7 ms·

Demonetization as a black money magic wand is a public face. The following is the other side of the coin, the following as narrated by a banker friend 1. Banks

Demonetization as a black money magic wand is a public face. The following is the other side of the coin, the following as narrated by a banker friend 1. Banks were at a historical low in availability of currency in the system due to bad money hoarding and non performing assets. Dangerously near collapse. Demo as the report points out has brought so much money back into the banking system and successfully overturned this. 2. Prior to demo. the capital in the stock market was dominated by FII (foreign institutional investors) almost 70%. This resulted in volatility and the Indian economy being vulnerable to external influence. Now the table has turned, the capital in the market is predominantly from the Indian banking system leading to greater stability. 3. Now that money is inside the system,anyone who has tried to take money out in cash beyond 5000 USD knows how difficult to near impossible it is now. This is the real effect on bad money, generation is now so damn difficult! 4. Anyone honest who has tried to buy a home from big realty developers in India recently would be pleasantly surprised that now you have to purchase it with good money and also pay proper GST tax for it. Before demo this was one major area of bad money generation. It is as good as dead now. Recent reports on the huge huge increase in GST tax revenue increase is a proof. 5. Good and bad currency sweeping back into the system (Gov allowed conversion also) has effectively nullified the funding of militancy and the fact that from demo the country has not seen any terrorist actions is a possible indicator. 6. Whether you like it or not one more area which encouraged bad money circulation was evangelism (convert to christianity for money) and that is one more area that also been severely impacted. Most US media outlets want to feed the stereotyped view of India and jump at any chance to do that. Most people who cry against demo are those who do it, just because they dislike Modi as a person (not a very charismatic personality). They would not be able to substantiate how they were personally impacted.

kranner 8y ago
> Most US media outlets want to feed the stereotyped view of India and jump at any chance to do that. You have no way to prove this. > Most people who cry against demo are those who do it, just because they dislike Modi as a person (not a very charismatic personality). You have no way to prove this. Also see No True Scotsman fallacy. > They would not be able to substantiate how they were personally impacted. You are implying nobody was actually impacted. And yet the economy lost a percentage point in GDP growth. The people that were the most impacted were people in blue collar jobs, and they are not on HN.
intended 8y ago
Experts and anyone who understands this disagree. If demo was any good you would see such exercises all over the world on a regular basis. IndianBanks are in bad shape because of loans they have made and have to continue to make to politically connected individuals. This affects state banks mind you - private banks never has that problem. As Raghuram Rajan pointed out, the reason banks can’t make loans is because many firms have terrible credit. That’s what makes loans unaffordable to them. And as current reports show - All of that money is back in circulation - so the banks are back to square one. 2 - if someone is telling you this, then they are confusing matters and are misunderstanding trade. 1) Volatility will always exist 2) foreign investments are something we want because trade and more resources makes our economy grow much faster Additionally: black money is a misnomer - it’s money on which tax has not been paid. A large portion of India’s economy is informal, and entirely cash based AND also below the taxable slabs - this is OK. It’s a transition point for an economy as it goes from 1970 to 2030. What people are upset about are corrupt people who cheat the system and then launder that money. All black money is therefore not corruption. But demo has not stopped corruption, and even during demo the corrupt found out ways to launder their money. Not to mention none of this was free and necessitated a shut down of the entire economy - for nothing. This move cost us billions in opportunity cost. The mint wasn’t ready or warned, highlighting how unplanned this entire move was. People died And in the end nothing happened All of those goals could be achieved correctly and more effectively.
- 1024core 8y ago
  > If demo was any good you would see such exercises all over the world on a regular basis. Most countries of the world don't have the black money problem that India does; and of those that do (many third-world countries) there is no will to crack down on black money.
  - ch4nd4n 8y ago
    Russia and China have more than India. I believe they haven't used demonetisation.
- thevardanian 8y ago
hitr 8y ago
As i would like to believe all this is true, and initailly supported this movement with my wholeheart ,later it occured to me that the only reason they did this is for UP election. Why i think so ? The then reserve bank governor did not even know about this plan of Modi's nor in agreement to this.So the banker friend told this but not reserve bank governor. That's a boatload of made up story to back otherwise political motive.
- deleted 8y ago
  [deleted]
- kubernet 8y ago
  Yes, I agree with your observation in part and full :) And probably it may be a net positive considering that UP was ruled by two family-owned extremely corrupt political parties...
  - statguy 8y ago
    Now it is ruled by a firebrand hindu priest who was on stage while one of his associates exhorted the crowd to dig up corpses of Muslim women and rape them.
    - kubernet 8y ago
      Is this his statement or view? Is the "associate" part of his government? Maybe a "firebrand Hindu priest" follows the Rajya Dharma! A proper citation would have helped...
      - statguy 8y ago
        http://www.bbc.com/news/world-asia-india-39403778 http://www.bbc.com/news/world-asia-india-39403778
        kubernet 8y ago
        BBC has a very biased view: https://en.m.wikipedia.org/wiki/Criticism_of_the_BBC https://en.m.wikipedia.org/wiki/Criticism_of_the_BBC Rest of the question, I couldn't find the answer in the earlier BBC link though. I abhor these thoughts and don't justify the association though.
godelmachine 8y ago
For me, your answer started picking steam from 4th point onwards.
- mayankkaizen 8y ago
  Most people here won't get it but for Indians, it is very obvious OP is a staunch Modi supporter.
  - sbmthakur 8y ago
    Anything wrong with it?
    - ahamedirshad123 8y ago
      Blind bhakti is
      - godelmachine 8y ago
        Please go through community guidelines, especially "In Comments" section. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    - mayankkaizen 8y ago
      This clouds your judgment. If Modi does something wrong, his supporters wouldn't see this wrong. They would defend it. Recently, Modi told a story about making tea with gas from gutter. His story was pure lie. Every sensible person knew it. But his supporters nevertheless defended him. This was pathetic.
duxup 8y ago
>evangelism (convert to christianity for money) Is that ... really common in India?
- mayankkaizen 8y ago
  Yes. The target demography is backward cast people and tribal people who are more or less disconnected from a mainstream society. Obviously they are extremely poor but it is more about social acceptance. Once converted, they feel like their social status has become higher or they have become part of better community. On Christmas and other christian festivals, I personally noticed surprisingly large number of 'poor' people attending church prayers. And I found out they were all converted (though not sure about the extent money played a role). Depending on the region, such conversion may or may not face any backlash.
  - j0e1 8y ago
    Please don't make claims that are backed by your anecdotal experience of noticing people attending churches. I find this ridiculous. Though I don't deny there have been such cases reported in the past, to say some groups attend church because of money is unfounded and adds fuel to the fire by worsening the already tense religious atmosphere [1] the Modi govt. has created and based its campaign on. I really wish the govt would show more interest in the plight of the 'lower' caste rather than just seeing them as a vote bank. [1] https://www.theguardian.com/world/2015/feb/24/india-modi-religious-freedom-tolerance https://www.theguardian.com/world/2015/feb/24/india-modi-rel...
    - Ar-Curunir 8y ago
      Evangelicals absolutely do target poorer communities in non-Western countries across the world, this has been the modus operandi of Christianity for the last 3+ centuries. This strategy went hand-in-hand with colonialism, with both being things that were "good" for the uncivilized natives. As for evidence of conversions for money/material goods, here's a couple of links for you to browse at your own pace: https://www.dnaindia.com/india/report-meerut-priest-tries-to-convert-17-hindus-into-christianity-by-offering-money-arrested-2626908/ https://www.dnaindia.com/india/report-meerut-priest-tries-to... https://amp.theguardian.com/global-development/2017/aug/15/they-use-money-to-promote-christianity-nepal-battle-for-souls https://amp.theguardian.com/global-development/2017/aug/15/t... https://m.huffpost.com/us/entry/4470448 https://m.huffpost.com/us/entry/4470448 https://blogs.economictimes.indiatimes.com/et-commentary/conversion-a-new-breed-of-evangelical-groups-that-are-like-hyper-growth-startups/ https://blogs.economictimes.indiatimes.com/et-commentary/con...
sumedh 8y ago
> Most people who cry against demo are those who do it, just because they dislike Modi as a person No not really, people are crying because messing with money happens in banana republics, I thought India was better. > They would not be able to substantiate how they were personally impacted. I personally lost 10,000 Rs because I dont want to go to India to exchange the notes, who is going to reimburse me when the govt steals my hard earned money?
dpacmittal 8y ago
It's sad to see this as top comment. Banks have low funds, so you force the public to return their own cash. That doesn't solve the underlying problem of NPAs and public banks not being managed properly. Also, FYI, RBI recently reported the cash in circulation right now is more than it was before the demo. Increase in tax collection is great, but it's due to GST, let's not give credit to demo for that. Yes it did some good, definitely, but have you seen how bad the situation got. I'm not sure if you've lived in a tier 3 city during the demo times but I've seen the plight of people. It was ridiculously stupid to just ban cash in an 80% cash society where majority of the small businesses (who bring in >30% of tax revenue) depend on cash. People died, lakhs of businesses shut down, multiple factories shut down where they depended on cash to pay daily wages. Lakhs of jobs lost. GDP taking a solid 2% dive. So you're saying all this was worth it? Ground realities are very different from what your comment portrays.
- puranjay 8y ago
  Even in Delhi, cash was extremely difficult to get. I was lucky since a close friend lived in a gated State Bank colony that had its own ATM that few outside knew about. I could withdraw cash easily the day it was filled. Had to lend money to people just so they could buy bread, milk and eggs. It was a common sight to see people lining up outside ATMs at 2 in the night just to withdraw cash they earned through their hard work. If this was meant to solve the "black money" issue, it was akin to using a flamethrower to kill an ant. The collateral damage was way, way too high
- intended 8y ago
  How did it do good? If you burnt the house down, and said "look, I killed the rats" would anyone in their right mind tell you "hey you did good?"
dpacmittal 8y ago
Did your banker friend tell you that bank employees were supposed to pay fines for whatever counting mistakes they did while being overworked and underslept? Did your banker friend tell you that most people in queue were not millionaires but laborers and mostly people who didn't even fall under a tax bracket. Did he tell you people couldn't withdraw money for months? Their own hard earned money. Not govt money, their own hard earned white money was locked up in banks. RBI governor wasn't even in support of this decision so he was kicked out. Like how low can all this really get? Doesn't all this sound like a dictatorship to you?
- sseth 8y ago
  Actually no, it doesn't sound like dictatorship - an elected prime minister making decisions seems the right thing, generally. You would think this is the first time a government pressured an RBI governor. I should add that he wasn't kicked out - his term was not renewed. What did look like dictatorship to me was a prince tearing up a government ordinance and the poor PM running around trying to appease him. Or a queen pulling strings from behind with her own unaccountable "cabinet" - the NAC. Or the parcelling out of government departments among partners to loot the country. That is as low as it can get.
  - statguy 8y ago
    It sounds exactly like a dictatorship. A prime minister with little to no economic knowledge (heck he doesn't even have an undergraduate degree) making a far reaching policy decision on the advice of a charlatan economist along with a few cronies, while keeping the MIT educated central bank chief in the dark.
    - sseth 8y ago
      I am a great fan of Raghuram Rajan, and used to be one of Manmohan Singh as well. But Manmohan Singh's reign as PM can only be counted as an unmitigated disaster, his economic credentials notwithstanding. The huge NPA crisis that you see now happened under his watch. The Air India deal, the 2G scam etc etc. It is conveniently forgotten for example, that under Manmohan Singh in 2010 the congress government declared that more bank licenses will be given out, flatly contradicting the RBI whose job it is to issue these licenses. By the standards we are holding this government to, almost any government prior to this would be called a dictatorship.
JumpCrisscross 8y ago
> the capital in the market is predominantly from the Indian banking system Indian banks' foreign currency assets have ballooned since demonetization [1], the principal source of which has been FDI. Long story short, Indian bankers' share of the economy grew by sacrificing the country's balance of payments. As an American investor who knows many wealthy Indians: (1) demonetization was a boon to the wealthy in India, as it provided them with cover under which to move money and (2) the entire exercise has been destructive to the soundness of India's economy. Fortunately, the world economy is growing, so the country has time to mend. But this was a bone-headed move, albeit an expertly-marketed one. [1] https://rbi.org.in/Scripts/PublicationsView.aspx?id=18271 https://rbi.org.in/Scripts/PublicationsView.aspx?id=18271
- simonh 8y ago
  Counterproductive economic policy, wrapped in popular rhetoric, but which largely hurts the base of the politician doing it most. Huh. It’ll never catch on.
mayankkaizen 8y ago
Indian here. All of these arguments are parrot-repeating-cliches kind of arguments made by Modi supporters in India. Read his last para - >Most people who cry against demo are those who do it, just because they dislike Modi as a person (not a very charismatic personality). They would not be able to substantiate how they were personally impacted. This is not how someone makes an argument. This is just a political statement. Also this para - >Most US media outlets want to feed the stereotyped view of India and jump at any chance to do that I'd say this is possibly a valid argument but this argument has been repeated so many times (esp in last 4 years) that it has become more of an excuse to discount/discredit every criticism. Ironically, stereotyping India is on the decrease but accusing western media of stereotyping India is on the increase (esp among right wing section. ) >Whether you like it or not one more area which encouraged bad money circulation was evangelism (convert to christianity for money) and that is one more area that also been severely impacted. This is how right wing Hindu nationalists (Modi followers) look at everything these days. You talk quantum mechanics to them and they will tell you the knowledge of QM is already there in Vedas. Though religious conversion is a fact but the scale is relatively small and money involved (when comparing to the scale of demo) was also very small. And even after demo, this money was available within few months. > Good and bad currency sweeping back into the system (Gov allowed conversion also) has effectively nullified the funding of militancy and the fact that from demo the country has not seen any terrorist actions is a possible indicator. Poor guy. What a big white lie. Anyone can check the stats. The numbers of Indian army personnels casualties are far greater as compared to pre Modi era. All of his arguments can be easily debunked. The fact is that not a single person from lower middle class/elite clads stood in a queue outside a bank to exchange/deposit money. And no one went bankrupt. Only people from extremely lower economic class suffered badly. Many even died. And we don't hear their stories.
_mdlf 8y ago
>narrated by a banker friend BS. This is a right wing fundamentalist template cooked to save the face from pathetic failure of demonetisation. As other commentators pointed out, it was underprivileged people who were most affected by this preposterous nonsense. 1. Poor people died of starvation, standing in queues at ATM i.e if they had a bank account in first place. [Only 53% had bank accounts as of 2014 & much of it was inactive] & mental agony of loosing their life long savings. 2. Privileged people exchanged their demonetized unaccounted money to new one's by bribing bankers & by forcing under privileged people to do it under their names. 3. Paytm (India's leading payment wallet) grew over 1000% in revenue with demonetisation running full front paged ads featuring the prime minister.
puranjay 8y ago
Even if you assume your points are true, was shutting down the economy for 3 months (the effects of which are still palpable), letting dozens of people die, and creating widespread distrust in the government really the only way to go about it?
- sseth 8y ago
  Widespread distrust which resulted in a thumping win for the government? Shutting down the economy... seriously? I was in the economy, it did not seem shut. Unfortunately the outrage seems manufactured, like so much outrage nowadays.
willwinger 8y ago
Hmm... really surprised at all the responses, chill guys it's just a comment! Ok, for those who are throwing stereotypes around, here is a bit to chew on 1. I am from Tamilnadu, a southern state in India. A proud Tamil Indian from a middle class background. My father was a govt. employee and is a staunch anti Modi :-) oh also I am not a Tam.Bhram. 2. Modi wave is not a fact in Tamilnadu, similar to other southern states. I think it is difficult for any Hindi speaker to truly gain support. Arghh! Hindi! ;-) 3. I studied in a Christian Society of India school, am a Hindu but I know the difference between serving as a Christian and selling Christianity for money 4. I successfully exited my startup with 5x returns for my investors. As a startup founder I first hand experienced the govt. machinery and can vouch that being an entrepreneur in India is still difficult even after many reforms. 5. However 2 yrs back, the IT dept actually refunded me for 15lakhs without any follow up or bribe, the cheque actually came by mail, can you believe! The govt is putting all efforts to make the system non personal and digitized which has a huge effect on bribes. Bribes thrive where there is subjectivity and misinformation, automate it and you have bribe gasping for air. So that's it, sorry for disappointing your stereotype assumption on me.
- ahamedirshad123 8y ago
  நம்பிட்டோம்
  - willwinger 8y ago
    என்ன பாய் டெஸ்ட் பண்றிங்களா? எந்த ஊரு? நாகை தெரியுமா? நாகூர் வந்து இருக்கீங்களா?
- calvinbhai 8y ago
  Thanks for sharing this and shattering many stereotypes :) Great to see such comments! Its kinda funny to see that many people, whether they are pro or anti Modi expected overnight results for any actions taken. Many SMB type companies are ecstatic that refunds are automated. Sadly, for those who have no idea or information about such improvements, they'll only see the failures of such moves.
t3ra 8y ago
Oh IT cell actually reads tech news?
TheArcane 8y ago
Did you actually just cite point 6 as a defence of Demonetisation? Shows how desperate the search for a justification of a horrible and rash public policy decision which costed lives, time and money has become.
tmbsundar 8y ago
>> Demonetization as a black money magic wand is a public face. Pls check out my comment: https://news.ycombinator.com/item?id=17901835 https://news.ycombinator.com/item?id=17901835 linking this article (which argues, among other things, that "all money back" does not = no black money): https://indianexpress.com/article/opinion/columns/demonetisation-rbi-nda-2019-lok-sabha-elections-not-a-question-of-cash-5334470/ https://indianexpress.com/article/opinion/columns/demonetisa... Excerpt from the above link: >> I remember arguing in one of my articles that I wished all the cash was returned to the banks. Why? Because such people will be identified and will have to face the consequences of gaming the system. This is a long litigious process but major hints of the magnitude of black money involved (that was not supposed to be returned) is high. In his February 1, 2017 budget speech, Finance Minister Arun Jaitley stated the following: “After the demonetisation, the preliminary analysis of data received in respect of deposits made by people in old currency presents a revealing picture. Deposits of more than Rs 80 lakh were made in 1.48 lakh accounts with average deposit size of Rs 3.31 crores.” (Para 142). Let us reflect on these data. Just after demonetisation, and even over the last few days, a lot of experts continue to opine that demonetisation was doomed to failure because “No one hordes black money in cash”. Just think about it — Rs 3.31 crore was approximately $5,00,000 (2017 exchange rate) and there are 1,48,000 such individuals. There are not that many Colombian drug lords who individually keep $5,00,000 in cash. In the aggregate, this cash — and it is reported to be cash — is close to Rs 5 trillion. How far is this number from the Rs 2-3 trillion that was supposed to not come back? It maybe the case that most of us made a very conservative estimate of black cash in the Indian economy.

kranner 8y ago

> Most US media outlets want to feed the stereotyped view of India and jump at any chance to do that. You have no way to prove this. > Most people who cry against demo are those who do it, just because they dislike Modi as a person (not a very charismatic personality). You have no way to prove this. Also see No True Scotsman fallacy. > They would not be able to substantiate how they were personally impacted. You are implying nobody was actually impacted. And yet the economy lost a percentage point in GDP growth. The people that were the most impacted were people in blue collar jobs, and they are not on HN.

intended 8y ago

Experts and anyone who understands this disagree. If demo was any good you would see such exercises all over the world on a regular basis. IndianBanks are in bad shape because of loans they have made and have to continue to make to politically connected individuals. This affects state banks mind you - private banks never has that problem. As Raghuram Rajan pointed out, the reason banks can’t make loans is because many firms have terrible credit. That’s what makes loans unaffordable to them. And as current reports show - All of that money is back in circulation - so the banks are back to square one. 2 - if someone is telling you this, then they are confusing matters and are misunderstanding trade. 1) Volatility will always exist 2) foreign investments are something we want because trade and more resources makes our economy grow much faster Additionally: black money is a misnomer - it’s money on which tax has not been paid. A large portion of India’s economy is informal, and entirely cash based AND also below the taxable slabs - this is OK. It’s a transition point for an economy as it goes from 1970 to 2030. What people are upset about are corrupt people who cheat the system and then launder that money. All black money is therefore not corruption. But demo has not stopped corruption, and even during demo the corrupt found out ways to launder their money. Not to mention none of this was free and necessitated a shut down of the entire economy - for nothing. This move cost us billions in opportunity cost. The mint wasn’t ready or warned, highlighting how unplanned this entire move was. People died And in the end nothing happened All of those goals could be achieved correctly and more effectively.

1024core 8y ago
> If demo was any good you would see such exercises all over the world on a regular basis. Most countries of the world don't have the black money problem that India does; and of those that do (many third-world countries) there is no will to crack down on black money.
- ch4nd4n 8y ago
  Russia and China have more than India. I believe they haven't used demonetisation.
thevardanian 8y ago

hitr 8y ago

As i would like to believe all this is true, and initailly supported this movement with my wholeheart ,later it occured to me that the only reason they did this is for UP election. Why i think so ? The then reserve bank governor did not even know about this plan of Modi's nor in agreement to this.So the banker friend told this but not reserve bank governor. That's a boatload of made up story to back otherwise political motive.

deleted 8y ago
[deleted]
kubernet 8y ago
Yes, I agree with your observation in part and full :) And probably it may be a net positive considering that UP was ruled by two family-owned extremely corrupt political parties...
- statguy 8y ago
  Now it is ruled by a firebrand hindu priest who was on stage while one of his associates exhorted the crowd to dig up corpses of Muslim women and rape them.
  - kubernet 8y ago
    Is this his statement or view? Is the "associate" part of his government? Maybe a "firebrand Hindu priest" follows the Rajya Dharma! A proper citation would have helped...
    - statguy 8y ago
      http://www.bbc.com/news/world-asia-india-39403778 http://www.bbc.com/news/world-asia-india-39403778
      - kubernet 8y ago
        BBC has a very biased view: https://en.m.wikipedia.org/wiki/Criticism_of_the_BBC https://en.m.wikipedia.org/wiki/Criticism_of_the_BBC Rest of the question, I couldn't find the answer in the earlier BBC link though. I abhor these thoughts and don't justify the association though.

godelmachine 8y ago

For me, your answer started picking steam from 4th point onwards.

mayankkaizen 8y ago
Most people here won't get it but for Indians, it is very obvious OP is a staunch Modi supporter.
- sbmthakur 8y ago
  Anything wrong with it?
  - ahamedirshad123 8y ago
    Blind bhakti is
    - godelmachine 8y ago
      Please go through community guidelines, especially "In Comments" section. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - mayankkaizen 8y ago
    This clouds your judgment. If Modi does something wrong, his supporters wouldn't see this wrong. They would defend it. Recently, Modi told a story about making tea with gas from gutter. His story was pure lie. Every sensible person knew it. But his supporters nevertheless defended him. This was pathetic.

duxup 8y ago

>evangelism (convert to christianity for money) Is that ... really common in India?

mayankkaizen 8y ago
Yes. The target demography is backward cast people and tribal people who are more or less disconnected from a mainstream society. Obviously they are extremely poor but it is more about social acceptance. Once converted, they feel like their social status has become higher or they have become part of better community. On Christmas and other christian festivals, I personally noticed surprisingly large number of 'poor' people attending church prayers. And I found out they were all converted (though not sure about the extent money played a role). Depending on the region, such conversion may or may not face any backlash.
- j0e1 8y ago
  Please don't make claims that are backed by your anecdotal experience of noticing people attending churches. I find this ridiculous. Though I don't deny there have been such cases reported in the past, to say some groups attend church because of money is unfounded and adds fuel to the fire by worsening the already tense religious atmosphere [1] the Modi govt. has created and based its campaign on. I really wish the govt would show more interest in the plight of the 'lower' caste rather than just seeing them as a vote bank. [1] https://www.theguardian.com/world/2015/feb/24/india-modi-religious-freedom-tolerance https://www.theguardian.com/world/2015/feb/24/india-modi-rel...
  - Ar-Curunir 8y ago
    Evangelicals absolutely do target poorer communities in non-Western countries across the world, this has been the modus operandi of Christianity for the last 3+ centuries. This strategy went hand-in-hand with colonialism, with both being things that were "good" for the uncivilized natives. As for evidence of conversions for money/material goods, here's a couple of links for you to browse at your own pace: https://www.dnaindia.com/india/report-meerut-priest-tries-to-convert-17-hindus-into-christianity-by-offering-money-arrested-2626908/ https://www.dnaindia.com/india/report-meerut-priest-tries-to... https://amp.theguardian.com/global-development/2017/aug/15/they-use-money-to-promote-christianity-nepal-battle-for-souls https://amp.theguardian.com/global-development/2017/aug/15/t... https://m.huffpost.com/us/entry/4470448 https://m.huffpost.com/us/entry/4470448 https://blogs.economictimes.indiatimes.com/et-commentary/conversion-a-new-breed-of-evangelical-groups-that-are-like-hyper-growth-startups/ https://blogs.economictimes.indiatimes.com/et-commentary/con...

sumedh 8y ago

> Most people who cry against demo are those who do it, just because they dislike Modi as a person No not really, people are crying because messing with money happens in banana republics, I thought India was better. > They would not be able to substantiate how they were personally impacted. I personally lost 10,000 Rs because I dont want to go to India to exchange the notes, who is going to reimburse me when the govt steals my hard earned money?

dpacmittal 8y ago

It's sad to see this as top comment. Banks have low funds, so you force the public to return their own cash. That doesn't solve the underlying problem of NPAs and public banks not being managed properly. Also, FYI, RBI recently reported the cash in circulation right now is more than it was before the demo. Increase in tax collection is great, but it's due to GST, let's not give credit to demo for that. Yes it did some good, definitely, but have you seen how bad the situation got. I'm not sure if you've lived in a tier 3 city during the demo times but I've seen the plight of people. It was ridiculously stupid to just ban cash in an 80% cash society where majority of the small businesses (who bring in >30% of tax revenue) depend on cash. People died, lakhs of businesses shut down, multiple factories shut down where they depended on cash to pay daily wages. Lakhs of jobs lost. GDP taking a solid 2% dive. So you're saying all this was worth it? Ground realities are very different from what your comment portrays.

puranjay 8y ago
Even in Delhi, cash was extremely difficult to get. I was lucky since a close friend lived in a gated State Bank colony that had its own ATM that few outside knew about. I could withdraw cash easily the day it was filled. Had to lend money to people just so they could buy bread, milk and eggs. It was a common sight to see people lining up outside ATMs at 2 in the night just to withdraw cash they earned through their hard work. If this was meant to solve the "black money" issue, it was akin to using a flamethrower to kill an ant. The collateral damage was way, way too high
intended 8y ago
How did it do good? If you burnt the house down, and said "look, I killed the rats" would anyone in their right mind tell you "hey you did good?"

dpacmittal 8y ago

Did your banker friend tell you that bank employees were supposed to pay fines for whatever counting mistakes they did while being overworked and underslept? Did your banker friend tell you that most people in queue were not millionaires but laborers and mostly people who didn't even fall under a tax bracket. Did he tell you people couldn't withdraw money for months? Their own hard earned money. Not govt money, their own hard earned white money was locked up in banks. RBI governor wasn't even in support of this decision so he was kicked out. Like how low can all this really get? Doesn't all this sound like a dictatorship to you?

sseth 8y ago
Actually no, it doesn't sound like dictatorship - an elected prime minister making decisions seems the right thing, generally. You would think this is the first time a government pressured an RBI governor. I should add that he wasn't kicked out - his term was not renewed. What did look like dictatorship to me was a prince tearing up a government ordinance and the poor PM running around trying to appease him. Or a queen pulling strings from behind with her own unaccountable "cabinet" - the NAC. Or the parcelling out of government departments among partners to loot the country. That is as low as it can get.
- statguy 8y ago
  It sounds exactly like a dictatorship. A prime minister with little to no economic knowledge (heck he doesn't even have an undergraduate degree) making a far reaching policy decision on the advice of a charlatan economist along with a few cronies, while keeping the MIT educated central bank chief in the dark.
  - sseth 8y ago
    I am a great fan of Raghuram Rajan, and used to be one of Manmohan Singh as well. But Manmohan Singh's reign as PM can only be counted as an unmitigated disaster, his economic credentials notwithstanding. The huge NPA crisis that you see now happened under his watch. The Air India deal, the 2G scam etc etc. It is conveniently forgotten for example, that under Manmohan Singh in 2010 the congress government declared that more bank licenses will be given out, flatly contradicting the RBI whose job it is to issue these licenses. By the standards we are holding this government to, almost any government prior to this would be called a dictatorship.

JumpCrisscross 8y ago

> the capital in the market is predominantly from the Indian banking system Indian banks' foreign currency assets have ballooned since demonetization [1], the principal source of which has been FDI. Long story short, Indian bankers' share of the economy grew by sacrificing the country's balance of payments. As an American investor who knows many wealthy Indians: (1) demonetization was a boon to the wealthy in India, as it provided them with cover under which to move money and (2) the entire exercise has been destructive to the soundness of India's economy. Fortunately, the world economy is growing, so the country has time to mend. But this was a bone-headed move, albeit an expertly-marketed one. [1] https://rbi.org.in/Scripts/PublicationsView.aspx?id=18271 https://rbi.org.in/Scripts/PublicationsView.aspx?id=18271

simonh 8y ago
Counterproductive economic policy, wrapped in popular rhetoric, but which largely hurts the base of the politician doing it most. Huh. It’ll never catch on.

mayankkaizen 8y ago

Indian here. All of these arguments are parrot-repeating-cliches kind of arguments made by Modi supporters in India. Read his last para - >Most people who cry against demo are those who do it, just because they dislike Modi as a person (not a very charismatic personality). They would not be able to substantiate how they were personally impacted. This is not how someone makes an argument. This is just a political statement. Also this para - >Most US media outlets want to feed the stereotyped view of India and jump at any chance to do that I'd say this is possibly a valid argument but this argument has been repeated so many times (esp in last 4 years) that it has become more of an excuse to discount/discredit every criticism. Ironically, stereotyping India is on the decrease but accusing western media of stereotyping India is on the increase (esp among right wing section. ) >Whether you like it or not one more area which encouraged bad money circulation was evangelism (convert to christianity for money) and that is one more area that also been severely impacted. This is how right wing Hindu nationalists (Modi followers) look at everything these days. You talk quantum mechanics to them and they will tell you the knowledge of QM is already there in Vedas. Though religious conversion is a fact but the scale is relatively small and money involved (when comparing to the scale of demo) was also very small. And even after demo, this money was available within few months. > Good and bad currency sweeping back into the system (Gov allowed conversion also) has effectively nullified the funding of militancy and the fact that from demo the country has not seen any terrorist actions is a possible indicator. Poor guy. What a big white lie. Anyone can check the stats. The numbers of Indian army personnels casualties are far greater as compared to pre Modi era. All of his arguments can be easily debunked. The fact is that not a single person from lower middle class/elite clads stood in a queue outside a bank to exchange/deposit money. And no one went bankrupt. Only people from extremely lower economic class suffered badly. Many even died. And we don't hear their stories.

_mdlf 8y ago

>narrated by a banker friend BS. This is a right wing fundamentalist template cooked to save the face from pathetic failure of demonetisation. As other commentators pointed out, it was underprivileged people who were most affected by this preposterous nonsense. 1. Poor people died of starvation, standing in queues at ATM i.e if they had a bank account in first place. [Only 53% had bank accounts as of 2014 & much of it was inactive] & mental agony of loosing their life long savings. 2. Privileged people exchanged their demonetized unaccounted money to new one's by bribing bankers & by forcing under privileged people to do it under their names. 3. Paytm (India's leading payment wallet) grew over 1000% in revenue with demonetisation running full front paged ads featuring the prime minister.

puranjay 8y ago

Even if you assume your points are true, was shutting down the economy for 3 months (the effects of which are still palpable), letting dozens of people die, and creating widespread distrust in the government really the only way to go about it?

sseth 8y ago
Widespread distrust which resulted in a thumping win for the government? Shutting down the economy... seriously? I was in the economy, it did not seem shut. Unfortunately the outrage seems manufactured, like so much outrage nowadays.

willwinger 8y ago

Hmm... really surprised at all the responses, chill guys it's just a comment! Ok, for those who are throwing stereotypes around, here is a bit to chew on 1. I am from Tamilnadu, a southern state in India. A proud Tamil Indian from a middle class background. My father was a govt. employee and is a staunch anti Modi :-) oh also I am not a Tam.Bhram. 2. Modi wave is not a fact in Tamilnadu, similar to other southern states. I think it is difficult for any Hindi speaker to truly gain support. Arghh! Hindi! ;-) 3. I studied in a Christian Society of India school, am a Hindu but I know the difference between serving as a Christian and selling Christianity for money 4. I successfully exited my startup with 5x returns for my investors. As a startup founder I first hand experienced the govt. machinery and can vouch that being an entrepreneur in India is still difficult even after many reforms. 5. However 2 yrs back, the IT dept actually refunded me for 15lakhs without any follow up or bribe, the cheque actually came by mail, can you believe! The govt is putting all efforts to make the system non personal and digitized which has a huge effect on bribes. Bribes thrive where there is subjectivity and misinformation, automate it and you have bribe gasping for air. So that's it, sorry for disappointing your stereotype assumption on me.

ahamedirshad123 8y ago
நம்பிட்டோம்
- willwinger 8y ago
  என்ன பாய் டெஸ்ட் பண்றிங்களா? எந்த ஊரு? நாகை தெரியுமா? நாகூர் வந்து இருக்கீங்களா?
calvinbhai 8y ago
Thanks for sharing this and shattering many stereotypes :) Great to see such comments! Its kinda funny to see that many people, whether they are pro or anti Modi expected overnight results for any actions taken. Many SMB type companies are ecstatic that refunds are automated. Sadly, for those who have no idea or information about such improvements, they'll only see the failures of such moves.

t3ra 8y ago

Oh IT cell actually reads tech news?

TheArcane 8y ago

Did you actually just cite point 6 as a defence of Demonetisation? Shows how desperate the search for a justification of a horrible and rash public policy decision which costed lives, time and money has become.

tmbsundar 8y ago

>> Demonetization as a black money magic wand is a public face. Pls check out my comment: https://news.ycombinator.com/item?id=17901835 https://news.ycombinator.com/item?id=17901835 linking this article (which argues, among other things, that "all money back" does not = no black money): https://indianexpress.com/article/opinion/columns/demonetisation-rbi-nda-2019-lok-sabha-elections-not-a-question-of-cash-5334470/ https://indianexpress.com/article/opinion/columns/demonetisa... Excerpt from the above link: >> I remember arguing in one of my articles that I wished all the cash was returned to the banks. Why? Because such people will be identified and will have to face the consequences of gaming the system. This is a long litigious process but major hints of the magnitude of black money involved (that was not supposed to be returned) is high. In his February 1, 2017 budget speech, Finance Minister Arun Jaitley stated the following: “After the demonetisation, the preliminary analysis of data received in respect of deposits made by people in old currency presents a revealing picture. Deposits of more than Rs 80 lakh were made in 1.48 lakh accounts with average deposit size of Rs 3.31 crores.” (Para 142). Let us reflect on these data. Just after demonetisation, and even over the last few days, a lot of experts continue to opine that demonetisation was doomed to failure because “No one hordes black money in cash”. Just think about it — Rs 3.31 crore was approximately $5,00,000 (2017 exchange rate) and there are 1,48,000 such individuals. There are not that many Colombian drug lords who individually keep $5,00,000 in cash. In the aggregate, this cash — and it is reported to be cash — is close to Rs 5 trillion. How far is this number from the Rs 2-3 trillion that was supposed to not come back? It maybe the case that most of us made a very conservative estimate of black cash in the Indian economy.