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I am based out of India and I find this article misguided. Corruption is a very big problem in India , and lot of bribe is paid in cash. For eg: If you want to

I am based out of India and I find this article misguided. Corruption is a very big problem in India , and lot of bribe is paid in cash. For eg: If you want to buy a house which is sold for 20 million INR , value of same property is 5 million on papers (to evade house tax etc. ) and rest of the money is paid in cash or through some black money . Real estate stocks started sinking down 5 days straight and are expected to sink further after this move. Yes it causes inconvenience to the people but as a tax payer and contributor to the economy I dont mind small inconvenience for greater good.

sumedh 10y ago
What is stopping the corrupt people to ask for bribe in 2000 Rs notes now?
- ak39 10y ago
  Exactly. However this move isn't without immediate benefits. 1. Forces all participants in shadow economy to declare cash assets. So it's a data point from which to baseline total cash asset census. 2. Data collected about individuals with most cash declared will allow for revenue services to target those individuals first. 3. The introduction of serious risk for hoarding cash in the future. The government followed through with this threat so it's a precedent. BTW, I'm a foreigner and I am traveling to India in a week's time and I hope the impact on tourists is all but dissipated by now!
- DesiLurker 10y ago
  Nothing, except that they cannot make any big purchases (like land/gold or cash deposit) with the vast amount of bribe money they make. To think of this as a fix-all solution is misguided ( & for a good reason, pls see my other larger post). this is just peeling layers of the onion. Remember before this He introduced the eqv of ssn in india so that connects a human uniquely to a (large) transaction. You'll notice the land prices will fall as a result of this move, its because a large chunk of land sale is all cash.
kamaal 10y ago
>>If you want to buy a house which is sold for 20 million INR , value of same property is 5 million on papers (to evade house tax etc. ) and rest of the money is paid in cash or through some black money . None of this changes even after this. There is a reason why this happens. Try getting a plan approved from any government agency without bribe. Or getting raw material like cement and sand passed through checkposts without bribe. Builders take black cash because they have to work with an ecosystem where bribes are common, they can't pay those bribes through legally accepted white money for the obvious reasons. Now this is just one instance I'm talking about. If you start building a house you will notice how many such interactions you will have to do where money is exchanged in non-taxable ways. You are basically fighting against an highly corrupt citizenry. >>Real estate stocks started sinking down 5 days straight and are expected to sink further after this move. Pray, that the builders don't default on their big loans to banks. Or a stock market crash is on hands, and may be a tax payer funded payout after. >>Yes it causes inconvenience to the people but as a tax payer and contributor to the economy I dont mind small inconvenience for greater good. This changes nothing. Corruption is a way of life in India. You will end up fighting everything and everybody and still get nothing out of it. Because people are dishonest. And please! this middle class salaried virtuousness is hypocrisy. Salaried classes are not honest because of choice but because of lack of opportunity. Producing fake rent receipts and medical receipts for tax deduction is common in office places.
- DesiLurker 10y ago
  one by one my dear, one by one. atleast you'll agree that this move makes most of the cash traceable, right? Also, businesses are corrupt because they dont have a choice, running you businesses clean & paying taxes does not precludes you from having to 'service' the IT dept & netas. So it creates an environment of competitive disadvantage for them. at their level they really cant do much to change the game, just play it. the salaried class is doing these infractions again because poor tracability of transactions hence exponentially larger effort needed to audit. secondly there is a very common sense of 'we are being fleeced' in salaried class so they try to do what they can. All of this is an argument to fix these large problems not leave them alone with cynicism.

sumedh 10y ago

What is stopping the corrupt people to ask for bribe in 2000 Rs notes now?

ak39 10y ago
Exactly. However this move isn't without immediate benefits. 1. Forces all participants in shadow economy to declare cash assets. So it's a data point from which to baseline total cash asset census. 2. Data collected about individuals with most cash declared will allow for revenue services to target those individuals first. 3. The introduction of serious risk for hoarding cash in the future. The government followed through with this threat so it's a precedent. BTW, I'm a foreigner and I am traveling to India in a week's time and I hope the impact on tourists is all but dissipated by now!
DesiLurker 10y ago
Nothing, except that they cannot make any big purchases (like land/gold or cash deposit) with the vast amount of bribe money they make. To think of this as a fix-all solution is misguided ( & for a good reason, pls see my other larger post). this is just peeling layers of the onion. Remember before this He introduced the eqv of ssn in india so that connects a human uniquely to a (large) transaction. You'll notice the land prices will fall as a result of this move, its because a large chunk of land sale is all cash.

kamaal 10y ago

>>If you want to buy a house which is sold for 20 million INR , value of same property is 5 million on papers (to evade house tax etc. ) and rest of the money is paid in cash or through some black money . None of this changes even after this. There is a reason why this happens. Try getting a plan approved from any government agency without bribe. Or getting raw material like cement and sand passed through checkposts without bribe. Builders take black cash because they have to work with an ecosystem where bribes are common, they can't pay those bribes through legally accepted white money for the obvious reasons. Now this is just one instance I'm talking about. If you start building a house you will notice how many such interactions you will have to do where money is exchanged in non-taxable ways. You are basically fighting against an highly corrupt citizenry. >>Real estate stocks started sinking down 5 days straight and are expected to sink further after this move. Pray, that the builders don't default on their big loans to banks. Or a stock market crash is on hands, and may be a tax payer funded payout after. >>Yes it causes inconvenience to the people but as a tax payer and contributor to the economy I dont mind small inconvenience for greater good. This changes nothing. Corruption is a way of life in India. You will end up fighting everything and everybody and still get nothing out of it. Because people are dishonest. And please! this middle class salaried virtuousness is hypocrisy. Salaried classes are not honest because of choice but because of lack of opportunity. Producing fake rent receipts and medical receipts for tax deduction is common in office places.

DesiLurker 10y ago
one by one my dear, one by one. atleast you'll agree that this move makes most of the cash traceable, right? Also, businesses are corrupt because they dont have a choice, running you businesses clean & paying taxes does not precludes you from having to 'service' the IT dept & netas. So it creates an environment of competitive disadvantage for them. at their level they really cant do much to change the game, just play it. the salaried class is doing these infractions again because poor tracability of transactions hence exponentially larger effort needed to audit. secondly there is a very common sense of 'we are being fleeced' in salaried class so they try to do what they can. All of this is an argument to fix these large problems not leave them alone with cynicism.