281–290 of 336 posts
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Largest banknote in UK is £50, largest in EU is €500. That does not imply a staggering difference in purchasing power between £ and €.
I guess what the OP meant was that the difference in what the highest note can buy is staggering.
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It's a card you can play once and will only work against small businesses like restaurants and other stores that deal in cash. The big fish will get away as they most likely already have their money laundered and converted to other assets. They wouldn't be holding all their cash in a garage somewhere like Walter White :) I think the one of the big reasons (if not the only one) of doing this is to be able to introduce…
"...converted to other assets" These is mainly real estate assets. A lot of this black money is laundered to the builders who in turn do not declare a large part of it. Thus my hypothesis that it is the builders that will be hit the most. I'm expecting a real estate market crash.
While this sounds great on face value, I doubt this'll solve the root of the problem. Why did we have so much black money in India? Coz people didn't want to pay taxes. Why didn't people want to pay taxes? Because they got nothing in return. Governments (esp Indian) have been historically self serving and power hungry. Tax money is usually either lost by PSUs loaning to the Mallyas of the world or other corrupt bulls…
No, they didn't pay taxes because there was no repercussions in evading them. Humans work as Nash equilibirium, and anyone would skip taxes if they could.
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It's worth noting that withdrawing certain banknotes is a classic move. Here's North Korea doing it in 2009: https://en.wikipedia.org/wiki/North_Korean_won#2009_revaluat... And the US did it in 1969: https://en.wikipedia.org/wiki/Large_denominations_of_United_... In both cases it appears that the main goal was tax revenue. In NK, against private traders, and in the US, against organized crime.
The US is kind of funny, we've (as far as i know) never withdrawn backing for a bill. If you have a silver certificate, you can spend it on a pack of gum. If you have a $1000 bill, you can deposit it in the bank. You might have some hassle getting the bank to believe you, of course, those bills are probably in pretty poor shape. But you should be able to exchange them for new currency. Although, it might be worth mor…
However, the government probably is required to take that money to pay nay taxes, although I do not know how you can pay any taxes to the federal U.S. by cash. Maybe a customs duty at a border crossing?
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Hey it's you! there's quite a bit that has been achieved by successive Indian govts on shoe string budgets. We've had the green and white revolutions, the IITs and other edu programs, large medical programs, ISRO (and the sensing tech that comes with it). This is from a once impoverished country which later had to deal with the fallout of weaker institutions, brain drain and corruption/dacoity/booth capturing and a w…
> Don't forget it's a chicken and egg issue as well - without funding you don't get services, which makes you blame the govt and not want to give them more funding. Tell me how the taxes government already has, doing ? > We've had the green and white revolutions, the IITs and other edu programs, large medical programs, ISRO (and the sensing tech that comes with it). Correct me If I am wrong, this does not even accoun…
Yes, but there are a few other areas that take a major portion of the take spending which we forget to acknowledge in such discussions because it does not affect us muddle-class / affluent people directly - Defense, subsidy of urea and other rural benefits programs (yes, agriculture is in a mess and a lot more can be done but with the introduction of Aadhaar and Jan Dhan, things are looking up)
> Indian governments (current & previous) has failed its people and its most undeserving of taxes.
Yes the previous government had really fucked up (I tend to think UPA did a decent job in it's first term, it's the second term that they really got greedy and hence their state now), but we should give credit to the Modi government for a lot of the economic reforms of the past couple years.
Please note, I'm pretty neutral on politics and do not stick to one or the other camp. This govt. has messed up on a lot of the social issues (Beef bans and communal tensions, JNU student protest situation, Kashmir violence and many more).
However, on the economic front, India is really moving in the right direction - Focusing on Startups and business friendly policy changes, making brand India attractive to the world (FDI), passing the GST (massive task and looking to be implemented pretty quickly come April), introduction of UPI [1] (this will definitely move the country forward to a more cashless economy), integration of all the digital services (Aadhaar, Digital Locker, etc), black money declaration schemes and prosecutions (The situation on the ground is actually changing, people are much more scared of hoarding black money now) - These are just some of the things off the top of my head (Credit to both the Govt and the RBI).
Don't also forget the aggressive change in stance on how to deal with issues coming from across the border.
Again, there's always going to be a million other things that can be done better. But you have to admit this government is doing a much better job than a lot of previous ones
[1] https://www.quora.com/How-will-the-UPI-interface-of-NPCI-cha...
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And India doing it in 1978 ( http://www.thehindubusinessline.com/money-and-banking/highva... )
The difference is in the sheer volume of currency being taken out of / replaced from circulation almost 80% of the value. https://twitter.com/d_jaishankar/status/796012168873320448
Not only replacing 80% of the value, but also added 220 Million bank accounts in a span of 15 months. 2/3 of the US population.
https://www.reddit.com/r/worldnews/comments/5btovy/indian_ru...
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It will work for the current undeclared income . Soon people will begin hoarding the new currency notes. Or become wise and not stash money in currency. Under the recent tax amnesty scheme if somebody had declared rental income, or business income, they will have to continue declaring it for years to come. I personally believe that the bigger players in undeclared income are not keeping it in cash, they have assets b…
> The current method is a way to fight black money. For corruption there are other ways, and maybe some will be taken. "Black money" term is so misplaced, it should be untaxed ruppes. It wont affect untaxed assets (overeseas and here). And guess who has most untaxed ruppes and who cant afford to lose any more ? Low/Middle Class. Good job Modi. You just alienated they very people who voted you in the office.
Low/Middle class is indeed saving 30p per rupee. But they aren't storing them in 1000 rs notes, they are spending that to better their lives. This is really against Medium to big businesses, and rich people like jewellers, goldsmiths and builders.
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I too do not think this move alone would solve "Black Money" problem in long term, but it certainly will go a long way in setting a better trend. > You just alienated they very people who voted you in the office. All govts till now have been doing politically right thing, rather than morally right. If a Govt., for once, tries to go beyond the vote-politics and do what's right, shouldn't that be a welcome change?
> I too do not think this move alone would solve "Black Money" problem in long term, but it certainly will go a long way in setting a better trend. Only if the problem is inadequate tax revenue, which is not the problem IMHO. Its tax spending . > All govts till now have been doing politically right thing, rather than morally right. If a Govt., for once, tries to go beyond the vote-politics and do what's right, should…
It is hardly going to fix the black money problem. Rich people have so many employees to do the bank run for them. Within the next month, you will see a huge spike in real estate market. People with black money will dump it in the real estate market. (If you are not an Indian, this is how it works. You buy an apartment/home/building for the amount X. But you declare it to the government that you bought it for X/10. T…
Same for gold. How much can one goldsmith/jeweller's revenue increase in a year? Same for agricultural income. Can you suddenly declare 500% increase? (Oh well, agriculture income could have been declared earlier too anyway).