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I am originally from India, living in NYC for last 10 years. Black money is a major problem in India, it's directly fueling This is an ingenious way to handl

I am originally from India, living in NYC for last 10 years. Black money is a major problem in India, it's directly fueling This is an ingenious way to handle the problem at its root. I don't know how Government is going to handle this transition in a country as big and diverse as India. Personally, I prefer the rip-off-the-band-aid approach. The only thing I disagree with is the ATM daily/weekly withdrawal limit (10,000Rs/20,000Rs). I think this withdrawal limit is too low and would inconvenience lot of folks. I am not even sure what these low withdrawal limits are supposed to achieve.

activatedgeek 10y ago
You always have the option of cheques, plastic cards and electronic transfers. Anybody who wants larger amount of cash I am sure they have a bank account and can accept payments via that mode as well for the time being. If they can't, then well boy, they were already defaulters.
mkagenius 10y ago
> I think this withdrawal limit is too low and would inconvenience lot of folks Yup. If someone needs to pay for medical emergencies, they will suddenly have to ask for help from lot of people.
- yummyfajitas 10y ago
  Or use a credit card. When I had my back surgery a few years back, I just swiped for 1.2 lac. Of course, most people don't have a CC with that high a limit...
  - mkagenius 10y ago
    > Of course, most people don't have a CC with that high a limit In India, no body has a CC, even debit card is only 22%
    - KumarAseem 10y ago
      In India, it is mostly the poor who don't have CC. Every upper class person has multiple CCs and most of the middle class, specially those in the age of 20-40 have atleast one CC. People may keep just one debit card but they do keep multiple CCs. And now even the poor have bank accounts and many have debit cards.
- leafee 10y ago
  Hospitals and pharmacies are accepting the older bills for a longer window.
  - mkagenius 10y ago
    Nobody has that kind of cash at home, if some emergency comes tomorrow they will have to go to the ATM which will won't work, or banks which will be closed. Tomorrow and day after will be a bad day for people having emergencies unless hospitals are free of cost.
intended 10y ago
Who says black money is a major problem in India ? I keep hearing this, and then I see no proof. Right now I see people conflating the unorganized sector with black money - and these are two separate things. Any ideas where I could find supporting data from a major economic body ?
- nileshtrivedi 10y ago
  How about the fact that only 1% Indians pay Income tax? https://www.thequint.com/hot-wire/2016/05/01/only-1-per-cent-indians-pay-income-tax-shows-government-data https://www.thequint.com/hot-wire/2016/05/01/only-1-per-cent... The official number of millionnaires in India are ridiculously low. This is not due to tax exemptions, but due to income not being declared in the first place.
  - intended 10y ago
    That's absurd though - if 1% pay income tax, the issue isn't black money, but the fact that the unorganized sector is far larger than the organized sector. And this again a known aspect of the Indian economy. India has historically been an agrarian society, then a bureaucratically driven planned economy and only post 1990, has it been free market. That means there's not been enough time for the economy to ensure a good distribution and generation of wealth. Is it unsurprising that wealth distribution is skewed ?

activatedgeek 10y ago

You always have the option of cheques, plastic cards and electronic transfers. Anybody who wants larger amount of cash I am sure they have a bank account and can accept payments via that mode as well for the time being. If they can't, then well boy, they were already defaulters.

mkagenius 10y ago

> I think this withdrawal limit is too low and would inconvenience lot of folks Yup. If someone needs to pay for medical emergencies, they will suddenly have to ask for help from lot of people.

yummyfajitas 10y ago
Or use a credit card. When I had my back surgery a few years back, I just swiped for 1.2 lac. Of course, most people don't have a CC with that high a limit...
- mkagenius 10y ago
  > Of course, most people don't have a CC with that high a limit In India, no body has a CC, even debit card is only 22%
  - KumarAseem 10y ago
    In India, it is mostly the poor who don't have CC. Every upper class person has multiple CCs and most of the middle class, specially those in the age of 20-40 have atleast one CC. People may keep just one debit card but they do keep multiple CCs. And now even the poor have bank accounts and many have debit cards.
leafee 10y ago
Hospitals and pharmacies are accepting the older bills for a longer window.
- mkagenius 10y ago
  Nobody has that kind of cash at home, if some emergency comes tomorrow they will have to go to the ATM which will won't work, or banks which will be closed. Tomorrow and day after will be a bad day for people having emergencies unless hospitals are free of cost.

intended 10y ago

Who says black money is a major problem in India ? I keep hearing this, and then I see no proof. Right now I see people conflating the unorganized sector with black money - and these are two separate things. Any ideas where I could find supporting data from a major economic body ?

nileshtrivedi 10y ago
How about the fact that only 1% Indians pay Income tax? https://www.thequint.com/hot-wire/2016/05/01/only-1-per-cent-indians-pay-income-tax-shows-government-data https://www.thequint.com/hot-wire/2016/05/01/only-1-per-cent... The official number of millionnaires in India are ridiculously low. This is not due to tax exemptions, but due to income not being declared in the first place.
- intended 10y ago
  That's absurd though - if 1% pay income tax, the issue isn't black money, but the fact that the unorganized sector is far larger than the organized sector. And this again a known aspect of the Indian economy. India has historically been an agrarian society, then a bureaucratically driven planned economy and only post 1990, has it been free market. That means there's not been enough time for the economy to ensure a good distribution and generation of wealth. Is it unsurprising that wealth distribution is skewed ?