India scraps its two largest rupee notes in shocking anti-corruption move

As we had often come back to discussing economic benefits/impact of sports I thought it was about time for an economic discussion forum.
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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby Atithee » Thu Dec 01, 2016 6:53 am

Prasen, all I, as an individual, would say is that I subscribe to the more economically corrupt definition as far as government is concerned. That's is, I'll accept a morally corrupt leader more readily than you, if they are not economically corrupt. This is what perhaps Jay is also saying. And, by no means, I hold Modi 100% responsible for the Gujarat riots. You know as well as any other Indian that riots of this type in India have far too many factors. But, I am not absolving Modi completely either. I just don't know enough.

As for your assertion that rewarding such leaders beget more, history doesn't seem so. There hasn't been another Stalin, Amin, Hitler, pol pot (or whatever it was). The closest we have is Kim Jong Un and he isn't relevant a lot. So, I think there is little to no chance of your scenario coming true.

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby prashanthm » Thu Dec 01, 2016 3:36 pm

prasen9 wrote:In my contact with India, I have seen very small, incremental progress as I have seen over decades. The rate may be slightly higher or lower, but, that is not worth it to me to deal with corrupt people like Modi.


I know you keep saying that there has been little progress... Going by what you said earlier, you should either have no hope of progress from his government or setting a high bar and wanting him to fail...

Is he doing really bad compared to the previous government?
For a lot of average indians, that is what matters. Year-over-Year and Term-over-Term.

I will gladly take it if he is doing not as bad as the previous government, although I hope that he does much better..... I would take this guy instead of the mediocre G's at the helm...

No comments on the Godra incident - I feel like I don't have enough info/facts here to support anyone...

You can't have it all in India - Politicians have their own problems - Look at NCB. What was the return he got from the AP voters after he made Hyd the IT Hub.... He didn't think through the whole thing and he came down pretty badly....

:rant:
Note: You know very well that an argument should have both sides... Calling a positive side of the coin 'devotees' or 'worshippers' is probably not the right thing to do with members of this forum. I don't see any of the forum members going 'ga ga' about Modi or laying their lives at his feet..... :D

So, my appeal to everyone on the forum is to let this be a healthy argument/debate rather than gunning for bad blood... :rant:

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby jayakris » Thu Dec 01, 2016 3:42 pm

Here is an interesting article from IANS (agency) in the Hindustan Times today - What black money? Govt may be in for shock after demonetisation

Something seems wrong in the numbers they are showing. 15.5 trillion of 1000 and 500 notes were in circulation. Apparently 8.5 has come back by this Tuesday. They say that what RBI had as CRR (cash that the banks are required to keep with RBI) was 4 trillion on Nov 8, and that what the banks were keeping as cash was about 0.7 trillion (an estimate). Out of the 5.2 trillion that RBI and the banks had on Nov 8th, at least 4.5 would be in high denomination bills, which means 13 trillion is already accounted for. At least a couple of trillion should be deposited during this month, the article estimates. That means, almost no unaccounted money will remain, they say! To me it looks like there will be more than 2 or 3 more trillion yet to come, and so we might find MORE money than 15.5 trillion now? Something doesn't fit.

So what's going wrong in these numbers? This is the first time I am seeing a report that 4.5 trillion out of the 15.5 was sitting with RBI and the banks as of Nov. 8th. All the stuff I had seen written by everybody else were always working with the Rs. 15.5 trillion figure as the high denomination currencies "in circulation" on Nov 8th. Did this article make a mistake and assume that RBI's CRR (cash reserves) was part of the 15.5 trillion? Anybody knows?

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby SaniaFan » Thu Dec 01, 2016 3:49 pm

Maybe even RBI is not able to distinguish between the fake and the real money!!!

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby prashanthm » Thu Dec 01, 2016 3:58 pm

SaniaFan wrote:Maybe even RBI is not able to distinguish between the fake and the real money!!!


This was the same thought I had after reading @jay's post...

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby gbelday » Thu Dec 01, 2016 4:03 pm

Prasen, honestly, it’s not the pessimism (as you refer to it) as much as the fact that are trying really hard to separate yourself from the “herd”.

The text book definition of genocide says “the deliberate and systematic extermination of a national, racial, political, or cultural group”.
I don't think there was anything deliberate or systematic with what happened in Godhra. I know it's been debated many times and in many different forums before. Here’s what I believe - Narendra Modi is not personally responsible for any of the deaths. Wasn’t he acquitted of any wrong doing? Yes, his administration definitely takes blame for letting the situation get out of control but that’s not the first time Hindus and Muslims killed each other. Growing up in Hyderabad, I would witness such riots occur like clockwork every year. And every year, we would blame the government for letting that happen but nobody was ever accused of genocide.

The 1984 riots (and the killings) in the aftermath of Indira’s assassination, on the other hand, were orchestrated by the government and that was proven in the courts too.

Ours is so corrupt a nation that one move won't make a big impact. I think Modi knows that. I see this as the first of many. We've had the Congress guys for so long. What have they achieved in all those years?. The amount of black money seems to have multiplied during their reign. It has to stop and I see this as a first step. Yes, I am optimistic but I am not a blind follower. He has a few more years and I am willing to give him a chance before I write him off like the other politicians that were in charge before him.

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby gbelday » Thu Dec 01, 2016 4:09 pm

...also Prasen, I also want to make it clear that I like your posts and they are always driven by facts and numbers. They make me take a step back and think a bit more. I would vote for you or PKB (two people with almost opposite views) if you ever stood for an office because I think both of you are genuine :)

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby prashanthm » Thu Dec 01, 2016 4:43 pm

gbelday wrote:if you ever stood for an office because I think both of you are genuine :)



Are you saying that everyone else on this forum is fake? ;)

Just joking.....

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby sameerph » Thu Dec 01, 2016 5:33 pm

jayakris wrote:So what's going wrong in these numbers? This is the first time I am seeing a report that 4.5 trillion out of the 15.5 was sitting with RBI and the banks as of Nov. 8th. All the stuff I had seen written by everybody else were always working with the Rs. 15.5 trillion figure as the high denomination currencies "in circulation" on Nov 8th. Did this article make a mistake and assume that RBI's CRR (cash reserves) was part of the 15.5 trillion? Anybody knows?


I am quite sure that it is a mistake. CRR is kept either in cash or deposits with RBI. So, how are they assuming that the entire CRR was kept in cash in high denomination notes ?

Most of the articles with some of the most respected newspapers show Rs. 15.5 trillion as notes taken out of circulation.

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby kujo » Fri Dec 02, 2016 1:25 am

jayakris wrote:Here is an interesting article from IANS (agency) in the Hindustan Times today - What black money? Govt may be in for shock after demonetisation

Something seems wrong in the numbers they are showing. Did this article make a mistake and assume that RBI's CRR (cash reserves) was part of the 15.5 trillion? Anybody knows?


Yeah there is something definitely wrong with that article, it and the prior one written by a similar team were making wrong assumptions.

On a balance sheet, you can't double count the same asset or the same liability. That is exactly what this article did!!

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby kujo » Fri Dec 02, 2016 7:48 am

And for those who are being so cavalier about the deaths due to demonetization, that were avoidable & unnecessary in the first place. Please don't. I understand the idea of losing lives for a greater cause. But this is not a greater cause, it is simply a political gimmick played out on a grand scale!

Your examples are WRONG. To deploy the limited coast guard resources in order to save lives in a storm ( which is a natural disaster - whereas this is man made)??
Equating deaths due to terrorism inside a country (inspite of it being a tit-for-tat or is it just tat tat tat all the time and India did a "tit" once recently!?) to a man made policy change that resulted in deaths?!!

Come on, you both know better.....
Last edited by kujo on Fri Dec 02, 2016 8:13 am, edited 2 times in total.

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby kujo » Fri Dec 02, 2016 8:01 am

Why do I saw avoidable and unnecessary?

ALL it required was to make the 500 and 1000 rupee notes VALID in the private hospitals as well as govt. ones. We all know govt hospitals alone cannot provide the necessary services to every citizen in India. If these notes are still valid in gas stations across the country, why not the hospitals - atleast for the same period of time (till Dec 2)?

JUST two additional words in that directive given on Nov 8 ("Private hospitals") would have saved many of these lives. Their medical emergencies resulted in deaths. You say pvt hospitals are a source of black money? So what? Isn't the need to save lives matter as well? Do your IT audits and catch any abnormal trends in those hospitals.

If you are talking about closing loops holes for black money:
who says the banks (with over 10 lakh employees) are absolutely not corrupt? That all of their transactions to date are legit and above board?
do you not know that farm income and farmers are an outlet for this?
not to mention the SHG schemes out there...


Basically rules and directives are there for people who follow them. Not for the black money folks - who don't care about these. The ground reality is, all of this so called "inconvenience" (which is a very light term to use for this nonsense) is resulting in a major economic slowdown (upto 8% less GDP than forecasted), loss of lives (70+) and almost 100% of black money being converted to legal tender (with some commission).

WHAT A WASTE!!

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby kujo » Fri Dec 02, 2016 8:05 am

kujo wrote:
On a balance sheet, you can't double count the same asset or the same liability. That is exactly what this article did!!


To clarify, that 4 lakh crore number for CRR is separate and excluded from 15.44 lakh crore notes that are in circulation.

Cash reserve ratio CRR is money held by banks (in cash / notes) for the purposes of their daily operations. This CRR also includes money that is held by the RBI on behalf of the banks. IT is a separate line item from the actual set of notes in circulation with the general public.

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby Prem » Fri Dec 02, 2016 9:44 am

I to open agree with Kujo - what is going on is utter nonsensical and I am sure Modi will pay a heavy price for this.
The media, which is all bought out, has not shown the ground level realities and this has not helped at all.....
It's not small pain for larger gain....it's a large pain for a small gain.
NaMo probably did it to upset SP and BSP in UP Or to save the banks or something else - but he didn't think it will come to this mess...and where is the black money that was supposed to come into the system? Agree, some small crooks and bribe takers have lost out in this but was this the motive???
Hope some sense prevails and the situation is soon back to normal atleast by end of the month as the Govt. has been promising.

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Re: India scraps its two largest rupee notes in shocking anti-corruption move

Postby Mugundan » Fri Dec 02, 2016 1:59 pm

This is the first time that I have heard abut 15.5 trillion as the figure for high denomination notes as on Nov 8. All reports had stated 14.5 lakh crore (which I presume would come to 14.5 trillion?).
Almost every report and TV programme so far had mentioned that there was no estimate of the cash held by RBI and the banks (plus ATMs) on the night of Nov 8. Obviously there would be many stories and many versions about this and until the RBI comes up with a firm figure it could only be conjecture (or informed sources as they say).
http://www.thehindu.com/news/national/R ... 440921.ece

Many reports have suggested that around 90-95 per cent of the high denomination notes seem to be coming up looking at the current rate at which deposits have come in. They have also suggested that the Govt may be fearing such a scenario and has thus given a second amnesty in the form of 50 per cent tax to those who have held onto the black money.
Today there is a report that says a Gujarat businessman had declared Rs 13,000 crore as undeclared wealth before the last amnesty!
http://timesofindia.indiatimes.com/city ... 748408.cms
It is yet too early to say how much Govt would net from the current exercise.


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