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It seems like the issue is more about workers who depended on payments in cash (thus untaxed and the source of the black money in the first place) no longer bei

It seems like the issue is more about workers who depended on payments in cash (thus untaxed and the source of the black money in the first place) no longer being able to find enough work to pay for basic necessities. The implication is that their employers are simply not hiring as many people to make up for the additional taxes they are paying (this is my interpretation, this is really the first I've read about this, so if I am wrong or misunderstanding, very interested in learning more)

yummyfajitas 10y ago
In India, if you earn < 2.5 lac/year (about $3500), you don't owe any taxes. The gdp/capita is about 1 lac/year (about $1500). The worker described in the article is making about $200/month or 1.6 lac/year. The actual issue right now isn't so much taxes. It's not having physical cash. No matter how many crores you have in your bank account, you can't pay workers (many of whom have no bank account) if you can't withdraw physical bank notes. Further, even if you could transfer money to those workers, they can't buy vegetables unless they can find a vegetable seller who takes PayTM. In India, most of the economy is cash based. The primary exception is in major cities where credit cards and PayTM (think Indian version of WeChat payments) have suddenly become vital. Suddenly many autowales and small restaurants have PayTM QR codes. Even some vegetable sellers take PayTM!
- the_watcher 10y ago
  Sorry, I didn't think the issue was the poor not paying taxes. Perhaps this is just me applying US tax paradigms to India, but what seemed to be the issue to me was employers paying those workers in cash, thus avoiding any taxes the employer would need to pay. Your point on not being able to pay workers in cash when actual cash is just not available is a good one though, and definitely helped me in understanding what is going on a bit more, thanks.
vram22 10y ago
>The implication is that their employers are simply not hiring as many people to make up for the additional taxes they are paying (this is my interpretation, this is really the first I've read about this, so if I am wrong or misunderstanding, very interested in learning more) reply That interpretation (hiring is less due to having to pay more tax) is likely only a minor part of it. The much bigger issue is likely the lack of actual physical cash since the demonetization started, which is a few months ago now. (Things have started improving only recently.) Lots of people in India - probably the majority - do not use electronic methods of money transfer (due to being illiterate or computer-illiterate, old-fashioned, being in remote areas or other reasons), so depend heavily on cash. IOW, yummyfajitas' statement: >It's not having physical cash. is right.

yummyfajitas 10y ago

In India, if you earn < 2.5 lac/year (about $3500), you don't owe any taxes. The gdp/capita is about 1 lac/year (about $1500). The worker described in the article is making about $200/month or 1.6 lac/year. The actual issue right now isn't so much taxes. It's not having physical cash. No matter how many crores you have in your bank account, you can't pay workers (many of whom have no bank account) if you can't withdraw physical bank notes. Further, even if you could transfer money to those workers, they can't buy vegetables unless they can find a vegetable seller who takes PayTM. In India, most of the economy is cash based. The primary exception is in major cities where credit cards and PayTM (think Indian version of WeChat payments) have suddenly become vital. Suddenly many autowales and small restaurants have PayTM QR codes. Even some vegetable sellers take PayTM!

the_watcher 10y ago
Sorry, I didn't think the issue was the poor not paying taxes. Perhaps this is just me applying US tax paradigms to India, but what seemed to be the issue to me was employers paying those workers in cash, thus avoiding any taxes the employer would need to pay. Your point on not being able to pay workers in cash when actual cash is just not available is a good one though, and definitely helped me in understanding what is going on a bit more, thanks.

vram22 10y ago

>The implication is that their employers are simply not hiring as many people to make up for the additional taxes they are paying (this is my interpretation, this is really the first I've read about this, so if I am wrong or misunderstanding, very interested in learning more) reply That interpretation (hiring is less due to having to pay more tax) is likely only a minor part of it. The much bigger issue is likely the lack of actual physical cash since the demonetization started, which is a few months ago now. (Things have started improving only recently.) Lots of people in India - probably the majority - do not use electronic methods of money transfer (due to being illiterate or computer-illiterate, old-fashioned, being in remote areas or other reasons), so depend heavily on cash. IOW, yummyfajitas' statement: >It's not having physical cash. is right.