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India raises withdrawal limit as rupee anger mounts

bbc.com

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Re: India raises withdrawal limit as rupee anger mounts

#91

Post by kid101 »

manish_gill wrote: post #71
linuxkerneldev wrote: post #2

My understanding is that India's new rules on the high denomination notes was intended to curtail corruption. This was a major topic of discussion in my workplace as we have many Indian developers. Most of them were very proud that this action was taken. So it was a surprise to me to read the significantly negative tone in the BBC article. As a check, I googled "accuracy of BBC articles on India" and encountered the…

Rather than attacking the messenger and correlating it with the anecdotal evidence from the people you know, try to look at this objectively. - The white-collar middle class of course is lauding this move. Most of them (us) use digital money, are educated, want to see the corruption eradicated etc. - BUT, the majority of the population is poor, working class, not education enough. India is still a cash-based economy.…

the kid did not die due to refusal of notes.

cite source.

Re: India raises withdrawal limit as rupee anger mounts

#92

Post by sanmon3186 »

manish_gill wrote: post #71
linuxkerneldev wrote: post #2

My understanding is that India's new rules on the high denomination notes was intended to curtail corruption. This was a major topic of discussion in my workplace as we have many Indian developers. Most of them were very proud that this action was taken. So it was a surprise to me to read the significantly negative tone in the BBC article. As a check, I googled "accuracy of BBC articles on India" and encountered the…

Rather than attacking the messenger and correlating it with the anecdotal evidence from the people you know, try to look at this objectively. - The white-collar middle class of course is lauding this move. Most of them (us) use digital money, are educated, want to see the corruption eradicated etc. - BUT, the majority of the population is poor, working class, not education enough. India is still a cash-based economy.…

> There is talk going on about a possible Bank Run.

Mind sharing any source? As per my layman knowledge, what's happening here is opposite. Bank have received $30B [1] so far in deposits in last few days.

[1]http://www.forbes.com/sites/timworstall/2016/11/13/indias-gr...

Re: India raises withdrawal limit as rupee anger mounts

#93

Post by kranner »

asenna wrote: post #88
kranner wrote: post #67

Earlier quoted context omitted.

The timing is suspicious though, ahead of state elections in the key states of UP, Punjab, Gujarat and Goa. For campaigns that are largely fought on cash, depriving other parties of cash is the biggest advantage. Better timing would have been to wait until adoption of the Government's own pan-Indian electronic payment scheme ('Unified Payment Interface'), including giving small vendors card reading devices.

There is always a major election coming up in India. By the time we're done with Gujarat (2018), there will be Rajasthan and a few others coming up. Not to mention the next Lok Sabha (Parliament) elections in 2019. Yes, the timing does mean that major political parties in UP would be hurt because their insane amount of hoarded cash is in trouble but really, is that a bad thing? As pointed out in comments above, this…

> If you're on the ground in India, you can tell people are thinking twice before selling their properties for cash (it's very common for people to sell for 70/30 or so ratio for white and black money) / other hoarding activities.

On the other hand, demand for gold has gone up. That's definitely a more fungible form of black money than property.

Re: India raises withdrawal limit as rupee anger mounts

#94

Post by mindentropy »

kamaal wrote: post #31
Manishearth wrote: post #25

Earlier quoted context omitted.

> A majority of Indians don't have access to banks either. Forget banks, many don't have ID . Ration cards exist, but those are tied to your household so you may not easily be able to get access to your ration card (say if you're in a city with family -- and ration card -- back home). In case of estranged women it's even hader. Without ID they can't exchange larger amounts. It's also hard to create a new bank account…

Actually dealing with banks is a luxury which Urban Indians assume is available for everyone. Its not. Most banks are huge red tape in India and corruption is quite common. Even to dispense cash/loans a lot of times local rural banks ask for bribe. Which is why most people go a distance to avoid dealing with banks. This problem was addressed by co-operative societies to an extent, but it doesn't scale though. Debit/C…

I completely agree. We can see the full picture of it now. The banks are such a pain and since most of the banks are nationalized the employees are a real pain. The post offices do not even have proper facilities to store large sums of money and there are cases where rats have eaten currency in lockers!

Re: India raises withdrawal limit as rupee anger mounts

#95

Post by mindentropy »

sundarurfriend wrote: post #64
essdas wrote: post #27

I think the BBC has completely missed the sentiment on the ground. There is widespread support for this. Every single person I've spoken to in the long queues near ATMs have expressed that they don't mind the inconvenience because it will help the country.

Yes, I personally have been very surprised by how positive the reaction has been. My home has a lot of small shops around ("chaiwalla" tea booths, tiny grocery "kirana" shops, little idly shops, lots of roadside vendors, etc.), and the reaction has been almost universally positive. There's of course a bit of grumbling about cash being hard to find in the first two days, but even those come in a manner similar to how…

The problem is that that sentiment will turn sour pretty soon as the supplies will get affected badly. Most of the truck drivers which supply essential goods are paid in cash by their owners. Think what will happen if the payment is deferred.

It might be very sad to say but a lot of these shops exists because of the black money. Some are mere shopkeepers whose owners would have opened these shops to invest their money. Now think what would happen when their cash gets sucked away. There would definitely be a huge loss of jobs.

If real estate is hit badly then a lot of laborers would be jobless overnight. A lot of projects would have to be stalled.

Presently there is an uneasy calm and some sort of schadenfreude but when the dust settles the consequences will not be good.

Re: India raises withdrawal limit as rupee anger mounts

#96

Post by mindentropy »

swatkat wrote: post #37

Ah! Yet another "anti-India" article by BBC ;) This is not the first time BBC is doing it (can we call it as "propaganda" ?) ;) I've seen a few firsthand instances of people who hoarded illegal cash impacted by this demonetization move. Yesterday, somebody even dumped wads of cash into a lake in Bangalore (near KR Puram area). I suggest people here to read this thread: https://www.reddit.com/r/india/comments/5c195e/d…

It is all funny anecdotes. Good for a laugh and some happy revenge.

Now remember that not all have just hoarded the cash. Many have actively invested and this investment actually goes to the poorer sections of the society as daily wages. What would happen if that cash is sucked out? The rich class can live without the investment but the poor have no way to go as they suddenly find themselves jobless.

Next the government will throw cash around with policies such as NREGA to help the poor and then again you have all this money sloshing around in the economy albeit with higher denomination and newer currency.

Re: India raises withdrawal limit as rupee anger mounts

#97

Post by mindentropy »

wav-part wrote: post #12

My initial gut reaction is/was, a costly political stunt to fullfill an election promise. But I will wait when we have figures about cost to economy vs additional tax revenue. It also should be taken into account that Rupee now is even more unlikely to become a global currency. Instead of money going directly to corrupt bureaucrats now it will directly going to politicians to be spent on unsustainable welfare (subsid…

There will definitely be inflation and cost of goods will steeply rise in the short term. I am not sure whether we can even survive long term.

The taxes and the present losses will simply be passed on to the consumer. This is because there were legitimate services being provided with such black money.

Re: India raises withdrawal limit as rupee anger mounts

#98

Post by personinsg »

dragonsh wrote: post #78
linuxkerneldev wrote: post #2

My understanding is that India's new rules on the high denomination notes was intended to curtail corruption. This was a major topic of discussion in my workplace as we have many Indian developers. Most of them were very proud that this action was taken. So it was a surprise to me to read the significantly negative tone in the BBC article. As a check, I googled "accuracy of BBC articles on India" and encountered the…

BBC is right in its analysis, this measure only targets 20% of Indian wealth. The richest 5% owning 80% of Indian wealth are at ease, only poor and middle class troubled. Moreover this 20% money will be available to them as cheap loans. The total money owed by big corporates in India is way bigger then this parallel black money. Also the person Rajan who was planning to reign this loans is forced out of office. Modi…

I am not sure about BBC but now people know why Rajan previous RBI governor and govt has differences and he was forced out.

Re: India raises withdrawal limit as rupee anger mounts

#99

Post by test001only »

firasd wrote: post #18

What's interesting is that Bollywood stars whose names were in the Panama Papers are lauding this 'demonitisation' move... it kinda underscores that real 'black money' isn't stuffed in mattresses, it's stored more cleverly in different types of assets, companies, offshore accounts. Raghuram Rajan, former Governor of the Reserve Bank of India, had this to say a couple years ago about the idea: “Unfortunately, my sense…

Common people can very well buy milk and bread.

Re: India raises withdrawal limit as rupee anger mounts

#100

Post by perseusprime11 »

linuxkerneldev wrote: post #2

My understanding is that India's new rules on the high denomination notes was intended to curtail corruption. This was a major topic of discussion in my workplace as we have many Indian developers. Most of them were very proud that this action was taken. So it was a surprise to me to read the significantly negative tone in the BBC article. As a check, I googled "accuracy of BBC articles on India" and encountered the…

Actions against corruption are always tough. There is no easy way to get black money out. Short term it will hurt even common people but this will play out nicely in longer term.
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