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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

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
>2) foreign investments are something we want because trade and more resources makes our economy grow much faster and >A large portion of India’s economy is informal, and entirely cash based AND also below the taxable slabs - this is OK. 50% of India's GDP is from the "informal" sector, and it employs something like 90% of Indians. So it's not just a "large portion". It is the majority. And it is this very informal sector that demonetization targeted so to formalize it. FDI makes a very small portion of GDP growth in India. >And as current reports show - All of that money is back in circulation - so the banks are back to square one. The money is back in circulation after people paying at least 50% tax if their cash was unaccounted for, but could range up to 200% penalty if the accounting was particularly shady. Which is why you see such a high deposit rate. People would rather see 50% of their cash than nothing. So "all" that money going back into the economy makes sense. Now the government has actually account of what is going on.
- kranner 8y ago
  > The money is back in circulation after people paying at least 50% tax if their cash was unaccounted for, but could range up to 200% penalty if the accounting was particularly shady. Which is why you see such a high deposit rate. People would rather see 50% of their cash than nothing. You should look at the actual number of prosecution claims and convictions by the Income Tax department and the number of instances wherein compounding was admitted (taxpayers admitted to hiding income and paid a penalty), before you call demonetisation a big success in this regard. Cases filed: 2225 Convictions: 48 Instances of compounding: 1052 Source: https://timesofindia.indiatimes.com/business/india-business/i-t-prosecution-cases-treble-in-2017-conviction-up-four-times/articleshow/62481108.cms https://timesofindia.indiatimes.com/business/india-business/... Also the voluntary income disclosure scheme of 2016 ran prior to demonetisation. Not many people signed up for that, but for whomever did so, it had nothing to do with demonetisation.
sbmthakur 8y ago
> And in the end nothing happened That's nonsense. Demonetization was a contributing factor in the following: * Increase in tax-payers * Increase in E-filling * Removal of fake currency * Crushing of Real-estate black market * Removal of shell companies * Decrease in funding of Naxalites and Kashmiri separatists Demo failed because the government didn't have a clear objective in the first place. Later they started shifting goal-posts to prove it as a success. However, saying that it acheived nothing is ignorance at best. > People died This is again nonsense. People are still dying in India due to the negligence of hospitals, civic officials etc. Blaming this on Demonetization doesn't make sense. Demonetization deserves to be criticized but the criticism should be objective and not just a mere reflection of opposition propaganda. Sources: https://www.livemint.com/Opinion/sH5FSnXPkuAhknhzuPgH3M/Demonetisation-and-the-fight-against-black-money.html https://www.livemint.com/Opinion/sH5FSnXPkuAhknhzuPgH3M/Demo... https://www.quora.com/99-3-demonetised-notes-came-back-concedes-Reserve-Bank-of-India-Does-this-mean-that-Modis-demonetisation-did-nothing-for-India https://www.quora.com/99-3-demonetised-notes-came-back-conce...
- kamaal 8y ago
  >>Crushing of Real-estate black market What goes on in peoples minds to believe in these things? Paint, Steel, Cement, Bathroom fittings, Tiles heck every single company that connects the RE market is on the stock exchange. You can't register a hut in the property registration office since a decade without a PAN number. And builders haven't been taking cash since more than a decade now. Where is this non-existent black money in the Real Estate market? Looks like people build fictional theories in their minds and then go enact rogue policies which ruin many other things as side effect.
  - sbmthakur 8y ago
    > You can't register a hut in the property registration office since a decade without a PAN number. And builders haven't been taking cash since more than a decade now. Where I stay(Mumbai suburb), taking some percentage of money as cash was always the norm. For example, for a flat worth 90 lakhs, you were expected to pay 60-75 lakhs in white and the rest in black(cash). This inflated the costs and many folks could not afford a flat due to this. It's mostly gone now thanks to RERA but Demo also played some part.
hakfoo 8y ago
>If demo was any good you would see such exercises all over the world on a regular basis. I wonder if it's mostly a logistics reason they don't do it often. To do it smoothly, you've got to produce and safeguard a mountain of currency, with a high degree of secrecy, and deploy it in short order when the demonetization is activated. It reminds me a lot of the 1962 replacement of the Hwan with the Won in South Korea. I get the impression this was a complete shock change (new Hwan notes were introduced less than a month prior to demonetization, and the replacements were produced abroad). They pulled it off only with a fair bit of challenge-- old coins got forced back into circulation, and several type of the new notes were replaced almost immediately, and this was in a country which had a tiny population and economy compared to India.
- intended 8y ago
  The don't do it because it doesn't work. What works is vigilance, expenditure on policing, courts and the creation of civilized systems. Which takes time, sacrifice and independent police forces/strong judiciaries.

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

>2) foreign investments are something we want because trade and more resources makes our economy grow much faster and >A large portion of India’s economy is informal, and entirely cash based AND also below the taxable slabs - this is OK. 50% of India's GDP is from the "informal" sector, and it employs something like 90% of Indians. So it's not just a "large portion". It is the majority. And it is this very informal sector that demonetization targeted so to formalize it. FDI makes a very small portion of GDP growth in India. >And as current reports show - All of that money is back in circulation - so the banks are back to square one. The money is back in circulation after people paying at least 50% tax if their cash was unaccounted for, but could range up to 200% penalty if the accounting was particularly shady. Which is why you see such a high deposit rate. People would rather see 50% of their cash than nothing. So "all" that money going back into the economy makes sense. Now the government has actually account of what is going on.

kranner 8y ago
> The money is back in circulation after people paying at least 50% tax if their cash was unaccounted for, but could range up to 200% penalty if the accounting was particularly shady. Which is why you see such a high deposit rate. People would rather see 50% of their cash than nothing. You should look at the actual number of prosecution claims and convictions by the Income Tax department and the number of instances wherein compounding was admitted (taxpayers admitted to hiding income and paid a penalty), before you call demonetisation a big success in this regard. Cases filed: 2225 Convictions: 48 Instances of compounding: 1052 Source: https://timesofindia.indiatimes.com/business/india-business/i-t-prosecution-cases-treble-in-2017-conviction-up-four-times/articleshow/62481108.cms https://timesofindia.indiatimes.com/business/india-business/... Also the voluntary income disclosure scheme of 2016 ran prior to demonetisation. Not many people signed up for that, but for whomever did so, it had nothing to do with demonetisation.

sbmthakur 8y ago

> And in the end nothing happened That's nonsense. Demonetization was a contributing factor in the following: * Increase in tax-payers * Increase in E-filling * Removal of fake currency * Crushing of Real-estate black market * Removal of shell companies * Decrease in funding of Naxalites and Kashmiri separatists Demo failed because the government didn't have a clear objective in the first place. Later they started shifting goal-posts to prove it as a success. However, saying that it acheived nothing is ignorance at best. > People died This is again nonsense. People are still dying in India due to the negligence of hospitals, civic officials etc. Blaming this on Demonetization doesn't make sense. Demonetization deserves to be criticized but the criticism should be objective and not just a mere reflection of opposition propaganda. Sources: https://www.livemint.com/Opinion/sH5FSnXPkuAhknhzuPgH3M/Demonetisation-and-the-fight-against-black-money.html https://www.livemint.com/Opinion/sH5FSnXPkuAhknhzuPgH3M/Demo... https://www.quora.com/99-3-demonetised-notes-came-back-concedes-Reserve-Bank-of-India-Does-this-mean-that-Modis-demonetisation-did-nothing-for-India https://www.quora.com/99-3-demonetised-notes-came-back-conce...

kamaal 8y ago
>>Crushing of Real-estate black market What goes on in peoples minds to believe in these things? Paint, Steel, Cement, Bathroom fittings, Tiles heck every single company that connects the RE market is on the stock exchange. You can't register a hut in the property registration office since a decade without a PAN number. And builders haven't been taking cash since more than a decade now. Where is this non-existent black money in the Real Estate market? Looks like people build fictional theories in their minds and then go enact rogue policies which ruin many other things as side effect.
- sbmthakur 8y ago
  > You can't register a hut in the property registration office since a decade without a PAN number. And builders haven't been taking cash since more than a decade now. Where I stay(Mumbai suburb), taking some percentage of money as cash was always the norm. For example, for a flat worth 90 lakhs, you were expected to pay 60-75 lakhs in white and the rest in black(cash). This inflated the costs and many folks could not afford a flat due to this. It's mostly gone now thanks to RERA but Demo also played some part.

hakfoo 8y ago

>If demo was any good you would see such exercises all over the world on a regular basis. I wonder if it's mostly a logistics reason they don't do it often. To do it smoothly, you've got to produce and safeguard a mountain of currency, with a high degree of secrecy, and deploy it in short order when the demonetization is activated. It reminds me a lot of the 1962 replacement of the Hwan with the Won in South Korea. I get the impression this was a complete shock change (new Hwan notes were introduced less than a month prior to demonetization, and the replacements were produced abroad). They pulled it off only with a fair bit of challenge-- old coins got forced back into circulation, and several type of the new notes were replaced almost immediately, and this was in a country which had a tiny population and economy compared to India.

intended 8y ago
The don't do it because it doesn't work. What works is vigilance, expenditure on policing, courts and the creation of civilized systems. Which takes time, sacrifice and independent police forces/strong judiciaries.