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  • Category: Miscellaneous

    RBI announced 99% old currency notes were exchanged by people

    RBI announced today 99% of the total old currency notes were returned back to the government. 15.28 lakhs crores value 15.44 lakhs notes were returned to government. Of the returned notes, 7 lakhs 62 thousand fake notes. So even the fake currency also got exchanged for white currency. What is the lesson learnt by the government from this demonetization process? How much black money removed from circulation? What economist estimated, the same truth it has happened. So what is the profit got by common man because of this process? The government act brings into my memory an old Telugu proverb - To dig a hill to hunt a mouse.......Even now also do you think demonetization is a correct step taken by Mr. Modi or it is a propaganda created by BJP to win elections?
  • #607379
    It is really great to know that nearly 99 percent of old currency including duplicate notes got exchanged during demonetization period and now the banking system is free from duplicate notes. Through demonetization process what the government could bring a see change in the public who were now forced to avail e transactions or paperless bank transactions for every need. Government wants to make aware that henceforth relying on hard cash should be minimized and maximum transactions should be done through fund transfers. The customers are also benefited. Previously we used to pay commission for taking a DD in favor of some one or organization and now with fund transfers online at any given time, we can transfer up to 40,000 to any one across the the country and with no additional charges. Such kind of arrangement was not there previously as every transactions were charged and debited.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #607383
    Recently Telangana CM and other economic experts announced again through Rs.2000 currency black money is accumulating more than before. Because of negative attitudes followed by Banks a very low percentage of people doing online transaction. Recent survey of Electricity department of A.P. says even with lot of propaganda for online transactions very less percentage of people are doing cashless transactions. My question here is whether the government is doing the required home work to introduce schemes or not? Is it taking the pros and cons of the schemes which may affect the people and government?

  • #607384
    For the first month after GST was introduced, people paid their taxes through online and the government has netted over 94,000 crore from state, center and International tax payers. Thus the scheme after demonetization is working.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #607398
    I completely agree on Ramakrishna views. Telangana Government advertises there is a cashless system in Rythu Bazar but when I went there no stall is having Cashless Transaction in Rythu Bazar. Central Government completely failed in Demonetization.It is regarded as a failed experiment.with out doing any home work they have done demonetization at that time I raised the same question in one thread the same thing happened now.
    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.

  • #607404
    This news reminds me of the wonderful heart touching speech "Give me 50 days and burn me alive if I am wrong".

    What has been achieved through this demonetization has been out through facts and figures today. This was done in an effort to curb black money but the figures state otherwise. Did this help in converting black to white?

    Though this was buffed up to seem like a surgical strike against black money it ultimately ended up like a fake encounter.

  • #607409
    I cannot say that the demonetisation is failure just from the figures given by RBI.

    What can be inferred from the data given is that most of the money has come back. From this the number of fake notes have to be removed. Only that much true money has come back. We can then presume,the difference is still hidden or destroyed. That is not going to come back.

    How much black money has come back cannot be assessed from this data. That is because black money is actually true money(not fake) but is not brought under tax purview. As the money has come into accounts view during the FY, these will from now on be under tax surveillance. The people have to pay tax necessarily. By their coming into accounts glare, these quantity of money could not be recirculated or turned over for further black money creation.

    The Income tax collection increase will give an idea of how much money was out of tax net. Proper tax culture is one parameter to prevent black money growth.

    So,rather than the quantity the main result is the change of attitude of people in general. The demonetisation also froze and killed with an instant stroke all the fake notes kept stored and undistributed by the vested and inimical interests. We will never come to know how much was that.

  • #607419
    #607409 Printing of new 500 rupees and 2000 rupees costs more than demonetization profits. So it is treated as a failed experiment.
    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.

  • #607420
    As Mr. Venkiteswaran has pointed out the data released by the Reserve Bank of India (RBI) do not indicate the success or failure of demonetization. We can't surmise how much black money has been recovered. But the reaction of various political parties and the cash recovered from politicians and traders during raids after demonetization do indicate that something has definitely happened.
    Beware! I question everything and everybody.

  • #607438
    @607419. That is not right logic. For a theft of a small gold chain worth 1000 rupees we/government may spend ten thousand rupees on case and complaint and catching and punishing the culprit. Do you say that just because the amount spent on catching and punishing the thief is more than the lost chain's worth, we should not complain or try to catch the thief ? One should see the deterrent effect and the message sent across. .

  • #607439
    Demonetization has brought money into banks and into tax purview. That means earlier which is lying with people without any account has become accountable. People now are forced to pay tax money for that. So the tax collection will improve and that is indirectly an outcome of this action only. So far RBI announced about 1000 rupee notes only. No talk about 500 rupee notes. There may be some recovery there also. We can't say this is a failure. If Bank officers properly worked after the announcements, this might have given very good results. But some bank officers helped the culprits in bringing money back. But many people who deposited more cash in their accounts are now facing the music with IT department and lot of money they may have to pay as tax to come out of problems.
    always confident

  • #607447
    #607438. There is no logic in your example. I lost a 500 rupees somewhere to know where I lost I have to spend 1500 rupees.Do I spend 1500 rupees to know how that 500 rupees lost?Who has got punished in Demonetization?Do they punish are sent behind the bars any industrialist or business man or any politician.
    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.

  • #607460
    I do not trust on this information declared by RBI, they are clearly getting operated by NDA Government, so they are not ready to give any information when RTI activist asked, and said no to answer, whether they are bound to answer, and creating new law and system so that RBI will not be answerable, and yes in mean time they are declaring different statement, during demonetisation already they had told the same ( it is around march 2017 that almost 95% currency which was in system already back to the RBI, after that they gave another statement, then denied to answer to RTI activist, and now again a new number.
    So I believe that what ever they will forcefully implement like deduction from savings deposit, higher interest on getting loans from bank we have to accept, until unless a Good Governance come to rule India.

  • #607471
    The demonetization was not done by Govt for making a profit. The basic idea was to clean the system suffering from various ailments and to that extent Govt was quite successful.

    Now there is a fear in the mind of the people that Govt can demonetise any currency any time and they should not hoard it. This will go a long way in curbing the black transactions.

    Govt is bringing many legislative changes which are forcing the builders and businessmen to keep a record of their collections from clients and anytime any discrepancy in that will be questionable.

    Govt can not change the system overnight and the efforts like demonetisation may also look small and unwarranted to some people but fact is that these are the small small ways by which Govt is planning to repair the rusted system.

    All efforts of Govt are in vain if public does not give support in it's genuine actions.

    Knowledge is power.

  • #607473
    RBI is supposed to keep a record of notes issued by it, notes available in banks or similar institutions, notes spoiled and subsequently burned or destroyed by RBI etc.
    From this data they can find out how much currency was deposited by the public back in the banks.
    From this they can also find out how much is still with the people which was not deposited for the fear of getting caught red handed. This currency must have been destroyed by the people due to the said fears.
    There is a large part of population in this country who are ready to accept a loss of 100 Rupees to save 50 Rupees. You can term them as foolish. But it is true.
    Even there are educated foolish also who are doing same mistake.
    Present income tax rates are on higher side but if Govt reduces these to bare minimum still some people will not pay tax. They feel they have done a brave thing by saving tax. They talk with proud about their techniques to save taxes while having leisure time with their close friends.
    So the claim of 99% receipts by RBI may not be a very big thing but until people voluntarily pay taxes this menace of black money will remain there.

    Thoughts exchanged is knowledge gained.

  • #607490
    I don't understand with demonetization how they clean up the system. There are many countries who failed in this experiment and India is one amongst them.If there is a genuine action every person will support it.It is not a genuine action there is a negative reaction.
    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.

  • #607647
    RBI Press release of the statistics as well as Mass media through out the country including BJP supporting News media is clearly saying demonetization is completely a failed experiment but Mr.Modi's fans and big section of people of India still believing Mr. Modi's experiment is a great success. Government believed and announced that 5 lakhs crores of the banned currency notes may not be returned and this is the gain they are going to get due to demonetization. Final analysis shows only1% of the total currency i.e. 16 thousand crores has not returned to the government. But to print new currency notes government has expended 21 thousand crores which shows a loss to the government, people were put a lot of hardship, many lost their livelihood and now the GDP April-June quarter a 3 year low of 5.7% under Mr.Modi's government.

    In my opinion, because of demonetization those who have hoards of black money have changed it into white including political leaders of all parties. In my view demonetization is an election strategy designed by BJP party (like a call of inclusive of everyone) to lure voters in the name of honesty and remove black money. Recently we have seen so many elections in UP, MP, Goa, Manipur, Nagaland, By elections in various places of the country after demonetization. Do you think these elections were carried out with election limit money for the expenditure? Just a week back in Nadyala By election it is estimated 2000 crores of money was spent by both ruling and opposition party in a single constituency. People, Media and even both the political party leaders saying that they have spent that much money on off record. Then IT became so strong after demonetization how the political leaders are spending this much staggering type of amount in a single constituency? As Election Commission caught crores of money from contesting parties in Tamil Nadu have to countermand one of the By election in Tamil Nadu. If all the black money is removed from the country how this staggering amounts coming into notice of the government authorities and public? Those who listen patiently, leaders of political parties say many things and keep a Cauliflower in the ears of public and make us fool.

  • #607652
    Risking repetition and elaboration,( I seek your pardon) I would like to mention a few things here:

    1. At least a few people still think that black money means fake notes. That is wrong. Black money held as currency ( not the fake notes), is also be legal currency held and transacted by people, but without accounting properly thus avoiding the tax due on such income and further transactions.

    2. There is no precise estimation of black money. In fact there is no perfect method to calculate the quantum of black money. All that is presumed is from guess and projections from the unaccounted and tax evaded money caught in raids. In fact black money held in cash is just a small fraction of the total unaccounted wealth and assets.

    3. As no one can say how much was the black money before demonetisation, so no one can say how much black money has come back to the accounting system and under tax net.

    4. The RBI or government will have only the data of currency under circulation with people plus that held with banks minus those which are impounded or destroyed under accounting. Mention in post no 607473 is correct to that extent. However the portion of black money held as currency is also included in that only.(pls refer para 1 &2 above)

    5. Data from RBI shows that only about 1% of the legal currency under circulation before note withdrawal is now rendered invalid. Only s much amount has been forsaken by those who had kept the money as unaccounted.

    6. We can infer two things from this data: (a) People got scared about the firmness of the government and felt that declaring the money by remitting to bank channels is better now as the future actions of the government may not be so kind and lenient. By remitting it to the banking channels at least they could save the money after paying the tax due on it. (b) Only those who held fake currency without being aware of that have remitted it to banks. Those who knew that they had fake notes and those who were behind the fake note rackets did not remit the same fearing getting caught. Some portion of the black money could have been in fake notes also.

    7. How black money is generated and transacted and how it is continued as unaccounted causing a cascading effect?

    Suppose in a property transaction the buyer pays 5 lakhs as physical cash and not showing it in the ded and not paying stamp duty and fees, then that 5 lakhs is now unaccounted. The buyer and seller both cannot show it in their accounts as the amount is not shown in consideration in the deed, and tax or stamp charges and registration fees have not been paid on it. The seller who got that 5 lakhs have to spend it again on some unaccounted transaction only. Suppose he spends the amount on buying gold paying cash without a proper bill. Then the govt loses tax on the gold sale, the gold merchant has now 5 lakhs unaccounted money. Naturally he also has to spend the same in another transaction or mixing with his already held unaccounted money. Just from this example we can see that the original 5 lakhs legal currency has now become black money of 15 lakhs.

    8. The example in 7 is just a small illustration. Black money gets circulated faster for obvious reasons and changes hands frequently. So the cumulative effect is many times more. However the govt will not have any knowledge of this unless it is caught after some raid somewhere in the line. Another point is that the black money is mostly used for illegal and immoral transactions. So black money promotes crime and law and order issues also.
    9. So now we can presume that a good portion of the black money held( in legal currency) with individuals has somehow come back to the banking channels. For the time being it has prevented a good multiple of probable black money, preventing its turnover.

    10. How much black money gets generated in future depends on the governments surveillance and compliance mechanism .From what is received back now also , the final knowledge o how much was black can be known only by the end of tracing the source from the questioning of the persons who remitted the money and raids if needed.

    11. However one thing is sure. There is a greater awareness about the need to comply with tax and accounting, and a fear of law reaching them if not. The demonetisation aims will succeed onlyif the government puts in place all the needed further actions and plans and stays determined in the path of curbing the menace of black money. A lot more is needed.

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