Bloomberg: Indian economy in chaos due to Narendra Modi's madcap idea

by Guest Wed Nov 16, 2016 8:29 pm

https://www.bloomberg.com/view/articles/2016-11-16/india-s-strike-against-black-money-backfires

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by FluteHolder Wed Nov 16, 2016 8:34 pm

[size=16]This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Mihir Sharma at m.s.sharma@gmail.com
To contact the editor responsible for this story:
Nisid Hajari at nhajari@bloomberg.net
[/size]

by Vakavaka Pakapaka Wed Nov 16, 2016 9:40 pm

FluteHolder wrote:[size=16]This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
To contact the author of this story:
Mihir Sharma at m.s.sharma@gmail.com
To contact the editor responsible for this story:
Nisid Hajari at nhajari@bloomberg.net
[/size]

Aurangajeb worshipped kafir lingams.

by Guest Wed Nov 16, 2016 9:43 pm

One week after India’s sudden declaration that 500- and 1,000-rupee notes were no longer legal tender, the economy is in chaos. And that’s perhaps because the policy was designed as much to shock and awe observers with the government’s command of the Indian economy as to control India’s “black money” problem. What seemed at first to be a masterstroke by Prime Minister Narendra Modi now looks like a grave miscalculation.

Modi is beginning to sound like he may agree. His recent speeches on the subject have been frankly bizarre. In one, he seemed to laugh at those inconvenienced by the ban; in another, he broke down while speaking of the “sacrifices” he'd made for India, and warned that he might be assassinated by “forces” desperate to protect their “loot."

What’s changed in a week? Well, for one, it’s become clear that the government was simply too cavalier in its planning. Now that 86 percent of India’s currency is no longer valid, the central bank has struggled to print replacement denominations -- and the new notes are the wrong size for existing ATMs. Modi’s asked people to be patient for 50 days, but the process could take as long as four months.

You have to wonder if Modi truly sought expert advice, or relied once again on a small and trusted set of politicians to determine policy. India’s simply too big and complex for shock and awe. Large parts of the rural economy use cash for 80 percent of transactions and have been hard-hit. In seafood-mad West Bengal, for example, the fishing industry is in a state of near-collapse; in the wheat-growing states of the northwest, farmers halfway through the sowing season have run out of cash to buy seeds.

Few villagers have access to an ATM. Most have to trek to a bank branch to change their cash, which means losing out on crucial days of labor. Many Indians, particularly women, still don’t have an active bank account. Finance Minister Arun Jaitley wondered aloud how many poor people would even have 1,000-rupee notes -- probably a rhetorical question, but surely it shouldn’t have been. Someone should've sought the answer before shutting down India’s financial system.

https://www.bloomberg.com/view/articles/2016-11-16/india-s-strike-against-black-money-backfires

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Bloomberg: Indian economy in chaos due to Narendra Modi's madcap idea

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Re: Bloomberg: Indian economy in chaos due to Narendra Modi's madcap idea