3 ms·

I don't understand what happened wrt #1. Was the black money like the mythical WMDs and unicorns? Or did it just make its way into the new money supply?

euphoria83 10y ago
It got converted into white money by getting deposited into banks through other (mostly poor) people's accounts. Hence, a sum of 5 million rupees was distributed among 20 people (mostly domestic helps, gardeners, chauffeurs, etc). Each account's deposit is small enough to not raise suspicion. These amounts will slowly be withdrawn. In addition, bank managers also acted in complicity with rich black money holders by documenting that their currency bills were actually exchanged by multiple ordinary folk, whose IDs' copies (necessary proof for exchanging) exist in large numbers at any bank.
- deleted 10y ago
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- brutus1213 10y ago
  Any media reports on this? Really sad that a great human toll was paid for naught.
  - denzil_correa 10y ago
    80% of the demonetized currency was back into the banks, 20 days before the final date [0]. Bloomberg reports that the final number could be as high as 97% [1]. Now, the question you should ask is - How much of black money was in cash? The answer is approx. 6% according to Min. of Finance White paper on Black Money. So, effectively - 86% of the currency was demonetized to target 6% of unaccounted income. No matter how you slice/dice this policy, the costs significantly outweigh the benefits. [0] http://timesofindia.indiatimes.com/business/india-business/80-of-old-notes-worth-12-4-lakh-crore-back-in-banks/articleshow/55970699.cms http://timesofindia.indiatimes.com/business/india-business/8... [1] https://www.bloomberg.com/news/articles/2017-01-04/india-said-to-get-97-banned-notes-in-setback-to-graft-crackdown https://www.bloomberg.com/news/articles/2017-01-04/india-sai...
    - deleted 10y ago
      [deleted]
denzil_correa 10y ago
Multiple reports and research have said that black money in cash is approx. 6%. So, you can't get more than 6% back anyways and the government decided to demonetize 86% of the currency in the market.

euphoria83 10y ago

It got converted into white money by getting deposited into banks through other (mostly poor) people's accounts. Hence, a sum of 5 million rupees was distributed among 20 people (mostly domestic helps, gardeners, chauffeurs, etc). Each account's deposit is small enough to not raise suspicion. These amounts will slowly be withdrawn. In addition, bank managers also acted in complicity with rich black money holders by documenting that their currency bills were actually exchanged by multiple ordinary folk, whose IDs' copies (necessary proof for exchanging) exist in large numbers at any bank.

deleted 10y ago
[deleted]
brutus1213 10y ago
Any media reports on this? Really sad that a great human toll was paid for naught.
- denzil_correa 10y ago
  80% of the demonetized currency was back into the banks, 20 days before the final date [0]. Bloomberg reports that the final number could be as high as 97% [1]. Now, the question you should ask is - How much of black money was in cash? The answer is approx. 6% according to Min. of Finance White paper on Black Money. So, effectively - 86% of the currency was demonetized to target 6% of unaccounted income. No matter how you slice/dice this policy, the costs significantly outweigh the benefits. [0] http://timesofindia.indiatimes.com/business/india-business/80-of-old-notes-worth-12-4-lakh-crore-back-in-banks/articleshow/55970699.cms http://timesofindia.indiatimes.com/business/india-business/8... [1] https://www.bloomberg.com/news/articles/2017-01-04/india-said-to-get-97-banned-notes-in-setback-to-graft-crackdown https://www.bloomberg.com/news/articles/2017-01-04/india-sai...
  - deleted 10y ago
    [deleted]

denzil_correa 10y ago

Multiple reports and research have said that black money in cash is approx. 6%. So, you can't get more than 6% back anyways and the government decided to demonetize 86% of the currency in the market.