Demonetisation and its Aftermath

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Two variants of new Rs 500 note surface, RBI says printing defect due to rush

I guess these people gave the designing process to lowest price contractor trying to save money here and there. Never saw cost cutting on a high security item like a country's notes like this. lol.
This has become a huge waste of tax payers money. Govt stole minimum 15+ thousand from almost every family while killing the old notes and ended up losing entire country's productivity for almost a whole month. 4 lakhs jobs lost according to Indian Express and on tv some experts are saying economy might take around 6 months to recover. This govt is 100% penny wise pond foolish.
 
cellar_door said:
The reason I would discard it is because I dont think people in a large enough group are capable of keeping a secret like this. It would have leaked. So it seems unliklely.
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Exactly. Only a small number of people could be in the know.

I wouldnt count it out though. All our political parties are rotten to the core and they would happily sacrifice the convenience (and lives) of ordinary Indians in a heartbeat if it gets them close to the seat of power. Hell they have been doing that for decades now.
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They may have other means than just cash. IOU's don't need cash just an understanding.
 
Being.smart said:
I do work in a nationalized bank in Mumbai , and know the tit-bits of all black money hoarders how they are converting that cash using the bank channel @ 15-20% commission
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Of course they are. No one who has lakhs or crores in Black money is losing sleep or committing suicide over this. They can either afford to exchange it. Or lose it.

Its the poor who are dying in front of banks or committing suicide.
 
Lord Nemesis said:
https://www.washingtonpost.com/news...ust-made-a-big-mistake-with-its-currency-ban/
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Most free societies would rather let several criminals go free than convict an innocent man.

the definition of what is illegal or corrupt is open to debate given commercial practices that have prevailed in India for a long time.

it is petty fortunes, not the hugest and most problematic ones, that are being targeted.

Corruption will continue albeit with slightly different arrangements.

We were not enthusiastic previously about the idea of withdrawing existing notes from circulation because we judged the costs to exceed the benefits. The ongoing chaos in India and the resulting loss of trust in government fortify us in this judgment.
 
onlyravi said:
Smaller point first: Tatas are one of the biggest business house in India. So their internal problems affects the market and also creates an environment of uncertainty. Govt need to know if this will cause some adverse reactions like people losing their jobs, or putting a bad image of the company / country (as TATAs have business in other nations too), etc. Nothing serious but good that Govt is keeping a tab of the happenings.
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Govt isn't keeping tab, he is notifying the govt. That was the part i found odd. As if he has to talk to his bigger brother. What hapened at Tata was a hostile takeover, this happens in companies around the world. It will sort itself out. Tata is a god awful mess one of the analysts i was listening to said they have about 28 differnt units of which only two are profitable. The rest remain in place due to political largesse, shall we say. They are just dead weight. What was the need to own two airlines. When you have a lot of cash have to spend it somehow. Same story with malls. A vehicle to park excess cash.

Modi after the recent ban of rs500/1000 notes said that he will push for state funding of elections so that political parties do not have to depend on black money to fight election campaigns.
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Presently the legal limit is 30 lakhs or thereabouts but to get into office is 2-3 crores. To hire 40 people and a minivan and go campaigning. The point i'm making is the present limits are not realistic so extra is needed. A lot extra.

I would like to know how the state is going to fill in the difference because it didn't just get cheaper by magic.

More taxes ?

How to make elections cheaper. The figure i see thrown about for the bill of the national elections two years ago is 30,000 crores. It isn't cheap. On top of that we have state elections.

Democracy costs, like security, rights, justice and freedom.

I have made this argument ever since AAP started. This is what they would have done. But the BJP pre-empted them. Should AAP be happy because this is what their lot wanted or sad because their biggest argument ie fighting corruption just got taken away.
 
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Looks like the BJP govt has started to realize that things are really bad and going to get even uglier in coming months and that they may loose their vote banks. No amount their upper middle class elitist bhakts trivializing the deaths and suffering of others as "minor inconvenience" is going to help them in the long run.

So, now they are making statements that demonetization was done at the behest of RBI in an attempt to try to shift the blame on to them.

RBI on the other hand says that the govt insisted on going through with it. They even say that prioritizing the printing the Rs 2000 notes was done by govt even though they tried to convince them that common people need Rs 100 and 500 notes.
 
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The cost of demonetization is pegged at over 1.3 Lac crores and counting. Long term impact can be much uglier. But, overall this has had no positive impact on black money or fake currency problems at all.

The black money in cash form is pegged to be not even 4~5%. Politicians never had any problem in the first place and small scale hoarders are able to convert their reserves without much difficulty. In the process, even more black money enterprises have started running.

Due to the rushed implementation, no new security measures could be introduced and fake notes are already doing the rounds. gangs with stashes of fake notes caught in Hyderabad and else where. Even worse, there are a lot of defective notes that got printed due to the rushing which resulted in even more wastage of tax payers money. Not sure if these kind of notes would be exchanged (given the scarcity of currency) or people would have to take the loss for the "greater good".

Lots of people still have no access to usable cash even after two weeks and either going without necessities or those with digital wallets and credit cards spending lot more than they need to. I personally have had no luck getting any money since last time I went to the airport and the Rs 2000 notes are still just as worthless as the old notes. People at work are forced to take leave to stand in queues before banks.
 
Look at Canada's notes for security features. Even those notes get counterfeited although badly. Compared to Canada, these new notes don't look like they have any security features on them.

I wonder how long before the new 2000 notes are trashed. As it is, they are completely useless now. A 10 rupee coin has more value than that stupid 2000 rupee note imo.
 
seshu said:
* Goa is set to become first cashless state
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Cash transactions will still be allowed. This will take time to catch on. No vendor will dare to refuse a cash transaction if it means losing the sale. it's silly to say no worry of pickpockets because now they will just grab your phone. Then what will you do. Debit cards ? remember that internal hack that resulted in 19 banks having to cancel several lakhs of cards to protect their customers. Nobody imagined using another banks atm could mean someone stealing their money.

I don't support a cashless society as it just increases govt surveillance. Same applies to aadhar.

What people should understand is what is the reason for this cashless trope they keep coming up with. It's mostly the statist economists that advocate it. It allows govts more freedom to play with interest rates. Fredom here is a zero sum game, they get it at your expense.They can drop interest rates to zero and even negative. negative means you are effectively paying the bank to keep your money. Therefore you have zero control of your money in such a situation. You will certainly start hoarding cash in a situation where interest rates go below zero. These are extreme measures no doubt but allow the govt more control in times of stress or external conditions that have adverse effects on the economy.

Govts always want lower interest rates as it reduces the cost of capital. But this leads to inflation as they print moeny as well. Then its the RBI's job to clean up the mess. They are not miracle workers so there is always this tension between FM & RBI governor. FM pleading for lower rates and RBI either acknowledging or telling govt to get lost. If they pick a doormat he will rubber stamp anything they want. if he has a backbone the govt does not get its way. Wonder if Raghu would have agreed with this note ban and switch in the first place ;)

Ask yourselves how many advanced economies around the world where there is already a habit of using plastic are cashless. That our govt and not only this govt but any govt always wants more control which means curtailing liberties. privacy is a liberty. Not only in this country but any country. They use a crisis as a pretext to cut liberties in the name if whatever terrorism, corruption etc. Its a power grab nothing more or less.

The people have to push back otherwise worse will follow. PIL's are already piling up, lets see what the result will be.
 
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blr_p said:
What people should understand is what is the reason for this cashless trope they keep coming up with. It's mostly the statist economists that advocate it. It allows govts more freedom to play with interest rates. Fredom here is a zero sum game, they get it at your expense.They can drop interest rates to zero and even negative. negative means you are effectively paying the bank to keep your money.
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Plus going paperless means the Govt can keep a tab on high value spenders electronically. It will also allow them to debit banks directly for unpaid tax revenues if they feel so. I wonder if benami funds will go digital. Like digital lockers away from prying eyes.
 
seshu said:
Urjit Patel breaks silence, insists RBI taking necessary actions to 'ease pain of citizens' !
this pain is never ever forgettable ..
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This quote below is from the website.
According to him, usage of debit cards will make transactions cheaper and easier.
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How will it make transactions cheaper? All the govt websites charge 2- 2.5% extra for using debit or credit cards for online payments. Worst is the railways. They charge extra even for digital wallet payments from their own site. The govt is the biggest hurdle to digital payments here. Going digital adds some sort of transaction charges in between somewhere. It may or may not be passed on to the customer. But compared to paper, digital is not cheaper in any way. Its convenient if everything goes right. Not so convenient if something goes wrong and you get a fear in your heart that you will lose money while frantically calling customer care of bank, cc company etc for a week or two.
 
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