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How to Lose $3B of Bitcoin in India

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Re: How to Lose $3B of Bitcoin in India

#61

Earlier quoted context omitted.

I'm a developer in Bangalore. It was glorious. One thing to understand is that in India regular small time business owners are involved in a lot of tax evasion. They don't report their income fully and thus always have a huge stash of cash lying around. The biggest use for this is to buy real estate. Before demonetisation, if you want to buy a house or apartment it was usual to discuss the cash and registration amoun…

How are you disadvantaged? A majority of the indian economy is in the unorganized sector - and India has large tools to ensure that we recover taxes via transaction taxes. All this does is demolish that sector - and thus harm the larger economy on which the organized sector depends. Wishes and horses - we may want the whole sector to be organized and transparent - but this isn't going to happen quickly. Its going to…

> How are you disadvantaged?

Umm... what? Are you sure you're replying to the correct thread?

> All this does is demolish that sector - and thus harm the larger economy on which the organized sector depends.

Wrong, this converts a large part of the unorganized sector to organized. Contrary to your assertion, this has helped include the large unorganized sector in the growth story of the country. I believe this is why we're seeing record economic growth.

> but this isn't going to happen quickly.

OK, doesn't mean we shouldn't try to help speed it up.

Re: How to Lose $3B of Bitcoin in India

#63

Earlier quoted context omitted.

> Now, all of this bullshit is gone What? > I'll have to pay everything from my bank account, which will get tracked eventually to the seller I purchase my house from. Sorry dude. You are disconnected from reality. Workaround always exist. People still prefer to pay, as much as possible in cash, to save on that huge registration fees. This demonitization was just a smoke in people's eyes. Those big thugs are still sc…

> Workaround always exist Of course. Every system has workarounds. > People still prefer to pay, as much as possible in cash, to save on that huge registration fees. For large real-estate companies, like Aparna Constructions in Hyderabad, most of the transaction is with fully accounted money. About 10% of the transaction is with un-accounted for cash. Cash transactions are happening with smaller builders, but even th…

>>Cash transactions are happening with smaller builders, but even they are finding it difficult to find buyers with a lot of liquid cash.

Its impossible to register a property in Karnataka, without a PAN card/number. So in short for high value transaction its already possible to have tax accountability. Same with jewelry. The question is that of enforcement. You don't need to demonetize anything for these things.

>>Perhaps, but along with the introduction of GST, I now find even traditional traders who usually prefer not to give a bill with a sale (for construction items, cement, steel, electrical wires, equipment, etc) are insisting on a GST bill. It was a really big surprise to me.

What is going to be a bigger surprise to you is discovering a few years down the lane that a full scale parallel unregulated economy is in motion.

In fact that is already the case with a lot of small time things now.

>>Also, this is a political masterstroke.

Lol

>>Most of the country is below middle class and hardly every see a 2000 Rs. note.

Middle class these days is like people who make a good 30-40K a month. These people see a lot of high value notes.

>>Most of them are happy that the rich are finally 'getting it'

What do you think the year is? 1985?

The rich don't exactly keep their money beneath their mattress these days.

>>My personal opinion is that these sorts of actions are required to take the populace from cash to digital transactions.

>>With demonitization, many farmers, people in remote villages, even street vendors are using digital transactions

Before you implement all these pie in the sky electronic transaction ideas. Please ensure people get electricity. In Bangalore in weekdays there are half a day power cuts.

How should public do electronic transactions without electricity?.

Re: How to Lose $3B of Bitcoin in India

#65

Earlier quoted context omitted.

They are tightening them with RERA act etc. If you have noticed income tax and GST registration are sky high. So much that government had to reduce the GST. India is and will become cash free. Sooner or later.

Yup, RERA is a big boon for the consumer.

In theory, yes.

https://www.thehindu.com/news/national/karnataka/more-compla...

Re: How to Lose $3B of Bitcoin in India

#66

From the article, it seems like I didn't really understand the implications of Modi's actions to invalidate so much hard currency. Could someone familiar with the matter talk more about what the days/weeks following Modi's announcement looked like for the every day Indian?

It was an unmitigated disaster on several economic aspects.

Political it had superb optics.

All in all, it was a political spectacle paid for by the exchequer.

Here are the critical pieces of information needed -

1) The large majority of the Indian economy is "black" - i.e, the unorganized sector.

2) Cash is the main medium of trade, years after demonitization, we are back at similar levels of cash use, indicating no lasting impact on customer habits.

3) The reasons provided by the govt changed by the day, Initially it was sold as "stopping black money" or illegal accumulation of untaxed wealth.

This was updated to "removing counterfeit currency", later "increasing digital transactions".

4) The govt claimed that this was a well planned out strategic move, and not some ad hoc pie in the sky idea they were working on.

However, within a few days it showed clearly that the govt had not planned for the event - Amount of money demonitized >>> ability of the mint to print new notes, even with the several month lead it was supposed to have - if the mint was working non stop for that period.

The new notes did not work with many ATM trays, and this caused further problems- not to mention the scale of the logistical problem in getting the new notes to every corner of the country.

5) Loopholes: Within a few days, if not hours - people were using mules to launder money.

The govt said that you could deposit only X amount of money, after which you had to account for it and show where you got it from. The argument was that people holding untaxed or corrupt proceeds, would not be able to deposit them.

however - almost all the money demonitized was re-deposited into the banking system. This means that all the untaxed money, somehow was legally deposited in legit bank accounts.

PS) Indians HATE corruption, and the idea that someone got ahead of them by cheating. People happily accepted the sudden demonitization announcement because they believed that the rich and corrupt will suffer. This was why the PR was good.

-----

For each of the stated reasons given by the government, it is easy to show with actual numbers, that the exercise failed to achieve its goals.

Where a positive improvement can be shown, the gains are not commensurate to the losses incurred by the economy, and costs paid to undertake the exercise.

Digital transactions have not increased significantly, for example - and will not until the underlying telecom and trade infrastructure improves.

Most of the wealth was recovered, and very few people, if any have been caught as a result of this - especially since its common knowledge that most politicos sit on piles of cash.

----

However, it is very likely that the goal of the exercise was to harm other political parties who had cash based war chests.

Since the people most harmed by this are in the unorganized sector, the results will not show in any GDP projection.

The current dispensation is far more pro corporate than the previous govt, and so their chief patrons and metrics are not impacted, so it was at a relatively low political cost for the party.

In short, it was an audacious political stunt, and carried out with verve. Its also hard to criticize it because of the amount of ire you attract online for being negative about actions of the current dispensation.

SO please note, this is the take on Demonitization, and not on the BJP entire.

Re: How to Lose $3B of Bitcoin in India

#67

Earlier quoted context omitted.

How are you disadvantaged? A majority of the indian economy is in the unorganized sector - and India has large tools to ensure that we recover taxes via transaction taxes. All this does is demolish that sector - and thus harm the larger economy on which the organized sector depends. Wishes and horses - we may want the whole sector to be organized and transparent - but this isn't going to happen quickly. Its going to…

> How are you disadvantaged? Umm... what? Are you sure you're replying to the correct thread? > All this does is demolish that sector - and thus harm the larger economy on which the organized sector depends. Wrong, this converts a large part of the unorganized sector to organized. Contrary to your assertion, this has helped include the large unorganized sector in the growth story of the country. I believe this is why…

No it doesn't help - are you aware of why the unorganized sector is not in the organized sector?

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No disagreement, but this is not the path, and it really cant be sped up.

The same way its going to take X amount of time for someone to climb rank in an online game, its going to take time for compliance and ability to comply to catch up.

The same way you cant feed jet fuel to a fiat, you cant expect to push the economy beyond its adjustable rate.

Wishes arent horses.

Re: How to Lose $3B of Bitcoin in India

#68

Earlier quoted context omitted.

> Now, all of this bullshit is gone What? > I'll have to pay everything from my bank account, which will get tracked eventually to the seller I purchase my house from. Sorry dude. You are disconnected from reality. Workaround always exist. People still prefer to pay, as much as possible in cash, to save on that huge registration fees. This demonitization was just a smoke in people's eyes. Those big thugs are still sc…

> You are disconnected from reality. I can only talk from my experience. Me and my father searched for an apartment about 6 months before the demonetisation. And I'm searching one for me now. There is a clear difference.

What are the issues you are facing while buying an apartment?

Keep note that any builder where software engineers buy, the big builder types, do not take cash money. In fact the payment schedule and mechanism is all in cheque or RTGS transactions. So that is barely a problem with or without any government action. Even in the worst case you still have to submit your PAN, so the government can easily audit your case even in case of cash transactions.

If you are complaining about the bribe you have to pay during property registration. Make note you will be made to pay that even you do not do undervalue registration and pay the full amount. They charge you bribe even if all your papers are right.

That sort of corruption can already be dealt with. But no one really tries hard enough because you have to burn down the whole system to do that. Every table in the registration office takes a cut to pass a paper to the next table.

If your whole system is corrupt top down, you have little hope to fight these things apart from long term social reforms.

Re: How to Lose $3B of Bitcoin in India

#69
post #63

Earlier quoted context omitted.

> Workaround always exist Of course. Every system has workarounds. > People still prefer to pay, as much as possible in cash, to save on that huge registration fees. For large real-estate companies, like Aparna Constructions in Hyderabad, most of the transaction is with fully accounted money. About 10% of the transaction is with un-accounted for cash. Cash transactions are happening with smaller builders, but even th…

>>Cash transactions are happening with smaller builders, but even they are finding it difficult to find buyers with a lot of liquid cash. Its impossible to register a property in Karnataka, without a PAN card/number. So in short for high value transaction its already possible to have tax accountability. Same with jewelry. The question is that of enforcement. You don't need to demonetize anything for these things. >>P…

> Its impossible to register a property in Karnataka, without a PAN card/number. So in short for high value transaction its already possible to have tax accountability. Same with jewelry. The question is that of enforcement. You don't need to demonetize anything for these things.

How do you explain the actual change that has occured in the real estate market then?

> What is going to be a bigger surprise to you is discovering a few years down the lane that a full scale parallel unregulated economy is in motion.

Of course. Nobody says that this will kill all illegal activity for all time in this country of 1.25 billion people. But there was a big positive effect due to demonetisation. Even if it dents the black economy for 5 years, that's good enough. We'll take more such actions when needed.

> Middle class these days is like people who make a good 30-40K a month. These people see a lot of high value notes.

https://www.livemint.com/Opinion/TvcFydQcN6KEFkvdW7BprM/Indi...

From the article: vast majority of middle class in india earns less than $4 per day. A ₹2000 note is 10 days wages. Yeah, I don't think those guys will ever save that much while still surviving.

> The rich don't exactly keep their money beneath their mattress these days.

Yup, they were forced to move it from there in 2016. Some moved it to bitcoin, as described in TFA.

> Before you implement all these pie in the sky electronic transaction ideas. Please ensure people get electricity.

Bullshit. Electrification and economic reforms can happen simultaneously in the world's seventh largest economy. For example, 2018 was the first year when all villages satisfied the criteria for being electrified. Long way from 24x7 electricity, but hey, it's a start.

Re: How to Lose $3B of Bitcoin in India

#70

Earlier quoted context omitted.

How are you disadvantaged? A majority of the indian economy is in the unorganized sector - and India has large tools to ensure that we recover taxes via transaction taxes. All this does is demolish that sector - and thus harm the larger economy on which the organized sector depends. Wishes and horses - we may want the whole sector to be organized and transparent - but this isn't going to happen quickly. Its going to…

> How are you disadvantaged? Umm... what? Are you sure you're replying to the correct thread? > All this does is demolish that sector - and thus harm the larger economy on which the organized sector depends. Wrong, this converts a large part of the unorganized sector to organized. Contrary to your assertion, this has helped include the large unorganized sector in the growth story of the country. I believe this is why…

>>OK, doesn't mean we shouldn't try to help speed it up.

Who is 'we'? Why does this 'we' think they are entitled to decide for other the terms of economic participation?

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