Demonetization an utter flop

by silvermani Thu Aug 10, 2017 12:07 pm

What a circus, all that hoopla for nothing!

A Parliamentary Committee on Demonetisation has submitted its report, which will be tabled during the Monsoon Session of Parliament. Accordingly, the report calls demonetisation a blunder. Not a single objective has been met, it reportedly says. Findings of the Committee reveal no major black money was found. It says Finance Ministry accepts that only details of 4,172 crores of suspicious money which could be black. (Prime Minister Modi had predicted 5-7 lakh crores would have been black). According to the Committee’s findings, demonetisation had no effect on terror funding. Neither cashless nor was less cash society formed as Finance Ministry was projecting. People have shifted back to pre-November 8, 2016, level cash transactions. In a further revelation, the report says demonetisation killed small scale industries and major unorganised sector. Bhartiya Mazdoor Sangh, a trade union affiliate of BJP, has reported a loss of four crore jobs and shut down of over three lakh industrial units. Report has questioned decision making authority and termed all decisions were taken without planning, like size of currencies not planned according to ATMs, 2000 rupees note was brought in without any smaller denomination note to exchange, no considerable amount of currency printed for supply which led to huge rush to banks and ATMs, rules changed on daily basis proved flawed planning. Till date, ATMs remained dry in rural areas.

by smArtha Fri Aug 11, 2017 10:22 am

'Unusual' cash deposits totalling Rs. 1.6-1.7 lakh crore were made during the demonetisation period, says a research paper posted on the RBI website. In nominal terms, it said, the excess deposits accrued to the banking system due to demonetisation are estimated in the range of Rs. 2.8-4.3 lakh crore. "The 'unusual' cash deposit in specific accounts, which are usually less active, is estimated to be in the range of Rs. 1.6-1.7 lakh crore," according to the paper, 'Demonetisation and Bank Deposit Growth'.

by truthbetold Fri Aug 11, 2017 11:26 pm

How come none of the papers carried info on the report?

I do not about know how much black money was unearthed by demonetization but real estate prices were knocked down because of demonetization.

Per article, current economic growth is jobless growth. Any statistics? Based on ground reality, job growth is anemic or absent in my opinion.

by confuzzled dude Sat Aug 12, 2017 4:42 pm

Let alone a windfall, the RBI has not been able to protect its income, thanks to demonetisation. For 2016-17, it will pay Rs 30,459 crore in dividend to the government, compared to Rs 65,876 crore it paid last year. There are broadly three reasons for the lower payout, directly or indirectly linked to the November 8 2016 decision:

First, the central bank is understood to have spent about Rs 15,000 crore on printing new notes. This money wasn’t budgeted, because the note-ban decision was supposed to be a surprise move.
Second, when people rushed to deposit demonetised notes, banks ended up with huge piles of cash and left the financial system with excess liquidity that could have stoked inflation or triggered other imbalances.

The RBI was forced to conduct reverse repo operations: meaning it had to borrow short-term money from the banks to suck out excess liquidity. Some estimates put the excess liquidity to be as high as Rs 8 lakh crore in early January, which means the RBI must have paid a fair amount in interest charges to the banks.

http://www.hindustantimes.com/opinion/script-gone-wrong-rbi-takes-demonetisation-hit-cuts-dividend-to-govt-by-more-than-half/story-y8lXWKpupQecLnTA9AwSjJ.html

by Seva Lamberdar Mon Aug 14, 2017 9:23 am

smArtha wrote:'Unusual' cash deposits totalling Rs. 1.6-1.7 lakh crore were made during the demonetisation period, says a research paper posted on the RBI website. In nominal terms, it said, the excess deposits accrued to the banking system due to demonetisation are estimated in the range of Rs. 2.8-4.3 lakh crore. "The 'unusual' cash deposit in specific accounts, which are usually less active, is estimated to be in the range of Rs. 1.6-1.7 lakh crore," according to the paper, 'Demonetisation and Bank Deposit Growth'.

Don't forget the effect of demonetization on people in huge numbers (in crores) in making them open new bank accounts, which they otherwise (without demonetization) were reluctant to do and wouldn't have done.

by TruthSeeker Mon Aug 14, 2017 11:22 pm

Demonetization takes some BALLS for any leader to implement, let alone in a country like India.

Corrupt Congress.....phew.......THE MOST HONEST man in Indian democracy - Dr. Manmohan Singh - had the MOST CORRUPT governance in Indian history.

Ironic.

by confuzzled dude Sun Aug 20, 2017 8:24 am

TruthSeeker wrote:Demonetization takes some BALLS for any leader to implement, let alone in a country like India.

Corrupt Congress.....phew.......THE MOST HONEST man in Indian democracy - Dr. Manmohan Singh - had the MOST CORRUPT governance in Indian history.

Ironic.

Don't confuse courage with dictatorial tendencies

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