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An absolutely avoidable problem. On the day the Indian govt announced demonitization, the first phone calls I made were to economists and to people with actual

An absolutely avoidable problem. On the day the Indian govt announced demonitization, the first phone calls I made were to economists and to people with actual experience working in the hinterlands. Because the fact that was true in 1990, 2000, and the day of demonitization was that more than 70% of India transacts through cash. This has never changed. Demonitization meant that for those people, the economy didn’t just stall, it stopped. However, people are resilient and the belief was that people would recover. Except that the govt followed up with a new tax regime that applied to everyone - including these cash driven workers. These are people who don’t have electricity, and aren’t even necessarily literate. I think most people can appreciate the cost to their razor thin margins when the costs of compliance, translation, formal accounting and more get tacked on. The part that most people forget, because this govt has superb PR, was that before The elections the largest protests by farmers was taking place in Delhi. Farmers commit suicide in india at some rate measurable in multiple dead farmers per day. It was bad before and was getting worse. However this was obscured A few days later, by India’s assault on terrorist camps in Pakistan territory. The dramatic and muscular response changed the focus- people went from complaining to “I should endure, see what my country is doing to my enemies.” In short : the signs have always been there, they have never been hidden, and it’s likely the relatively more privileged classes who were unaware of what was happening.

sbmthakur 7y ago
Demonetization is just one of many issues. It mainly affected cash and credit based businesses. It's not directly responsible for the lack of demand in various sectors. The current slowdown is a result of many more things. Some issues are structural, while others are cyclical. https://www.quora.com/Do-you-think-demonetization-is-the-reason-for-the-current-economic-slowdown/answer/Subodh-Mathur-4 https://www.quora.com/Do-you-think-demonetization-is-the-rea... https://www.livemint.com/news/india/15-ways-to-define-india-s-slowdown-1565715613762.html https://www.livemint.com/news/india/15-ways-to-define-india-... https://podcasts.google.com/?feed=aHR0cDovL2NhcGl0YWxtaW5kLmxpYnN5bi5jb20vcnNz&episode=YjE3NDlhOWVhODEwNDc5MWJiMGEyOWIzZTM2MDQ5OTk https://podcasts.google.com/?feed=aHR0cDovL2NhcGl0YWxtaW5kLm...
- intended 7y ago
  As I stated, demo and then GST. Further, remember that 5 Rs biscuits are not being bought. This means that other more expensive things like perhaps medicine were already casualties when that news hit the airwaves. This means Discretionary spending is likely dead. To give you context of how bad this is- remember that india survived multiple oil crisis, the 2008 global meltdown and more- without similar damage. We’ve at most been hurt by the rise of fuel costs - I remember the BJP staying that ONGC was unprofitable when they were the opposition - that was because of the cost of buying fuel from abroad. The other thing that hurts India has been the price of onions. However we have not really faced a crisis of this nature. This is not like what we have had to face before. People should be paying close attention to rural demand. Rural demand is the leviathan beneath the surface of the sensex/nifty and the organized sector. You should be looking at headlines with a laser focus on rural demand and the monsoon impact on crops.
  - sbmthakur 7y ago
    What has 5 Rs biscuits are not being bought has got to do with GST? It's specifically addressed in the podcast I shared. It's more like the company wants tax cuts from the Government. And, no, "Discretionary demand" is not dead. There's no data to back that claim. The demand has decreased and that's why we're in a slowdown. Rural demand is not the only thing that has gone. Urban demand is also down. We've had years of bad loans, high taxes etc. Add to it sector specific changes like new Engine norms in Auto sector and introduction of norms like RERA in real estate. These were going to culminate in a slowdown sooner or later.
    - intended 7y ago
      Cmon man, even the articles you link support my statements. Look, you are free to believe what you want. Belief is deeply personal. However I can state factually that when demo happened it was obvious to me and others that this would harm the unorganized sector. Same with GST. At the same time I have regularly asked everyone, from people in the know to think tanks - where is govt spending going. Know that the center and state govts have been spending heavily since the BJP came to power - hence the unprecedented transfer of funds from public entities to the center, or the reduction of funding to NGOs in favor of Govt CSR initiatives. This means that GDP has been propped up by govt spending all these years. Taxes are not a sufficient issue, And I personally oversaw a transition to a new engine regime in my previous firm whose primary item was engine driven - NONE Of that leads to today’s scenario. You want to believe - feel free. But the subject matter here is not about beliefs, it’s about facts as best stated in that article: >Almost all these economic indicators suggest that we are well into an economic slowdown, and it can possibly get worse from here. The irony is that this slowdown seems to be obvious to everyone except the government. The question this leaves us with is, how do you solve a problem without acknowledging it first? PS: if you, an Econ neophyte we’re aware that the culmination of all these measures would result in a slow Down (even with the new untested GDP figures) then the govt should know fat earlier than you and simply not do all of it at the same time, or gradually change things. However that is beyond the ability of this govt and it was their primary criticism when they were elected- india needs actual talent able to manage it, because it’s ovviously far more complex than people imagine.
Retric 7y ago
There are over 100 million farmers in India. If India farmers had the US suicide rate you would expect ~40 suicides per day.
- intended 7y ago
  Unsurprising- >The US farmer suicide crisis echoes a much larger farmer suicide crisis happening globally: an Australian farmer dies by suicide every four days; in the UK, one farmer a week takes his or her own life; in France, one farmer dies by suicide every two days; in India, more than 270,000 farmers have died by suicide since 1995 2015 had about 37 farmers killing themselves everyday if I’m not off. https://www.theguardian.com/us-news/2017/dec/06/why-are-americas-farmers-killing-themselves-in-record-numbers https://www.theguardian.com/us-news/2017/dec/06/why-are-amer... And Wikipedia article on Indian farmer suicides.
  - Retric 7y ago
    I get what your saying, but ~630 people per day commit suicide in India. That's ~50 million people since 1995. In other words Indian farmers are not unusual likely to commit suicide, it's just a sick talking point.
    - true_religion 7y ago
      Alternatively, the suicide rate is pointing to systemic issues present in society, and while other counties may be okay with ignoring these issues as part of a “personal responsibility”, it’s not something to be generally approved of. The OP is Indian, can we not agree that the OP does not think this is an acceptable suicide rate regardless of how comparable it is to the general rate or the rate in other countries?
    - NotSammyHagar 7y ago
      That works out to ~5 million, not 50m. Still horrible to think about. 5.518 million people killed themselves? 63036524
thaumasiotes 7y ago
> Farmers commit suicide in India at some rate measurable in multiple dead farmers per day. India is big. What's the per capita rate?
- samspenc 7y ago
  India's GDP per capita = ~$2,000 . India is a $2.6 trillion economy with 1.3 billion people. In comparison: * US GDP per capita = $56,000 . US is a $18 trillion economy with 325 million people. * Mainland China GDP per capita = $8,000 . China (supposedly [1]) has a $11 trillion economy with 1.3 billion people. [1] "Supposedly" because China's GDP and other economic numbers are reportedly inflated and no one knows what the true numbers are.
  - thaumasiotes 7y ago
    That's great, but I struggle to see the relevance to how many people per million commit suicide.
  - rohit2412 7y ago
    He wasn't asking about gdp. He wants to know the suicide rate per 100,000 people and see if farmers are outliers.
travisporter 7y ago
Sorry, I’m having trouble connecting the concepts between your paragraphs. What is the main point you like to convey?
- sifar 7y ago
  That the government's financial policies were disastrous and high handed. Attention from these was diverted by PR blitzkrieg events and invoking nationalism.

sbmthakur 7y ago

Demonetization is just one of many issues. It mainly affected cash and credit based businesses. It's not directly responsible for the lack of demand in various sectors. The current slowdown is a result of many more things. Some issues are structural, while others are cyclical. https://www.quora.com/Do-you-think-demonetization-is-the-reason-for-the-current-economic-slowdown/answer/Subodh-Mathur-4 https://www.quora.com/Do-you-think-demonetization-is-the-rea... https://www.livemint.com/news/india/15-ways-to-define-india-s-slowdown-1565715613762.html https://www.livemint.com/news/india/15-ways-to-define-india-... https://podcasts.google.com/?feed=aHR0cDovL2NhcGl0YWxtaW5kLmxpYnN5bi5jb20vcnNz&episode=YjE3NDlhOWVhODEwNDc5MWJiMGEyOWIzZTM2MDQ5OTk https://podcasts.google.com/?feed=aHR0cDovL2NhcGl0YWxtaW5kLm...

intended 7y ago
As I stated, demo and then GST. Further, remember that 5 Rs biscuits are not being bought. This means that other more expensive things like perhaps medicine were already casualties when that news hit the airwaves. This means Discretionary spending is likely dead. To give you context of how bad this is- remember that india survived multiple oil crisis, the 2008 global meltdown and more- without similar damage. We’ve at most been hurt by the rise of fuel costs - I remember the BJP staying that ONGC was unprofitable when they were the opposition - that was because of the cost of buying fuel from abroad. The other thing that hurts India has been the price of onions. However we have not really faced a crisis of this nature. This is not like what we have had to face before. People should be paying close attention to rural demand. Rural demand is the leviathan beneath the surface of the sensex/nifty and the organized sector. You should be looking at headlines with a laser focus on rural demand and the monsoon impact on crops.
- sbmthakur 7y ago
  What has 5 Rs biscuits are not being bought has got to do with GST? It's specifically addressed in the podcast I shared. It's more like the company wants tax cuts from the Government. And, no, "Discretionary demand" is not dead. There's no data to back that claim. The demand has decreased and that's why we're in a slowdown. Rural demand is not the only thing that has gone. Urban demand is also down. We've had years of bad loans, high taxes etc. Add to it sector specific changes like new Engine norms in Auto sector and introduction of norms like RERA in real estate. These were going to culminate in a slowdown sooner or later.
  - intended 7y ago
    Cmon man, even the articles you link support my statements. Look, you are free to believe what you want. Belief is deeply personal. However I can state factually that when demo happened it was obvious to me and others that this would harm the unorganized sector. Same with GST. At the same time I have regularly asked everyone, from people in the know to think tanks - where is govt spending going. Know that the center and state govts have been spending heavily since the BJP came to power - hence the unprecedented transfer of funds from public entities to the center, or the reduction of funding to NGOs in favor of Govt CSR initiatives. This means that GDP has been propped up by govt spending all these years. Taxes are not a sufficient issue, And I personally oversaw a transition to a new engine regime in my previous firm whose primary item was engine driven - NONE Of that leads to today’s scenario. You want to believe - feel free. But the subject matter here is not about beliefs, it’s about facts as best stated in that article: >Almost all these economic indicators suggest that we are well into an economic slowdown, and it can possibly get worse from here. The irony is that this slowdown seems to be obvious to everyone except the government. The question this leaves us with is, how do you solve a problem without acknowledging it first? PS: if you, an Econ neophyte we’re aware that the culmination of all these measures would result in a slow Down (even with the new untested GDP figures) then the govt should know fat earlier than you and simply not do all of it at the same time, or gradually change things. However that is beyond the ability of this govt and it was their primary criticism when they were elected- india needs actual talent able to manage it, because it’s ovviously far more complex than people imagine.

Retric 7y ago

There are over 100 million farmers in India. If India farmers had the US suicide rate you would expect ~40 suicides per day.

intended 7y ago
Unsurprising- >The US farmer suicide crisis echoes a much larger farmer suicide crisis happening globally: an Australian farmer dies by suicide every four days; in the UK, one farmer a week takes his or her own life; in France, one farmer dies by suicide every two days; in India, more than 270,000 farmers have died by suicide since 1995 2015 had about 37 farmers killing themselves everyday if I’m not off. https://www.theguardian.com/us-news/2017/dec/06/why-are-americas-farmers-killing-themselves-in-record-numbers https://www.theguardian.com/us-news/2017/dec/06/why-are-amer... And Wikipedia article on Indian farmer suicides.
- Retric 7y ago
  I get what your saying, but ~630 people per day commit suicide in India. That's ~50 million people since 1995. In other words Indian farmers are not unusual likely to commit suicide, it's just a sick talking point.
  - true_religion 7y ago
    Alternatively, the suicide rate is pointing to systemic issues present in society, and while other counties may be okay with ignoring these issues as part of a “personal responsibility”, it’s not something to be generally approved of. The OP is Indian, can we not agree that the OP does not think this is an acceptable suicide rate regardless of how comparable it is to the general rate or the rate in other countries?
  - NotSammyHagar 7y ago
    That works out to ~5 million, not 50m. Still horrible to think about. 5.518 million people killed themselves? 63036524

thaumasiotes 7y ago

> Farmers commit suicide in India at some rate measurable in multiple dead farmers per day. India is big. What's the per capita rate?

samspenc 7y ago
India's GDP per capita = ~$2,000 . India is a $2.6 trillion economy with 1.3 billion people. In comparison: * US GDP per capita = $56,000 . US is a $18 trillion economy with 325 million people. * Mainland China GDP per capita = $8,000 . China (supposedly [1]) has a $11 trillion economy with 1.3 billion people. [1] "Supposedly" because China's GDP and other economic numbers are reportedly inflated and no one knows what the true numbers are.
- thaumasiotes 7y ago
  That's great, but I struggle to see the relevance to how many people per million commit suicide.
- rohit2412 7y ago
  He wasn't asking about gdp. He wants to know the suicide rate per 100,000 people and see if farmers are outliers.

travisporter 7y ago

Sorry, I’m having trouble connecting the concepts between your paragraphs. What is the main point you like to convey?

sifar 7y ago
That the government's financial policies were disastrous and high handed. Attention from these was diverted by PR blitzkrieg events and invoking nationalism.