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

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

Postby kujo » Fri Dec 02, 2016 2:25 pm

Mugundan wrote: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


Mugu,

I was under the same impression about the two things you mentioned above,
1. 14.5 (actually 14.18 lakh crore) notes in 500, 1000
2. we don't know the cash notes held by RBI, banks (plus ATMs)

Hindu - good newspaper - is still not the be all / end all for such reporting, if I may say so. As it says in that aricle you quoted: " Till March 2016, Rs. 14 lakh crore out of Rs. 16 lakh crore worth currency issued by the RBI were in the denominations of Rs. 500 and Rs. 1,000, as per the central bank’s official data."

So, 14.18 is accurate as of March 2016 and as of Nov 8, 2016 this number is different. Although RBI does not give a denomination wise breakdown for this, it does provide weekly reports from which we can glean the 15.5 number. And the same weekly report also shows the cash reserves held by Banks and the RBI.

Hence, the numbers quoted in the Hindustan times article are accurate, however their MATH is WRONG....

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

Postby sameerph » Fri Dec 02, 2016 2:46 pm

Prem wrote: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.


Huh,media bought out by whom ? Except for one channel ( Times now), entire TV media is anti-government and most of them are exaggerating the pain than what the reality is.

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

Postby ankit1407 » Fri Dec 02, 2016 3:05 pm

sameerph wrote:
Prem wrote: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.


Huh,media bought out by whom ? Except for one channel ( Times now), entire TV media is anti-government and most of them are exaggerating the pain than what the reality is.


which ground reality is not reported? As much as i know after this was done for the first 7-10 days all i heard was so called media trying to prove how bad the situation is.

I am based in Pune and sure we have problems no one is getting away with it but people have largely taken it into the stride..will it last well its anybody's guess...I have paid lot of guys via digital wallet then i ever thought i would , i just hope it lasts thou....

btw latest reports suggest 11 Lakh crore (unofficial) already in the system..at this rate pretty much all money would be back into the system by dec 30..I think this is not what Modi thought would happen...

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

Postby Mugundan » Fri Dec 02, 2016 3:27 pm

sameerph wrote:
Prem wrote: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.


Huh,media bought out by whom ? Except for one channel ( Times now), entire TV media is anti-government and most of them are exaggerating the pain than what the reality is.

The general impression that politicians got (including a large number of ministers and BJP MPs) was that media was showing people by and large supporting the Govt move.
"Despite the reporters literally putting their fingers into the mouths of people to tutor answers, the common man has been supporting the move ever since it was announced" said FM (rough translation of what he said in Hindi at HT conclave).
The exception to the large-scale media support might have been India Today (may be just one anchor, Rajdeep Sardesai) who ha been able to give a balanced picture. CNN News 18 in some of its reports have also shown how people have suffered around the country.
As everyone keeps saying we all want black money to be rooted out of the system. But this looks like mega pain for small gains so far. The suffering, even if Govt manages to wipe out let's say Rs 3.5 lakh crore of black money, would not be compensated in the eventual calculations. So many people have died; so many are suffering; people have no jobs; nothing to eat in several instances.
Last night I saw TV reports that showed people sleeping on the pavements in front of banks in this weather, to line up for the meagre amount that they expect to get next morning. One can say media is cooking up, of course! How long can we fool ourselves by saying this?
"Minor inconveniences"!

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

Postby sameerph » Fri Dec 02, 2016 3:46 pm

Mugundan wrote:"Despite the reporters literally putting their fingers into the mouths of people to tutor answers, the common man has been supporting the move ever since it was announced" said FM (rough translation of what he said in Hindi at HT conclave).


Isn't it true ? Even most of those standing in the lines are saying that they generally do not oppose the move despite some hardship.

In the 2 local body elections held in Maharashtra and Gujarat in last 2 week ( much after demonetisation) BJP has swept the polls. It also did decently in the assembly by-elections held few weeks back.

Even 2 of the most sensible opposition politicians Nitish Kumar and Naveen Patnaik have supported the move.

The ones who are opposing are the likes of Mamta, Mulayam, Lalu etc. and all of them have serious corruption charges levied against them.

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

Postby gbelday » Fri Dec 02, 2016 4:00 pm

Mugu, points well taken but why isnt' there any mass hysteria? Why aren't people demonstrating on the streets?
A friend of mine that I was chatting to yesterday said something interesting. Quite a few people that are standing in the lines were doing it on behalf of the people that they work for (or getting paid for doing so). He also said for most part, things have been pretty normal. They seem to be pains but not "mega pains" like you are indicating. This is in Hyderabad.

Would be good to hear from Ashish (gvhgvh) who is in India right now (saw it on his FB post). He works (or used to) for one of the media outlets (Al Jazeera, I think) and would love to hear his views.

My parents are not tech savvy by any means (they wouldn't know what a digital wallet is) but they are getting creative with making payments like many other are.

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

Postby Mugundan » Fri Dec 02, 2016 4:34 pm

In the first week, I think most of the people were busy exchanging notes. Once the indelible ink came in, the rush became less. Then came the great rush to deposit money and withdraw money. Pay day has brought upon its own rush which should last a week or so.
But is it only a matter of rush and queues? People are being deprived of their money by restrictions. Though on paper one can draw Rs 24,000 a week that has not happened (going by reports) in most cases. People have said they were given Rs 6000 to Rs 10,000.
Is it only a matter of black money getting wiped out and we coping with "minor inconveniences"? What about people losing jobs? What about people unable to get money for urgent medical needs? Credit cards may come later; e-wallets may come later. But till then? I strongly feel this has been a huge, huge pain.
I go around to buy veg, fruit and milk every day. I have to shell out cash. E-Wallet-holding veg seller could be there on TV and in claims by ministers but not in all 'mohallas'.
I hear people on TV crying that they come almost every day and return empty-handed. No, I don't think I have watched any reporter forcing any one to say something against his/her wishes. Sometimes you do need to prompt: "Have you managed to get some money"? "Have to you been here for long?" " How much have you got"? But invariably almost every question-answer session ends with :" Are you happy with what PM has done" And the people in chorus respond: "Yes, Yes". I wonder whether people are wary of making a negative comment on TV.
I watch news channels almost throughout the day but I can't vouch for the fact that they are neutral. Some of them look to be favouring the ruling party; most of them try to balance it out.
Just because people say "we are prepared to suffer" should not mean, In my view, the hardship is not there. There are hundreds of heart-breaking stories that come through newspaper reports.
I am not against the shock therapy but only wonder whether it would eventually benefit the poor, as had been claimed. People in queues generally believe a great transformation would come about in the economy. It would come surely in the "cashless economy" that PM/FM etc are talking out but will it compensate for the misery that people have already undergone?
Finally, will this end generation of black money? Lot of economists have differing views here. I wait to see what is going to happen.

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

Postby jayakris » Fri Dec 02, 2016 5:20 pm

I am sorry, I just don't see the pain, in a true sense. It is not like Indians haven't stood in a queue for ever. It's not like they have always been able to get the food items and other things easily, or have money or change all the time with them. People have gone through this kind of stuff quite a few times in their lives at various points, and the only difference in this case is that it happened to everybody at one time.

I stick to the opinion that real pain inflicted on people can be seen when they protest. And people DO protest. It happens in every country when real pain sets in. Even in the emergency period, with the whole country becoming a police state, we had people protesting (I am sure Mugu remembers the famous Rajan "urutt" case of police murder in Kerala). People going to jail. People trying to kill policemen and setting fire to the givernment buildings or buses (the easiest thing to do!). People have not resorted to even the easiest arson violence anywhere.

In fact it is usually not the poor who start it off when people in any country start really suffering. It's usually students. If there are real issues, students will get out on the street (no surprise that the above-referred Rajan was a student too). The students have an uncanny way of sensing things going wrong, and the requisite innocence to think that they can do something about it. It happens everywhere, and it has always happened in India too. There is nary a report of any student protests anywhere. What that means is that the Indian public has not found the pain from this to be any worse than things they have gone through many times in their lives. Maybe not all at one time, but it is not like they have never seen things of this kind.

I remember having to go to a bank 4 days in a row while in high school to get back matured "sanchayika" school deposit scheme money back, being told every time that it it was some special money that they could not disburse yet and to come the next day... I remember not having power in our house for 5 days in a row once in 1976. Stuff like that happens in India and people get through it. They had a whole bunch of it together, that's all. If not, we would have seen some serious protests and lathi-charges. We're talking of the whole of India. Three weeks after the so-called "pain" started, and without police roaming around the streets like during Emergency, we still don't have reports of any student protests or a minor lathi-charge? I need no further proof on the amount of pain involved.

In fact I am incredibly surprised that the opposition hasn't manged to even pay some people to go create some protest bus-burning. Maybe they have no money left to pay for protestors, now that all their black is gone or is parked somewhere. If you don't pay, you don't get people to go for a rally or protest these days. It's certainly the case in places like Kerala! With so much of pain from Co-operative bank issues, I would have expected Kerala to be burning by now. Not really...

Whether this whole thing will help or not remains to be seen. Actually, no, it WILL help. How much it will help remains to be seen.

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

Postby Mugundan » Fri Dec 02, 2016 6:04 pm

There have been sporadic spells of violence, especially in Uttar Pradesh. You don't get prominent reports about them. People have been lathi-charged mercilessly. Several clippings were compiled by one of the channels the other day and shown. Print media has also carried reports about such violence. But as you say Jay, the student community has kept quiet. So, too people in Kerala at large though they have been one of the worst hit because of the ban on Co-op banks. People are slowly losing their patience.
Pain? I haven't seen a worst phase of misery for the common man in my life, apart from natural calamities, communal disturbances, other rioting etc. Delhi (where I am now,having left my base in Kerala in the third week of October) seems to be the worst hit in this respect with unending queues, banks and ATMs running short of cash and daily labourers going without wages. ( I do remember Emergency, Kerala during those days etc.)
May be almost everyone is convinced that this would bring about a huge change in their lives and thus they are willing to endure. Poor guys they would be utterly disappointed in the end. Already there are signs of black money being generated all over again. Crores in new notes have been caught. But there could be hundreds of other instances where people would have siphoned off new currency. Money laundering is going on. People may switch to credit/debit cards and e-wallets for the time being and then slowly get back to cash and then black money. I hope it doesn't happen.
The slump in economy (already visible) may negate the extra money that this may bring into the system, as being forecast by several economists. I believe them even as I also hope that this govt might have done a good thing in eliminating black money, at least a large part of it, from the economy.
If money had been laundered to the extent that it is being projected to have been in various reports, this exercise would only have devastated large sections of the poor in our society for nothing. They may not recover at all. If the agony continues for one or two years, most of them would be either dead or end up with incurable diseases or else shattered homes.
I don't think any political party would be able to stand up and say "we are clean, incorruptible". I also don't think any big industrialist or medium-level businessman (who could be making a couple of crores a year) would have paid all income tax dues all these years and are going to pay that now on a regular basis.

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

Postby Prem » Fri Dec 02, 2016 7:47 pm

jayakris wrote: I stick to the opinion that real pain inflicted on people can be seen when they protest. And people DO protest. It happens in every country when real pain sets in. Even in the emergency period, with the whole country becoming a police state, we had people protesting (I am sure Mugu remembers the famous Rajan "urutt" case of police murder in Kerala). People going to jail. People trying to kill policemen and setting fire to the givernment buildings or buses (the easiest thing to do!). People have not resorted to even the easiest arson violence anywhere.


If this goes on for few more days, we will see protests and arson...
People are hoping that the money supply will increase and rationing of cash will be removed very soon.

I am sure the gain it would have brought will be wiped out by the pain and non-productive hours wasted by millions apart from the deaths and suffering people are enduring. In the end, it will bring not much positive outcome for which people are taking the pain.....the ones who don't pay tax wont change overnight and start paying tax. They will continue to find new ways of getting away. Politicians stand with them as they too need these funds for themselves.

I do sincerely hope it brings about a serious change but time will tell...

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

Postby jayakris » Fri Dec 02, 2016 9:16 pm

Prem wrote:I am sure the gain it would have brought will be wiped out by the pain and non-productive hours wasted by millions apart from the deaths and suffering people are enduring.

What gain did you feel it would bring? I think quite a few of you are saying that the gain isn't worth the pain, but unless we have a clear sense of the expected gain, we cannot discuss this well. The pain part of it is quite well-known by now, but what gain did you (and do you currently) expect, to say that it is not sufficient to outweigh the pain?

I definitely see that the pain is fully worth it, even if the government gets only 0.5 lack crore back (or even none at all). To me, how much money is taken out of the economy is not what really matters, but that from ow on, all (or a much much higher fraction of) the money is accounted for, and in banks. Is that what you had in mind as the gain, when you said it wasn't worth it?

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

Postby Atithee » Sat Dec 03, 2016 2:39 am

Let's not talk about loss of productivity and jobs. It's not like we are so efficient to begin with. Maybe, the system is now at its most efficient as all the excess fat has been sent by the supervisors to line up at the banks. I'd even go as far as saying maybe some unemployed have found a new job -- stand in lines and get paid! Mugu and Prem, have you met any of these hyperbolic sufferers or this is just what you hear? I'm in UP (ok UK) and there is little sign of any abnormal suffering. It doesn't mean there isn't any. Whether it's worth the pain? ABSOLUTELY. It's a game changing event. Yes, corruption will continue, but now the masses from uber rich to poor know that the government has cajones. Truth be told, it's the rich who is suffering at least equally because they don't know how to get rid of their unaccounted money. And these folks, who employ most of the ones you constantly talk about being jobless, cannot do without their services. So, you can bet your last paisa, that daily laborers aren't as unemployed as you project. As for daily limits etc in banks, I've experienced it first hand. ZERO impact without any special favors. Remember, only until 20-30 years ago, almost all daily needs were delivered on credit to households. People on both sides are used to it. Indian people are among the most resilient people I know anywhere in the world. They've seen worse before. They will get by. Worst case, there is no major downside. And, I'm not being cavalier about it. Really.

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

Postby Mugundan » Sat Dec 03, 2016 7:18 am

I am not sure whether the pain part is fully understood by Jay or many of the others here. It is not like queuing up for a cricket match or concert or for kerosene, as had been mockingly suggested by many a politician and intellectual. People have spent much of their time during the past three weeks making attempts to exchange/deposit/withdraw money. Most of the times many have failed. But let’s forget about queues. What about the disruption it has caused in lives. If people are refusing to believe that the poor have lost jobs, so be it. I depend on newspapers, TV and people around my place to get information regarding jobs, problems of the poor etc. I suppose almost all of us have to depend on such channels only since there is no way of going around and verifying whether someone has actually lost job.
Jay says the pain is fully worth it even if the govt gets only 0.5 lakh crore back (or even none at all) since he is of the opinion that the money that gets back into the system is accounted for and is in the banks.
Will this not mean that all the black money (cash) has been converted into white (bank deposits)? Was this then an exercise to help black money hoarders to convert illegitimate wealth into white, as had been alleged by some of the opposition parties, AAP in particular?
(I do believe that part of the money that would come back into the system would probably attract income tax since early reports suggested that IT people have issued notices to several people who have shown sudden spurt in deposits running into lakhs (perhaps crores) without apparently having the sources of income that would justify such spurt).
Can there be a guarantee that black money would not be generated after this exercise? (Presuming that no black money has been unearthed and all money has come back into the banking system, let’s believe for a moment). What prevents people from creating fresh black money, income and black wealth? If someone goes around looking for a house/flat and is told it would cost Rs 1.5 crore if all transactions have to be white and Rs 1.25 crore if part of it could be in black (cash), what can happen? Can that buyer be expected to say “I am an honest citizen, I pay my taxes, I will give only in cheque”? (People have done that pre-Nov 8, 2016 as well but that is a different story since such exceptions could have been around one per cent or even less).
The person who receives cash for any big deal can continue to circulate that cash in similar deals with similar set of people and before long we will realize that the black money component is back to where it was.

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

Postby Mugundan » Sat Dec 03, 2016 7:21 am

kujo wrote:
Mugundan wrote: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


Mugu,

I was under the same impression about the two things you mentioned above,
1. 14.5 (actually 14.18 lakh crore) notes in 500, 1000
2. we don't know the cash notes held by RBI, banks (plus ATMs)

Hindu - good newspaper - is still not the be all / end all for such reporting, if I may say so. As it says in that aricle you quoted: " Till March 2016, Rs. 14 lakh crore out of Rs. 16 lakh crore worth currency issued by the RBI were in the denominations of Rs. 500 and Rs. 1,000, as per the central bank’s official data."

So, 14.18 is accurate as of March 2016 and as of Nov 8, 2016 this number is different. Although RBI does not give a denomination wise breakdown for this, it does provide weekly reports from which we can glean the 15.5 number. And the same weekly report also shows the cash reserves held by Banks and the RBI.

Hence, the numbers quoted in the Hindustan times article are accurate, however their MATH is WRONG....

Thanks Kujo. This was a Parliament answer and should be correct. Probably this was an IANS report (not HT). Again, The Hindu was correct when it published the report since the information available at that time was exactly what had been published.

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

Postby Mugundan » Sat Dec 03, 2016 7:30 am

Atithee wrote:Let's not talk about loss of productivity and jobs. It's not like we are so efficient to begin with. Maybe, the system is now at its most efficient as all the excess fat has been sent by the supervisors to line up at the banks. I'd even go as far as saying maybe some unemployed have found a new job -- stand in lines and get paid! Mugu and Prem, have you met any of these hyperbolic sufferers or this is just what you hear? I'm in UP (ok UK) and there is little sign of any abnormal suffering.

This is based on newspaper and TV reports. I do get to hear people in general talking of the hardships, but the information is primarily from news reports. Atithee, you seem to have been particularly lucky with the queue in bank. I have gone to banks several times during the past three weeks and did not have the guts to approach the queues. Yet to do it in fact, I managed to get Rs 2000 on Nov 30 from an ATM, thanks to our driver. My son had also managed to bring home some cash. Rest through credit/debit cards. Luckily till now medicines were available through old Rs 500 notes though some pharmacists (private hospital) made the process rather cumbersome (thanks to our govt) by seeking ID proof copy and asking people to fill up a form. Currently everyone is considered a "chor" and I know I cannot be an exception!
Here is a sample of the kind of reports that have appeared during the past few weeks regarding the hardship of labourers etc.

http://indianexpress.com/article/cities ... d-4407838/


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