500 and 1000 notes - is it a wise move?

by truthbetold Fri Nov 11, 2016 8:19 pm

https://en.wikipedia.org/wiki/Indian_500_and_1000_rupee_currency_demonetisation

Total circulation of currency in India is $265 Billions.

Of this 86% is in 500 and 1000 notes. Of the 500 and 1000 notes in circulation , some 1/3 are forgery. Large chunk of forged notes were pushed by terror units to support their activities. That seems to be the primary motive behind govt's move. The above numbers show that about $77 Billion is underground money.

SBI reported a one day total deposits of $7 billion. Other banks also saw similar significant deposit increases.

Money that comes into banks will help them increase capital base and reduce non performing loans (NPAs) as a percentage. Govt also gets Tax money on deposits.

Stories in news papers show people paying of Electricity dues, local real estate taxes, hospital bills, and even personal bills.

On the negative side, the suddenness of the govt move caused some implementation problems. Vague instructions, ATM limitations, slow replenishment of ATMs, long lines at ATMS and Banks, rigid implementation of 4000 rupee limit. This will cause some backlash and may even cause permanent damage to modi and BJP.

Some opposition, including SUCH modi baiters, made some expected standard negative statements.

Jury us out there. Getting black money out is very difficult. And very dangerous. Modi and BJP will face some negative sentiment because of errors in implementation. Hoarders are survivors who will find ingenious ways to subvert the system. I am certain that these hoarders, such as well known corrupt politicians Jagan and Maran, will create small or big problems, ( ex: Patel reservation or some other religious trouble). They thrive in trouble because that will allow them opportunity to exchange their ill gotten wealth.

If Modi's govt. succeeds, it will have lot positives. Failure will not be a surprise because that is the expected result in India. For the sake of Indian people , let us hope Modi's govt succeed to deliver.

by Kayalvizhi Fri Nov 11, 2016 11:15 pm

The new Rs, 2000 notes are illegal. 2000 is written in Devanagari script and it is illegal. Constitution says official Hindi shall be written in Devanagari script and use Arabic numbers.

by truthbetold Fri Nov 11, 2016 11:37 pm

http://www.eenadu.net/homeinner.aspx?category=home&item=break29

This is an article from Eenadu. Well written and contains useful information and avoids knee jerk comments.

by truthbetold Fri Nov 11, 2016 11:39 pm

Kayalvizhi wrote:The new Rs, 2000 notes are illegal. 2000 is written in Devanagari script and it is illegal. Constitution says official Hindi shall be written in Devanagari script and use Arabic numbers.

Write to RBI. If you are not happy with RBI response, go to court. Until courts say otherwise, 2000 notes will be official money.

by TruthSeeker Fri Nov 11, 2016 11:52 pm

Please realize this - that "secrecy and swiftness" of such a move is of paramount importance.

If government started changing the ATM machines to handle new notes, secrecy is compromised.

The pain is inevitable.

Of course they have been printing new notes for last several months at least, and had the time to think this over.

All such pain to common man was decidedly preferred over the secrecy and swiftness.

I myself have over 6+ lakhs of cash in India, which I got to spend when I spent few months in India over my mother's treatment, and not it will all probably be a waste.

A lot of white money will go as trash - poor, middle class, alike.

It is what it is. I can totally see how and why the government does not have any choice, but to inflict this pain, to honest folks.

Any conspicuous measure to cover this pain, would have alarmed black money hoarders, and the whole idea would have been lost.

The move so swift, without any evidence of it in days before it, was the only option.

Its a good move.

From now on, people in India will hardly keep much cash. Or if they do, it will be in banks.

Takes some balls to decide such in a democracy,
TS.

by rawemotions Sat Nov 12, 2016 8:16 pm

Kayalvizhi wrote:The new Rs, 2000 notes are illegal. 2000 is written in Devanagari script and it is illegal. Constitution says official Hindi shall be written in Devanagari script and use Arabic numbers.

What are "Arabic Numbers"?

As far as I know the numbers we use today in majority of the world are called "Hindu-Arabic" Numerals

The Arabs got credit for translating Sanskrit (by taking cartloads of slaves from India) and passing them off to Europe, during their occupation of Spain / parts of Europe as Moors.

It is surprising for textbooks in India still call them so.

I am sure the fake historians Irfan Habib / Romila Thapar duo must have seen to it, that this remains so.

.

by rawemotions Sat Nov 12, 2016 8:21 pm

TruthSeeker wrote:Please realize this - that "secrecy and swiftness" of such a move is of paramount importance.
The move so swift, without any evidence of it in days before it, was the only option.

Its a good move.

From now on, people in India will hardly keep much cash. Or if they do, it will be in banks.

Takes some balls to decide such in a democracy,
TS.

Agree!
Please see my notes in another thread, that has a pros/cons points listed for this move.
It is a momentous decision and far reaching decision, no question about it. It can be aptly called a surgical strike on internal black money. Modi has shown that he means business and is a no-nonsense PM. That much we have to give him credit.

by confuzzled dude Sat Nov 12, 2016 8:54 pm

Not wise given how badly Modi bungled it. Half of the ATMs are inoperable and remaining ran out of cash quickly. And Rs. 4000 per day limit put severe strain on everybody. It is chaotic as not all the gas stations, hospitals and tolls are accepting old currency as announced by the govt. People ended up cancelling marriages as well. This is what happens when govt. tries to cover up its ulterior motives i.e. looking for political gains, as social service. It looks like at the end of the day, all the black money hoarders will be be able to convert most of it into new currencies.

by garam-kuta Sat Nov 12, 2016 10:28 pm

and apparently the size of 2000 rs notes are smaller than the old 1000 rs note and the upgrading the software for the atms to bring them all back into functional state will take 20 days at least. crazy.

by garam-kuta Sat Nov 12, 2016 11:14 pm

confuzzled dude wrote:Not wise given how badly Modi bungled it. Half of the ATMs are inoperable and remaining ran out of cash quickly. And Rs. 4000 per day limit put severe strain on everybody. It is chaotic as not all the gas stations, hospitals and tolls are accepting old currency as announced by the govt. People ended up cancelling marriages as well. This is what happens when govt. tries to cover up its ulterior motives i.e. looking for political gains, as social service. It looks like at the end of the day, all the black money hoarders will be be able to convert most of it into new currencies.

it claims the life of a child.
http://www.andhrajyothy.com/artical?SID=333297

by rawemotions Sun Nov 13, 2016 5:52 pm

garam-kuta wrote:
confuzzled dude wrote:Not wise given how badly Modi bungled it. Half of the ATMs are inoperable and remaining ran out of cash quickly. And Rs. 4000 per day limit put severe strain on everybody. It is chaotic as not all the gas stations, hospitals and tolls are accepting old currency as announced by the govt. People ended up cancelling marriages as well. This is what happens when govt. tries to cover up its ulterior motives i.e. looking for political gains, as social service. It looks like at the end of the day, all the black money hoarders will be be able to convert most of it into new currencies.
it claims the life of a child.
http://www.andhrajyothy.com/artical?SID=333297

It is very unfortunate. But I do not understand the logic of blaming the administration for this. The doctor in question should be imprisoned.
The announcements had very clearly said Hospitals are to accept Rs500 /1000 notes (that have been de-monetized)

Off course there had been lacunae on the part of administration. Now with new announcements on increased limits and separate queues for Disabled and Senior citizens, the government is at least trying to improve the initial mistakes.

But I do not understand why the Banks are not kept open till 7 PM with overtime provided for workers. That can still be done.

by garam-kuta Sun Nov 13, 2016 7:58 pm

rawemotions wrote:
garam-kuta wrote:
confuzzled dude wrote:Not wise given how badly Modi bungled it. Half of the ATMs are inoperable and remaining ran out of cash quickly. And Rs. 4000 per day limit put severe strain on everybody. It is chaotic as not all the gas stations, hospitals and tolls are accepting old currency as announced by the govt. People ended up cancelling marriages as well. This is what happens when govt. tries to cover up its ulterior motives i.e. looking for political gains, as social service. It looks like at the end of the day, all the black money hoarders will be be able to convert most of it into new currencies.
it claims the life of a child.
http://www.andhrajyothy.com/artical?SID=333297
It is very unfortunate. But I do not understand the logic of blaming the administration for this. The doctor in question should be imprisoned.
The announcements had very clearly said Hospitals are to accept Rs500 /1000 notes (that have been de-monetized)

if you know india, you will know that the hospital and doctors are big business to make money by squeezing as much money as they can. they will not have any morals.

But I do not understand why the Banks are not kept open till 7 PM with overtime provided for workers.

that will not help at all. the banks are apparently running out of money within 2,3 hours of opening. the basic problem is the shortage of small notes. they should have printed enough new 500 and 100 notes before doing this and should've prepared at least six more months but political considerations ( upcoming UP elections) forced their hand and causing all this trouble to the people .

by confuzzled dude Sun Nov 13, 2016 8:02 pm

garam-kuta wrote:
rawemotions wrote:
garam-kuta wrote:
confuzzled dude wrote:Not wise given how badly Modi bungled it. Half of the ATMs are inoperable and remaining ran out of cash quickly. And Rs. 4000 per day limit put severe strain on everybody. It is chaotic as not all the gas stations, hospitals and tolls are accepting old currency as announced by the govt. People ended up cancelling marriages as well. This is what happens when govt. tries to cover up its ulterior motives i.e. looking for political gains, as social service. It looks like at the end of the day, all the black money hoarders will be be able to convert most of it into new currencies.
it claims the life of a child.
http://www.andhrajyothy.com/artical?SID=333297
It is very unfortunate. But I do not understand the logic of blaming the administration for this. The doctor in question should be imprisoned.
The announcements had very clearly said Hospitals are to accept Rs500 /1000 notes (that have been de-monetized)
if you know india, you will know that the hospital and doctors are big business to make money by squeezing as much money as they can. they will not have any morals.

But I do not understand why the Banks are not kept open till 7 PM with overtime provided for workers.
that will not help at all. the banks are apparently running out of money within 2,3 hours of opening. the basic problem is the shortage of small notes. they should have printed enough new 500 and 100 notes before doing this and should've prepared at least six more months but political considerations ( upcoming UP elections) forced their hand and causing all this trouble to the people .

Regardless of doctors' ethics these troubles are government induced which could have been avoided with proper planning.

by rawemotions Sun Nov 13, 2016 8:13 pm

garam-kuta wrote:
rawemotions wrote:
garam-kuta wrote:
confuzzled dude wrote:Not wise given how badly Modi bungled it. Half of the ATMs are inoperable and remaining ran out of cash quickly. And Rs. 4000 per day limit put severe strain on everybody. It is chaotic as not all the gas stations, hospitals and tolls are accepting old currency as announced by the govt. People ended up cancelling marriages as well. This is what happens when govt. tries to cover up its ulterior motives i.e. looking for political gains, as social service. It looks like at the end of the day, all the black money hoarders will be be able to convert most of it into new currencies.
it claims the life of a child.
http://www.andhrajyothy.com/artical?SID=333297
It is very unfortunate. But I do not understand the logic of blaming the administration for this. The doctor in question should be imprisoned.
The announcements had very clearly said Hospitals are to accept Rs500 /1000 notes (that have been de-monetized)
if you know india, you will know that the hospital and doctors are big business to make money by squeezing as much money as they can. they will not have any morals.

But I do not understand why the Banks are not kept open till 7 PM with overtime provided for workers.
that will not help at all. the banks are apparently running out of money within 2,3 hours of opening. the basic problem is the shortage of small notes. they should have printed enough new 500 and 100 notes before doing this and should've prepared at least six more months but political considerations ( upcoming UP elections) forced their hand and causing all this trouble to the people .

I am amazed by the abject ignorance and lack of understanding people seem to have, on Indian politics. Most elections in India have voting blocks. These voting blocks do not change their allegiance (come what may). So elections in India are swing by the undecideds and independents who do not vote in a particular way.

Over the next two months, the organized sector will not be impacted NOR will urban areas be impacted. They will quickly adapt, since most of them are already using cards.

However, the unorganized sector, those living on a day to day basis selling stuff, and street vendors (huge voting block and bulk of the urban poor) will find life very difficult due to lack of cash. Local economy will tank because in many rural areas, the economy has been a pre-dominantly cash economy. Money will be hard to come by. Eventually the effect of black money will go away, and the economy will shrink to the correct size. People's home values will go down.

I actually feel this move could cost him all state elections. I had said so in my basic analysis
.
Thus, we should not look at this purely from an urban area standpoint It will take ages for these small traders to switch to electronic means of cashless transaction. Not all of them quickbooks to automatically figure out their cashflow/expenses/inventory management.

The difficulties over the next two months will be remembered by the people and the incompetence of the banks, in handling the issue, will be played out by all opposition parties , getting the swing voters (small traders, unorganized sector) to them.

Modi basically made what would have been charaterized by Humphrey Appleby of "Yes Prime Minister" as a "Courageous Decision"

That is why it is a gutsy decision. He basically risked, all his political capital (which he earned with Surgical Strikes against Pakistan).

I would be very surprised if NDA manages to win. It might be a respectable number due to some urban areas, but in the hinterland and small towns, with swing voters voting for others, it will be a wipeout.

by truthbetold Sun Nov 13, 2016 10:34 pm

India has a very large population spread over a large geographical area. Their socio economic skills vary significant. It is modi govt responsibility to assess the impact on ordinary family and minimize the impact. Elections or no elections, a failure in implementation will provide Congress a real shot in the arm. His govt must work hard to make this work.

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500 and 1000 notes - is it a wise move?

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