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  • Category: Miscellaneous

    Why most of the economists are talking against demonetization?

    Most of the economists like Amartya Sen, Manmohan Singh, Kaushik Basu, Proneb Sen, Paul Kugman, Chidambaram, Larry Summers and most of the high profile Auditors in general are openly talking against demonetization and they are saying that it don't yield any fruitful result for the country or for the government. Do you think all these great economists fail in their thinking? On what basis they are saying this demonetization program will be a failure? On one hand a great number of economic professionals are in one view and how Mr.Modi is going to prove that he is on the right side of the issue.
  • #585611
    What I would say is the envy of the economists of our country who did not think the thing that Modi thought and executed. It is the helplessness and incapability of the economists to feel ashamed of their inefficiency that makes them to degrade Modi's good efforts.

    The economists who blame Modi should ask themselves as to what they have done for the country's economical development and progress. If they cannot do something, they should allow others to do better things. Even a layman would say that Modi's action is for the betterment of our nation.

    No life without Sun ¤

  • #585614
    It is true that many economists have spoken against demonetisation, but not all. At least one Indian economist, Dr. Bibek Debroy, has supported it.
    Caution: Explosive. Handle with care.

  • #585622
    Yes support has come from Dr Bibek Debroy and even Bimal Jalan on Modi's demonetization. But it is surprising to see dissent voice from eminent like Amartya Sen, Manmohan Singh, Kaushik Basu, Proneb Sen, Paul Kugman, Chidambaram, Larry Summers whom I think does not have the far vision to appreciate the long term benefits of the action initiated. Some great actions begin with a single force and if the action is good and starts giving desired results, the support would be overwhelming and sustaining. Still 20 days to go and already CBI raids across the country proving to expose the various misdeeds and even new currencies are recovered from the tricksters. It takes time and energy to prove that the action was right. But again mudslinging and maligning would continue unabated.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #585624
    Let's forget about Man Mohan Singh and Chidambaram for a moment, because they would go on suporting Congress viewpoint. Amartya Sen would examine every aspect from Marxian economic point of view, which can't explain all economic activities. Let's wait for comments of Dr. Jagdish Bhagwati. To me, his view regarding de-menetization is the most important.
    Caution: Explosive. Handle with care.

  • #585630
    I fail to understand one point - how is it going to unearth black money? People are getting their old black money converted to new currency by paying a cut of 20 % - 35% or even more.

    Here is an example:- Suppose X has 100 Lacs in black money. He approaches Y to get his old currency converted to new currency. Y charges him say 40% for that. X agrees to that.

    Now Y approaches Z to convert old currency to new currency. Z charges Y say 25% for that. Y agrees to that. So, now X gets 60 Lacs in new currency, but that amount remains as black money. Y gets 15 lacs in new currency, but that amount remains in black money. Z is saddled with 100 Lacs in old currency. He approaches his contacts in banks & gets the 100 Lacs converted to new currency by paying 12%. The 100 lacs reaches a bank in old currency, who sends it to RBI.

    Now the following persons have following amount, but in black money in new notes.
    Y -> 60 Lacs (100- 40 = 60)
    X -> 15 lacs (40 - 25 = 15)
    Z -> 13 Lacs (25 - 12 = 13)
    Contact in bank -> 12 Lacs

    Who paid the tax for those 100 Lacs in black money? NONE.
    The only difference is that in the initial stage only X had the 100 Lacs and now four persons have that 100 lacs, but ALL IN BLACK MONEY.

    This is what is happening all over India after Nov 8th. Maybe that is why the economists are talking against demonetization!

    When you talk, you are only repeating what you already know. But if you listen, you may learn something new!

  • #585632
    All cannot be X,Y and Z. All may not get their black money distributed. If this is the case, another demonetization will fully eradicate the black money. Presently, the bank authorities are the culprits who have helped the black money holders. Modi should ensure stringent action against the bank officials who involve in such ill practices.
    No life without Sun ¤

  • #585660
    I may be required to correct but as per my observations most of the economist predict on the basis of current market situation, which is at low no doubt. But with time, things are going to improve only.
    How? When one Mr.X is declaring 100 lac, and he will get back 60lac or so, how it will be beneficial to economy and all?
    1. Money will become accounted, Mr.X will have to pay tax on it from next year.
    2.40 lac bene fit to government
    3. Government will get easy control/surveillance over all suspected areas, department, business for future also.
    4. It is leading country towards more cashless transactions,which will make it easy to trace all the exchange of money taking place.
    One Simple example, one famous shop, giving two lac per month as rent still do not pay any tax. Why because their earnings cannot be traced. Online transactions linked to PAN card will lead to like opening browser history. However they may still find some illegal ways to hide it but once they come under radar, there are higher possibility of being caught or even just it fear will work to some extent.

    Regards:
    Chitra Rana

  • #585666
    Chitra,

    Who said that X is declaring his assets of 100 lac? In the example, he is just getting his black money in old currency converted to new currency unofficially. That means that the 60Lacs he gets after the deduction is again black money.

    Ohh please, Mr Sun! If you have not heard of something or have not seen something it does not mean that the thing or the system does not exist. The chain in the official system is something like this

    Printing Press -> Currency Chest (RBI) -> Bank's central currency chest in regions-> Banks -> customer

    What I think is that maybe one or two stages are being skipped/avoided in the chain and the money might be directly reaching the end user.

    When you talk, you are only repeating what you already know. But if you listen, you may learn something new!

  • #585672
    All the members must note that, greater home work and planning being done by the Finance Ministry and the IT authorities who are now holding the data base of wealth details, cash details at bank and now they will swoop on those address which wont correlate with what is submitted and what is in possession. Till 30th Dec there would be some sort of relief to the black money holders and after 30th, the money seized would belongs to government and the person would be put behind bars for seven years. So never ever think that PM Modi is not serious on hoarders so far. More stringent actions are in store. Just wait for the new year blast from Modi.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #585686
    There are basically two reasons for economist opposing the demonetisation or currency withdrawal by Modi government.

    1. Sheer political opposition. Major opposition we see in India is because of that. As it is done by the opposite party, it is straightaway opposed.

    2. Lack of such precedents and hence not able to support with confidence.
    There is no precedent where in demonetisation with such large canvas and quantum was implemented with such suddenness. There is no dependable result or data to confidently back ths present event. Hence economists hide under safety by giving ambiguous interpretations or partly supporting and partly opposing. By this they can take credit for whatever happens ultimately.

    Anyway, the present currency withdrawal measure is going to be historic and precedent lesson in future for economists and governments.

  • #585688
    As there is a defilement and dark cash in Little nation like Philippines which involves less states where Peso esteem is .40 more noteworthy than INR many individuals will tell as a result of less populace despite the fact that there is a debasement and dark cash that won't impact the nation improvement let it be a reasonable call. China the universes biggest populated nation their cash is YUAN that is 10 times more noteworthy than Indian INR the most recent reports debasement and dark cash File uncovers that China stands second on the planet regarding defilement and dark cash why China is not having any stop being developed? As a matter of first importance discover a response to the question. There is no response for this. This will tell Modi Demonetization won't yield any productive outcome... It is a election stunt..... what's more, for TRP rating.....
    A blunt knife or rusted knife can't be useful for anything just for the sake we call it as the knife similar to PayTM series or Sachin or Virat records.

  • #585690
    https://www.google.co.in/search?q=list+of+countries+by+black+money&oq=black-money-outflow&gs_l=serp.1.0.0i71k1l8.0.0.0.4298.0.0.0.0.0.0.0.0..0.0....0...1c..64.serp..0.0.0.wRgobr6HACE(Black Money List of Countries with highest annual illicit outflows.
    China leads the world over the 10-year period with US$1.25 trillion in illicit outflows, followed by Russia, Mexico, India, and Malaysia.)

    http://www.worldblaze.in/top-10-countries-with-highest-black-money-in-the-world/ balck money in Philipines 6th and 8th India... As their GDP growth is similar.....

    A blunt knife or rusted knife can't be useful for anything just for the sake we call it as the knife similar to PayTM series or Sachin or Virat records.

  • #585827
    In my previous response (#585624) I said that I had been waiting for the comments of Dr. Jagdish Bhagwati. At long last, we have received his opinion. In an interview with Barkha Dutt, the famous anti-Modi journalist(?), Dr. Bhagwati has said: "Criticism of Notes Ban Cockeyed, Critics shooting from the hip".
    Caution: Explosive. Handle with care.


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