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>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 i

>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.

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.