying bracket worker who now needs to stand in a queue for longer and probably now needs to open a bank account and start learning how to operate the banking system

Who, in your view, has suffered the most?

Personally I am very curious to see the results of this experiment, but I think we will only get the correct picture by next year at the earliest. A lot will depend on how the economy responds, how much resolve the government shows to go after black money now that there is a money trail they can follow, whether Indians make the shift to cashless, whether UPI will blossom instead of being stymied by the banks who own it, whether RuPay terminals will proliferate in rural areas and so on.

[sgiitk]

Originally Posted by poloman

There is something going on out there. I am shocked to see the queues before banks today as long as that we saw in first weeks of demonetization. The Govt claims they have pumped back more then 30% of cash back to the system. Where has this cash gone? Why are the queues not subsiding?
I suspect two reasons
People hoarding cash anticipating shortage and panic fanned by media
Money laundering happening at smaller scales using common people and 24000x4 withdrawal limits. If this is the case queue will magically vanish after Dec31.

As for the media, it is highly polarized and showing what it wants you to think.

As per personal information, no queues in Gwalior, banks are dishing out 24k per week, and the ATMs seldom have more than two or three people. Kolkata is also more or less normal, but this is not true of the hinterland.

It seems that Nitish ordered banks to work on Monday, and there were hardly any rush at the ATMs or the counters. This incidentally, was reported by a die hard demonetization opponent, Rajat Sharma.

So things are slowly coming under control. As for people drawing more, many of us (incl yours truly) who had some cash in the house and deposited it after 8/11 will like to restore at least some of it.