Indians with large amounts of hard currency are usually involved in some sort of tax evasive maneuver and sometimes involved in criminal activity. Corrupt politicians will use enormous amounts of currency to influence elections, so in this case the party in power (BJP, similar in ideology to US Republican party) used demonetization to disarm other political parties before the elections while appearing hard on corruption.
There are numerous ways that wealthy individuals and businesses got around demonetization - for example, a bank manager could spread a large amount of "black money" across multiple accounts in the names of existing account holders, deposit a minimum deposit to avoid reporting requirements, and then withdraw the original amount later (minus a 20% commission) and return it in the form of new currency. The only people who were hurt were the average people who had to stand in long ATM lines or withstand reduced economic volatility. An established business may be able to withstand a month of severely reduced business but a street vendor, laborer, service worker, etc (a large part of the population) could not.
> The only people who were hurt were the average people
This is exactly what my experience and observation have been too!
Even the upper middle class folks had the work around ready and at times recommended to them by their bank managers. I work in Bangalore (South) but I am from UP (North) and one thing, in both the regions, I learned from traders and rich people regarding demonetisation that it was not more than a minor or major (in many cases when too much black money was involved) annoyance for them.
PS. I am from the region that borders Nepal. A lot of money was moved to Nepal during that period as demonetisation apparently didn't apply to INR in circulation in Nepal (INR is quite common there).
To add to the plight, ATM’s were always empty. It’s the governments responsibility to make sure they print the new currency and fill them in ATM’s as per anticipated demands.
I had myself witnessed this. One of those days people were waiting outside a particular bank ATM, since the guard had said it may take 2 hours for cash to arrive. An ATM Van came and cash was unloaded into a bank ATM machine.We saw that bank officials were withdrawing the cash, and wouldn’t let us (the general public) withdraw cash. Obviously they were doing this to curry favors to some influential rich.
Also, I missed my friend’s marriage because of this.
Only yesterday did I get to know that one of the prominent builders ran out of business courtesy demonetization.
MENACE, MENACE is the only world that can be used to describe the post-demonetization days. A guy who people of the largest democracy in the world chose to be their leader, effed up their lives and pretty much sure many made billions out if it. It was pretty much a scam that was pulled under the umbrella of "It will bring back all the un-taxed currency under scrutiny", but was really just another day when financially lower and financially middle-class citizens got effed by the turds sitting in the govt. and the lobby they suck up to. People were crying and begging for their own money outside of banks. BAnk employees were working 18hrs 7 times a week. There were many meters long queues outside of every ATM, and trust me there are a hell lot of ATMs in India(clearly because of the population). If you ever want to pull off a con act of duping someone of their own hard earned money, people of Modi REGIME are the con-artists you have to meet with.
So the general belief is that "black money" is always stashed as hard cash. Specifically in higher denominations of 500 and 1000 ruppees. To uphold the poll promise of putting an end to black money, Modi came up with this plan to ban these denominations.
It was utter chaos when this happened. People literally queued up at ATMs for hours and most ATMs would be out of cash. PayTM, now an household name in India for online wallet, turned out to be the biggest beneficiary from the whole fiasco. Black money however lives on.
Yes, as a Westerner I hadn't even heard of this massive invalidation of 86% of India's cash currency.
Pretty dramatic, certainly could have helped the massive crypto price run-up in late 2017. Also helps to demonstrate the value of a currency that can't be manipulated by state actors.
Invalidation is manipulation. The goodness of the reasons does not matter. Some people prefer a currency that can not be invalidated (shrunk) or debased (grown)
No one knows who Satoshi Nakamoto is, if he's alive, and whether he will use his bitcoin in the future. He could move the market if he chooses. At one point he was an oligarch, correct? He had money and political power as far as Bitcoin is concerned.
i dont believe the spending of Satoshi's (nor anybody else's coins) would cause any issue, since the market knows of the existence of these coins. It's that bitcoin is quite volatile due to its immaturity as a currency and commodity (it seems to act as both atm...)
Unless satoshi has somehow hidden a large chunk of coins that has never been released somehow (which, would be weird, since as soon as they release it, it would invalidate the current chain!)
If you are arguing that the initial creation is a manipulation, I think you are posting in bad faith, because manipulation is generally understood as altering something that already exists - as in "genetic manipulations"
And I'm not sure that your comment adds anything to the discussion here, I would consider elaborating on why you think you should not have to pay taxes after being able to generate wealth using public infrastructure as a foundation.
I guess different news outlets have different focuses, but it was big news on the BBC news website, which is where I get most of my international coverage.
I don't read any American news websites, but I think from memory it wasn't really covered at all on the New Zealand news websites.
> Could someone familiar with the matter talk more about what the days/weeks following Modi's announcement looked like for the every day Indian?
People with money sold extra rupees to people below the maximum conversion at a small discount. Bank deposits bumped up, which was the point of the exercise—Indian state-owned banks are woefully uncompetitive and undercapitalised. The line about dirty rupees being extinguished was a farce, mostly because most large-scale illicit activity in India happens with hard currency and/or in Mauritius or Singapore.
I dont think this made a difference - If bank of Indore has given out bad loans under pressure to politically connected people, deposits to HDFC do not fix the liability imbalance.
And then after all of this - we gave out massive loan waivers to farmers yet again.
It was an unmitigated disaster on several economic aspects.
Political it had superb optics.
All in all, it was a political spectacle paid for by the exchequer.
Here are the critical pieces of information needed -
1) The large majority of the Indian economy is "black" - i.e, the unorganized sector.
2) Cash is the main medium of trade, years after demonitization, we are back at similar levels of cash use, indicating no lasting impact on customer habits.
3) The reasons provided by the govt changed by the day, Initially it was sold as "stopping black money" or illegal accumulation of untaxed wealth.
This was updated to "removing counterfeit currency", later "increasing digital transactions".
4) The govt claimed that this was a well planned out strategic move, and not some ad hoc pie in the sky idea they were working on.
However, within a few days it showed clearly that the govt had not planned for the event - Amount of money demonitized >>> ability of the mint to print new notes, even with the several month lead it was supposed to have - if the mint was working non stop for that period.
The new notes did not work with many ATM trays, and this caused further problems- not to mention the scale of the logistical problem in getting the new notes to every corner of the country.
5) Loopholes: Within a few days, if not hours - people were using mules to launder money.
The govt said that you could deposit only X amount of money, after which you had to account for it and show where you got it from. The argument was that people holding untaxed or corrupt proceeds, would not be able to deposit them.
however - almost all the money demonitized was re-deposited into the banking system. This means that all the untaxed money, somehow was legally deposited in legit bank accounts.
PS) Indians HATE corruption, and the idea that someone got ahead of them by cheating. People happily accepted the sudden demonitization announcement because they believed that the rich and corrupt will suffer. This was why the PR was good.
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For each of the stated reasons given by the government, it is easy to show with actual numbers, that the exercise failed to achieve its goals.
Where a positive improvement can be shown, the gains are not commensurate to the losses incurred by the economy, and costs paid to undertake the exercise.
Digital transactions have not increased significantly, for example - and will not until the underlying telecom and trade infrastructure improves.
Most of the wealth was recovered, and very few people, if any have been caught as a result of this - especially since its common knowledge that most politicos sit on piles of cash.
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However, it is very likely that the goal of the exercise was to harm other political parties who had cash based war chests.
Since the people most harmed by this are in the unorganized sector, the results will not show in any GDP projection.
The current dispensation is far more pro corporate than the previous govt, and so their chief patrons and metrics are not impacted, so it was at a relatively low political cost for the party.
In short, it was an audacious political stunt, and carried out with verve. Its also hard to criticize it because of the amount of ire you attract online for being negative about actions of the current dispensation.
SO please note, this is the take on Demonitization, and not on the BJP entire.
The Delhi-based lobbyist told me a story he had heard from a minister. On 8 November 2016, as Modi prepared to announce his surprise decision to annul all high-denomination bank notes, he gathered his top ministers. After handing each a piece of blank paper, he asked for their opinions on whether he should withdraw all Rs 1,000 notes, all Rs 500 notes, or both. “Jaitley, being the finance minister, said, ‘We can demonetise 1,000-rupee notes but not 500-rupee notes. It will be a big jolt.’ To which Modi, not in jest but sarcasm, said, ‘Are you saying this because lawyers mostly store their money in 500s?’ Rajnath said, ‘Pehle hi kar dena chahiye tha, I am fully supportive of it.’” Venkaiah Naidu, also a cabinet minister, supported the move as well. Then it was Gadkari’s turn. “He said, ‘This problem of black money should be finished once and for all. Demonetise everything from 1,000 to 100. Nobody keeps bundles of 50-rupee notes.’ Modi was taken aback.” When a colleague later asked Gadkari about this, “he said, ‘He had already made up his mind, he was just doing a paper exercise to corner us. So I tried to go one up on him.’
In short it was the Prime ministers personal pet project, done to drain out the cache of money held by opposition parties.
pretty much. But, they really found a way to cut the gem with most of the cost being borne by others and their opposition, while the positive optics being in their favor.
I'm a developer in Bangalore. It was glorious. One thing to understand is that in India regular small time business owners are involved in a lot of tax evasion. They don't report their income fully and thus always have a huge stash of cash lying around. The biggest use for this is to buy real estate. Before demonetisation, if you want to buy a house or apartment it was usual to discuss the cash and registration amount. You would register the deal for ₹5 million and pay an extra 5 million in unaccounted cash.
This meant that people who honestly report their income (usually salaried) are at a huge disadvantage. I don't have 5 million lying around in cash. I'll have to pay everything from my bank account, which will get tracked eventually to the seller I purchase my house from.
Now, all of this bullshit is gone. The housing market is much more reasonable, there is no talk of cash payment. I love it. Even initially, I didn't have to stand in ATM lines, because I always use my cc. Where they don't accept cc, they accept Paytm.
> I'll have to pay everything from my bank account, which will get tracked eventually to the seller I purchase my house from.
Sorry dude. You are disconnected from reality. Workaround always exist. People still prefer to pay, as much as possible in cash, to save on that huge registration fees.
This demonitization was just a smoke in people's eyes. Those big thugs are still scaming the banks and fleeing the country with billions of Rupees.
> People still prefer to pay, as much as possible in cash, to save on that huge registration fees.
For large real-estate companies, like Aparna Constructions in Hyderabad, most of the transaction is with fully accounted money. About 10% of the transaction is with un-accounted for cash.
Cash transactions are happening with smaller builders, but even they are finding it difficult to find buyers with a lot of liquid cash.
Now most of the money is being moved through faceless anonymous companies, and those are a step above unaccounted cash, when it comes to tracking and monitoring cash flow in the economy.
> This demonitization was just a smoke in people's eyes.
Perhaps, but along with the introduction of GST, I now find even traditional traders who usually prefer not to give a bill with a sale (for construction items, cement, steel, electrical wires, equipment, etc) are insisting on a GST bill. It was a really big surprise to me.
Also, this is a political masterstroke. Most of the country is below middle class and hardly every see a 2000 Rs. note. Most of them don't have much liquid cash. Most of them are happy that the rich are finally 'getting it' as in, finally there is someone in power who is not afraid to walk the talk.
Whether this is just smoke and mirrors is a different debate. But for most of the country, most of the poor people in the country, it's a eye-brow raising move, a very big talking point for worker level party operatives.
My personal opinion is that these sorts of actions are required to take the populace from cash to digital transactions. Waiting for natural course of movement to digital transactions will take an un-accptably long time.
With demonitization, many farmers, people in remote villages, even street vendors are using digital transactions. Credit-card use has increased, digital payments from mobile phones has increased.
Most importantly, the concept of digital transactions, virtual cash, in some very remote places, even the concept of bank accounts has entered into the greater public consciousness.
> Those big thugs are still scaming the banks and fleeing the country with billions of Rupees.
This happens in even the most developed countries. Even in the US, Europe, UK etc. The only difference is there the money is transferred to accounts in the Cayman islands, here in India, perhaps some other route.
>>Cash transactions are happening with smaller builders, but even they are finding it difficult to find buyers with a lot of liquid cash.
Its impossible to register a property in Karnataka, without a PAN card/number. So in short for high value transaction its already possible to have tax accountability. Same with jewelry. The question is that of enforcement. You don't need to demonetize anything for these things.
>>Perhaps, but along with the introduction of GST, I now find even traditional traders who usually prefer not to give a bill with a sale (for construction items, cement, steel, electrical wires, equipment, etc) are insisting on a GST bill. It was a really big surprise to me.
What is going to be a bigger surprise to you is discovering a few years down the lane that a full scale parallel unregulated economy is in motion.
In fact that is already the case with a lot of small time things now.
>>Also, this is a political masterstroke.
Lol
>>Most of the country is below middle class and hardly every see a 2000 Rs. note.
Middle class these days is like people who make a good 30-40K a month. These people see a lot of high value notes.
>>Most of them are happy that the rich are finally 'getting it'
What do you think the year is? 1985?
The rich don't exactly keep their money beneath their mattress these days.
>>My personal opinion is that these sorts of actions are required to take the populace from cash to digital transactions.
>>With demonitization, many farmers, people in remote villages, even street vendors are using digital transactions
Before you implement all these pie in the sky electronic transaction ideas. Please ensure people get electricity. In Bangalore in weekdays there are half a day power cuts.
How should public do electronic transactions without electricity?.
> Its impossible to register a property in Karnataka, without a PAN card/number. So in short for high value transaction its already possible to have tax accountability. Same with jewelry. The question is that of enforcement. You don't need to demonetize anything for these things.
How do you explain the actual change that has occured in the real estate market then?
> What is going to be a bigger surprise to you is discovering a few years down the lane that a full scale parallel unregulated economy is in motion.
Of course. Nobody says that this will kill all illegal activity for all time in this country of 1.25 billion people. But there was a big positive effect due to demonetisation. Even if it dents the black economy for 5 years, that's good enough. We'll take more such actions when needed.
> Middle class these days is like people who make a good 30-40K a month. These people see a lot of high value notes.
From the article: vast majority of middle class in india earns less than $4 per day. A ₹2000 note is 10 days wages. Yeah, I don't think those guys will ever save that much while still surviving.
> The rich don't exactly keep their money beneath their mattress these days.
Yup, they were forced to move it from there in 2016. Some moved it to bitcoin, as described in TFA.
> Before you implement all these pie in the sky electronic transaction ideas. Please ensure people get electricity.
Bullshit. Electrification and economic reforms can happen simultaneously in the world's seventh largest economy. For example, 2018 was the first year when all villages satisfied the criteria for being electrified. Long way from 24x7 electricity, but hey, it's a start.
>>How do you explain the actual change that has occured in the real estate market then?
What change has happened in the Real estate market? The big builders are continuing to sell their inventories as they were doing before with cheques and RTGS transactions.
People still continue pay bribes to registration offices.
In fact plots around vicinity of Bangalore are still going like hot cakes.
If you are fed up about property rates, then there is going to be no relief there. People are coming to cities for jobs through flood gates, and demand is far higher than supply. Every year one crore babies are born in India, and all of them need homes to stay 20 years from now, this is year after year, every single year.
When the demand is this high, how do you expect prices to not go up?
>>Even if it dents the black economy for 5 years
It didn't anything even for 5 minutes.
Only thing it achieved is slowed economic growth.
>>We'll take more such actions when needed.
Again, who is this 'we'.
>>vast majority of middle class in india earns less than $4 per day.
That's the poor, and they were worse effected. The unorganized sector where these people are largely employed suffered and many jobs were lost.
>>Yup, they were forced to move it from there in 2016. Some moved it to bitcoin, as described in TFA.
Not even fools keep their money in cash, even in the past. People invest money.
Indian economy didn't exactly come magically into existence in 2016. So please...
>>Bullshit. Electrification and economic reforms can happen simultaneously in the world's seventh largest economy.
I can only talk from my experience. Me and my father searched for an apartment about 6 months before the demonetisation. And I'm searching one for me now. There is a clear difference.
What are the issues you are facing while buying an apartment?
Keep note that any builder where software engineers buy, the big builder types, do not take cash money. In fact the payment schedule and mechanism is all in cheque or RTGS transactions. So that is barely a problem with or without any government action. Even in the worst case you still have to submit your PAN, so the government can easily audit your case even in case of cash transactions.
If you are complaining about the bribe you have to pay during property registration. Make note you will be made to pay that even you do not do undervalue registration and pay the full amount. They charge you bribe even if all your papers are right.
That sort of corruption can already be dealt with. But no one really tries hard enough because you have to burn down the whole system to do that. Every table in the registration office takes a cut to pass a paper to the next table.
If your whole system is corrupt top down, you have little hope to fight these things apart from long term social reforms.
They are tightening them with RERA act etc. If you have noticed income tax and GST registration are sky high. So much that government had to reduce the GST. India is and will become cash free. Sooner or later.
Umm... what? Are you sure you're replying to the correct thread?
> All this does is demolish that <unorganized> sector - and thus harm the larger economy on which the organized sector depends.
Wrong, this converts a large part of the unorganized sector to organized. Contrary to your assertion, this has helped include the large unorganized sector in the growth story of the country. I believe this is why we're seeing record economic growth.
> but this isn't going to happen quickly.
OK, doesn't mean we shouldn't try to help speed it up.
No it doesn't help - are you aware of why the unorganized sector is not in the organized sector?
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No disagreement, but this is not the path, and it really cant be sped up.
The same way its going to take X amount of time for someone to climb rank in an online game, its going to take time for compliance and ability to comply to catch up.
The same way you cant feed jet fuel to a fiat, you cant expect to push the economy beyond its adjustable rate.
They can't even complain...like calling the cops because someone robbed your cocaine stash*
(* for those that didn't read the article: India banned large bills, say, their $100 bills. People had x months to turn it in to exchange with smaller bills. But you had to explain how you got that much money and why didn't declare it to the taxman. So quite a few turned to Bitcoin etc.)
For some perspective, the bills that were revoked were the 500 and 1000 Indian Rupee notes. 500 INR was worth around 7 to 8 US Dollars at the time, so the comparison to 100 USD bills is around an order of magnitude too great, despite things being cheaper in India.
Seen this so many times already. Would rather like to know what is he doing these days and see his latest video - if he has any courage to record one. When bubble burst, scam artists usually vanish.
I'm not sure if either is appropriate. Bitconnect is worth nothing, so no matter how many bitconnect coins were lost, they would be worth $0 not $3B.
The title seems almost unrelated to the article. The title refers to money lost in the bitconnect ponzi scheme, but the article is mostly about kidnapping schemes worth much less money, and that demanded payment in bitcoins.
AMP version: a bit funny looking (big pictures, full width layout rendering), but otherwise very simple and clean, just text and pictures. The only real issue is the pictures are big, but that's kind of nice in its own way.
Non-AMP version: slow to load, janky video loading that moves the text around while I'm trying to read it, janky side bar menus that jerk as I scroll, the actual article only occupies the middle 1/4-1/3 of the layout.
AMP version: not loading, I assumed due to blocked JS, but I just went back to check, and oh it finally loaded.. so maybe it eventually falls back with my first-party-only JS policy.
Non-AMP version: immediate load, perfectly readable, refreshed with no JS (not even first-party) and it's imperceptibly fast. (Reloaded the AMP version again with no JS just to check, and of course - without the JS to say: Hey, after a timeout, if AMP JS hasn't loaded, fall back on standard - it doesn't load at all. Great.)
Edit: actually, it did, eventually (not sure how that works then) but with no images and full-width text. I'll take AMPless any day.
> AMP version: not loading, I assumed due to blocked JS, but I just went back to check, and oh it finally loaded.. so maybe it eventually falls back with my first-party-only JS policy.
Looks like the culprit is this piece of code:
body {
animation:-amp-start 8s steps(1,end) 0s 1 normal both}
@keyframes -amp-start{from{visibility:hidden}to{visibility:visible}
}
Why they purposely degrade the experience is beyond me.
An easy way to beautify and decluter both AMP and non-AMP pages is the Firefox reader view mode (F9). It comes with readable, standard size fonts, predictable layout and no extraneous eyecandy.
It seems that they used bitcoin as a shortcut for cryptocurrencies as a whole, which frankly isn't that far fetched given the current state of the cryptocurrency world.
Could someone familiar with the matter talk more about what the days/weeks following Modi's announcement looked like for the every day Indian?