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>Arun Jaitley, finance minister, on Thursday defended the demonetisation at a conference in New Delhi. He admitted that black money had come back into the banki

>Arun Jaitley, finance minister, on Thursday defended the demonetisation at a conference in New Delhi. He admitted that black money had come back into the banking system, but said that tax officials were combing through people’s accounts to identify and tax it. >He said: “The fact that money has got into the banking system does not mean that it is all now legitimate . . . The money got identified with the owner whom henceforth had been fixed with the liability of explaining that money and facing taxation on it. This is the important part, money coming back to the system doesn't mean people can get away with it. An elaborate exercise is going on and I read multiple stories where the tax dept is sending notices to people with dubious deposits. Also, This is always going to be a polarised debate. Digital payments certainly went up, people started using bank accounts. Yes, it's not significant, but change is really slow

nkskalyan 9y ago
Question is, was it worth it? Weren't there easier ways to increase Digital payments? Better ways to make people put money into banks? Was it worth killing people? http://www.huffingtonpost.in/2016/11/17/day-9-demonetisation-death-toll-rises-to-55_a_21608769/ http://www.huffingtonpost.in/2016/11/17/day-9-demonetisation...
- anigbrowl 9y ago
  'Killing people' makes it sounds like they were shooting anyone who objected, but that article does do a good job of documenting the human cost of economic dislocation. The abrupt and absolute change appears to have given rise to numerous avoidable problems.
- dman 9y ago
  Was it worth extending the status quo where around 1 percent of the population pays any tax at all because of the rampant black market economy? (12.5 million people paid any tax at all on a population of 1.23 billion, source - https://www.cnbc.com/2016/05/03/guess-how-many-people-pay-taxes-in-india.html https://www.cnbc.com/2016/05/03/guess-how-many-people-pay-ta...).
gordon_freeman 9y ago
This. I think the headline title here is wrong. Prime Minister Modi has always said that demonetisation of Rs. 500 and Rs. 1000 is just the beginning and Step #1. The next step is to probe the bank accounts of these wealthy individuals and give them an opportunity to explain why the Tax has not been paid on it before seizing it.
- kinkrtyavimoodh 9y ago
  Unfortunately PM Modi and his government have been constantly shifting the goalposts. In the beginning they did promise demonetization as a way to render all black money null.
  - vikiomega9 9y ago
    Isn't auditing for tax purposes a means of annulling black money?
    - kinkrtyavimoodh 9y ago
      It is, but the initial claim was that this would basically convert the millions of rupees of black money that's hidden away into worthless paper. That was the promise on which millions of poor Indians were asked to stand in long lines—that even if it inconveniences them, it would inconvenience the rich and corrupt even more. Clearly that did not happen.
      - grwthckrmstr 9y ago
        The unfortunate truth, I hope I don't get hate for saying it here, is that those poor people who need the money the most suffered, and even died during the demonetisation exercise http://mashable.com/2016/11/16/india-people-dying-demonetization/ http://mashable.com/2016/11/16/india-people-dying-demonetiza...
snambi 9y ago
Recently I heard that a guy owned 100 trucks is selling his house for quite a low price. Probably lost a chunk of stashed black money. Well, this seems like the effect of demonetization. This is great. The thieves do deserve this.
- statguy 9y ago
  That is just one anecdote. OTOH 103 people died in the process, productivity was lost by people standing in lines all day, GDP growth declined by over 2%, RBI's credibility has been destroyed. Sure, some rich suffered, but many more poor lost their livelihood.
  - harigov 9y ago
    Just out of curiosity, what makes you think RBI credibility is destroyed? Indian Rupee seems to be faring well compared to other currencies. Do you have any data around poor losing their livelihood? Last time I checked, street-side vendors continued selling stuff. Most poor people would rarely deal with 500/1000 so I don't know where is this coming from.
    - statguy 9y ago
      A simple google search gets you RBI loosing its credibility: http://www.hindustantimes.com/analysis/post-demonetisation-rbi-s-credibility-has-been-whittled-down/story-OoKW72YVxsp5LxprxREo2J.html http://www.hindustantimes.com/analysis/post-demonetisation-r... http://indianexpress.com/article/business/banking-and-finance/reserve-bank-of-india-demonetisation-urjit-patel-finance-ministry-the-disquieting-silence-of-the-rbi-4474662/ http://indianexpress.com/article/business/banking-and-financ... > This has led to people such as former prime minister Manmohan Singh (himself a former RBI chief), former finance minister P Chidambaram, and former RBI governors Y V Reddy and Bimal Jalan raising concerns about the “harm” to the RBI’s “credibility” and talking of the “institutional damage” it has “suffered” in the process. http://www.mydigitalfc.com/my-world/rbi-row-oppn-slams-govt-destroying-credibility-autonomous-body http://www.mydigitalfc.com/my-world/rbi-row-oppn-slams-govt-... > “I don’t think ever before, the employees of a government institution especially an independent and respectable institution like RBI have written against its national policy. Very clearly RBI has compromised to an extent never ever before. Prime Minister Modi and his government have destroyed RBI, its credibility and the role of an institution,” Congress leader Sandeep Dikshit told ANI. Poor loosing jobs https://thewire.in/157093/1-5-million-jobs-lost-2017-demonetisation/ https://thewire.in/157093/1-5-million-jobs-lost-2017-demonet... http://indianexpress.com/article/india/demonetisation-35-per-cent-job-losses-50-per-cent-revenue-dip-says-study-by-largest-organisation-of-manufacturers-4465524/ http://indianexpress.com/article/india/demonetisation-35-per... https://twitter.com/r0h1n/status/885774769622196224 https://twitter.com/r0h1n/status/885774769622196224
kamaal 9y ago
>>This is the important part, money coming back to the system doesn't mean people can get away with it. Nobody with big money worth chasing after deposited money in the banks. There are some real estate developers who preferred to throw money in lakes than give it back to the government. >>An elaborate exercise is going on and I read multiple stories where the tax dept is sending notices to people with dubious deposits. Basically any body smart enough to put it back into the bank has long covered their tracks. Also it will take forever given the population scale. >>Digital payments certainly went up, people started using bank accounts. Temporarily, I'm back to DeMo days. People and shops around me too. These days if you say you will pay by PayTm they just give you blank stare and ask you to come back by cash.

nkskalyan 9y ago

Question is, was it worth it? Weren't there easier ways to increase Digital payments? Better ways to make people put money into banks? Was it worth killing people? http://www.huffingtonpost.in/2016/11/17/day-9-demonetisation-death-toll-rises-to-55_a_21608769/ http://www.huffingtonpost.in/2016/11/17/day-9-demonetisation...

anigbrowl 9y ago
'Killing people' makes it sounds like they were shooting anyone who objected, but that article does do a good job of documenting the human cost of economic dislocation. The abrupt and absolute change appears to have given rise to numerous avoidable problems.
dman 9y ago
Was it worth extending the status quo where around 1 percent of the population pays any tax at all because of the rampant black market economy? (12.5 million people paid any tax at all on a population of 1.23 billion, source - https://www.cnbc.com/2016/05/03/guess-how-many-people-pay-taxes-in-india.html https://www.cnbc.com/2016/05/03/guess-how-many-people-pay-ta...).

gordon_freeman 9y ago

This. I think the headline title here is wrong. Prime Minister Modi has always said that demonetisation of Rs. 500 and Rs. 1000 is just the beginning and Step #1. The next step is to probe the bank accounts of these wealthy individuals and give them an opportunity to explain why the Tax has not been paid on it before seizing it.

kinkrtyavimoodh 9y ago
Unfortunately PM Modi and his government have been constantly shifting the goalposts. In the beginning they did promise demonetization as a way to render all black money null.
- vikiomega9 9y ago
  Isn't auditing for tax purposes a means of annulling black money?
  - kinkrtyavimoodh 9y ago
    It is, but the initial claim was that this would basically convert the millions of rupees of black money that's hidden away into worthless paper. That was the promise on which millions of poor Indians were asked to stand in long lines—that even if it inconveniences them, it would inconvenience the rich and corrupt even more. Clearly that did not happen.
    - grwthckrmstr 9y ago
      The unfortunate truth, I hope I don't get hate for saying it here, is that those poor people who need the money the most suffered, and even died during the demonetisation exercise http://mashable.com/2016/11/16/india-people-dying-demonetization/ http://mashable.com/2016/11/16/india-people-dying-demonetiza...

snambi 9y ago

Recently I heard that a guy owned 100 trucks is selling his house for quite a low price. Probably lost a chunk of stashed black money. Well, this seems like the effect of demonetization. This is great. The thieves do deserve this.

statguy 9y ago
That is just one anecdote. OTOH 103 people died in the process, productivity was lost by people standing in lines all day, GDP growth declined by over 2%, RBI's credibility has been destroyed. Sure, some rich suffered, but many more poor lost their livelihood.
- harigov 9y ago
  Just out of curiosity, what makes you think RBI credibility is destroyed? Indian Rupee seems to be faring well compared to other currencies. Do you have any data around poor losing their livelihood? Last time I checked, street-side vendors continued selling stuff. Most poor people would rarely deal with 500/1000 so I don't know where is this coming from.
  - statguy 9y ago
    A simple google search gets you RBI loosing its credibility: http://www.hindustantimes.com/analysis/post-demonetisation-rbi-s-credibility-has-been-whittled-down/story-OoKW72YVxsp5LxprxREo2J.html http://www.hindustantimes.com/analysis/post-demonetisation-r... http://indianexpress.com/article/business/banking-and-finance/reserve-bank-of-india-demonetisation-urjit-patel-finance-ministry-the-disquieting-silence-of-the-rbi-4474662/ http://indianexpress.com/article/business/banking-and-financ... > This has led to people such as former prime minister Manmohan Singh (himself a former RBI chief), former finance minister P Chidambaram, and former RBI governors Y V Reddy and Bimal Jalan raising concerns about the “harm” to the RBI’s “credibility” and talking of the “institutional damage” it has “suffered” in the process. http://www.mydigitalfc.com/my-world/rbi-row-oppn-slams-govt-destroying-credibility-autonomous-body http://www.mydigitalfc.com/my-world/rbi-row-oppn-slams-govt-... > “I don’t think ever before, the employees of a government institution especially an independent and respectable institution like RBI have written against its national policy. Very clearly RBI has compromised to an extent never ever before. Prime Minister Modi and his government have destroyed RBI, its credibility and the role of an institution,” Congress leader Sandeep Dikshit told ANI. Poor loosing jobs https://thewire.in/157093/1-5-million-jobs-lost-2017-demonetisation/ https://thewire.in/157093/1-5-million-jobs-lost-2017-demonet... http://indianexpress.com/article/india/demonetisation-35-per-cent-job-losses-50-per-cent-revenue-dip-says-study-by-largest-organisation-of-manufacturers-4465524/ http://indianexpress.com/article/india/demonetisation-35-per... https://twitter.com/r0h1n/status/885774769622196224 https://twitter.com/r0h1n/status/885774769622196224

kamaal 9y ago

>>This is the important part, money coming back to the system doesn't mean people can get away with it. Nobody with big money worth chasing after deposited money in the banks. There are some real estate developers who preferred to throw money in lakes than give it back to the government. >>An elaborate exercise is going on and I read multiple stories where the tax dept is sending notices to people with dubious deposits. Basically any body smart enough to put it back into the bank has long covered their tracks. Also it will take forever given the population scale. >>Digital payments certainly went up, people started using bank accounts. Temporarily, I'm back to DeMo days. People and shops around me too. These days if you say you will pay by PayTm they just give you blank stare and ask you to come back by cash.