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India demonetisation fails to purge black money

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Re: India demonetisation fails to purge black money

#61

Post by statguy »

harigov wrote: post #59
statguy wrote: post #57

Earlier quoted context omitted.

Did you even read the articles? There are 5 people mentioned, two of whom are former RBI governors and apolitical. While Manmohan Singh and Chidambaram are from the opposition, they are noted economists - MMS had predicted back in Nov. 2016 that GDP growth would drop by two percentage points and he was bang on target. The third article was about a letter written by RBI employees about the RBI loosing credibility and…

BTW, the letter from RBI employees was about mismanagement rather than demonetization perse - http://timesofindia.indiatimes.com/business/india-business/f... That article that you linked seems to be intentionally ambiguous.

It was about mismanagement stemming from the demonetization, loss of autonomy of the RBI.

Re: India demonetisation fails to purge black money

#62

Post by thomastjeffery »

thisisit wrote: post #17

For people who can't access the link: https://archive.fo/ynouY I am confused with the article though. What would have been a successful result? That the all canceled currencies wouldn't have been exchanged or deposited? I am reading this link: http://www.financialexpress.com/economy/all-rs-500-rs-1000-b... The wording is confusing at best: " nearly 99% of the high-denomination currency notes of Rs 1,000 and Rs 500 th…

Basically the Indian government hoped that any "hoarded" undeclared (not taxed) notes would suddenly become worthless, and therefore not be deposited. Instead, almost all notes in circulation were deposited, meaning any undeclared currency managed to be declared in time.

Re: India demonetisation fails to purge black money

#64

Post by rm2889 »

i2shar wrote: post #39
rm2889 wrote: post #12

Earlier quoted context omitted.

I'm not sure. Historically, Indian governments have been most undeserving of our taxes simply because they've misspent it and/or misdirected it to achieve their own means (corruption, buying votes etc). Saying "yes but this government is different" also doesn't hold water when you look at the massive farm loan waivers that were just granted, and more waivers are on their way. How do you think the waivers were funded?…

> I'm not sure. Historically, Indian governments have been most undeserving of our taxes simply because they've misspent it and/or misdirected it to achieve their own means (corruption, buying votes etc). Depending on who you ask, Governments will always be undeserving of your tax money. Also, I'd rather prefer my tax money be spent on farm loan waivers than be stashed away hidden from the Government under a carpet o…

> Also, I'd rather prefer my tax money be spent on farm loan waivers than be stashed away hidden from the Government under a carpet or in a foreign bank, if that's the comparison you want.

Those aren't the only two alternatives. How about you lower the tax rate and create incentives so that the farmers actually pay back the loans. Right now, farmers take loans with the assumption that they'll be waived, and the cycle continues. I'm not shooting on the farmers here, I'm just saying that farmers, like bureaucrats, like businessmen, are human. If they're incentivized to game a system, they will. For once it'd be great if my tax money could be better spent on other things that would actually benefit the country (strong defense, capable law and order through an effective police and judiciary, etc.) rather than indirectly buying votes for the current political party in power (farm loan waivers etc.). Hell given the binary option of farm loan waivers vs stashing my cash abroad, most businesses will still stash it in real estate, abroad, etc.

> Are you suggesting that you should keep significant amounts of your money hidden from the Government because you think they might unduly target you because of your wealth and views?

No. Even after tax legitimate money is at risk if its just a number stored in a "secure" database somewhere. Whoever has ultimate control over that database has power over you. With cash, gold, you can carry them with you and anonymously pay for goods/services without compromising on your privacy. I was merely pointing out one limitation with a completely central digital payment platform.

> I don't see the connection between a hiring freeze in bureaucracy and demonetization

Ok who is on the receiving end of bribes? The bureaucrats/politicians. Demonetization was supposed to hit the tax evaders (usually bribe givers) and the bureaucrats (bribe takers). Maybe they both were seemingly hurt with demonetization as they both had cash stashed. But since the bureaucracy still exists (and has become more powerful eg - http://www.thehindu.com/news/national/the-taxman-now-has-mor...), there is no incentive for the bribe takers to stop taking bribes. Tell me this new bill won't be abused and misused. Looking at the history of laws being abused in India, I'd bet that it will be

Re: India demonetisation fails to purge black money

#65

Post by kinkrtyavimoodh »

vikiomega9 wrote: post #51
kinkrtyavimoodh wrote: post #43

Earlier quoted context omitted.

Unfortunately PM Modi and his government have been constantly shifting the goalposts. In the beginning they did promise demonetization as a way to render all black money null.

Isn't auditing for tax purposes a means of annulling black money?

It is, but the initial claim was that this would basically convert the millions of rupees of black money that's hidden away into worthless paper. That was the promise on which millions of poor Indians were asked to stand in long lines—that even if it inconveniences them, it would inconvenience the rich and corrupt even more.

Clearly that did not happen.

Re: India demonetisation fails to purge black money

#66

Post by rajathagasthya »

statguy wrote: post #57
rajathagasthya wrote: post #55

Earlier quoted context omitted.

3 out of the 4 persons mentioned here (Singh, Chidambaram and Dikshit) are opposition party leaders, so I wouldn't take their statements at face value.

Did you even read the articles? There are 5 people mentioned, two of whom are former RBI governors and apolitical. While Manmohan Singh and Chidambaram are from the opposition, they are noted economists - MMS had predicted back in Nov. 2016 that GDP growth would drop by two percentage points and he was bang on target. The third article was about a letter written by RBI employees about the RBI loosing credibility and…

I did read the article, thanks for asking. Doesn't change the fact that those 3 persons I mentioned are opposition leaders. And hence I don't take their (Singh, Chidambaram and Dikshit) words at face value. I'm not even questioning Singh's credentials as an economist.

Edit: I didn't realize that you mentioned 5 people in your comment. I stand corrected on that account.

Re: India demonetisation fails to purge black money

#67

Post by splintercell »

Retric wrote: post #26
rm2889 wrote: post #12

Earlier quoted context omitted.

I'm not sure. Historically, Indian governments have been most undeserving of our taxes simply because they've misspent it and/or misdirected it to achieve their own means (corruption, buying votes etc). Saying "yes but this government is different" also doesn't hold water when you look at the massive farm loan waivers that were just granted, and more waivers are on their way. How do you think the waivers were funded?…

Governments have so much leverage they don't need to be efficient to be a huge net benefit. Consider the cost to build and maintain a road network vs. the benefits it brings. PS: Further, it's not a question of collecting more money from everyone it's a question of collecting the same money from everyone which is a benefit even if you end up burning the extra money.

> Governments have so much leverage they don't need to be efficient to be a huge net benefit.

But aren't you just saying that when you have $1 Billion then paying $500k more to a contractor doesn't seem that bad based on the net benefit it would bring to have a dream home.

But imagine if this was a charity (something which govt is, if we look at it a certain way), that inefficiency means more people could have benefited out of it.

Re: India demonetisation fails to purge black money

#68

Post by virtuabhi »

statguy wrote: post #60
harigov wrote: post #56

Earlier quoted context omitted.

I wouldn't take the statements about credibility at their face value. AFAIK it didn't seem like RBI's credibility got affected. Also, as other poster cited, most of those seem to be the opposition and they are just "concerns" rather than "facts". With respect to poor losing jobs, that seems like a play around statistics more so than actual facts. 1.5 million out of 406.5 million lost jobs, which equals to 0.36%. Empl…

You may debate about job losses, but all of the aggregate effects have been captured by the GDP growth rate which has dipped to 5.7% compared to 7.9% the same quarter last year.

This is mostly due to GST impl. in July. Manufacturing had stopped and warehouses were no longer being filled from March onwards in anticipation of GST.

Re: India demonetisation fails to purge black money

#69

Post by [deleted] »

gauravhp wrote: post #27

All Positive comments here are made by those who don't live in india and are influenced by massive propaganda machinery that ruling parting of india is running. As someone who actually lives in india, I am vouch that Demonetisation was a disaster of all sorts. Ruling party kept justifying this failure by shifting the goal posts again and again. Here is a piece which describes in detail, this monumental failure of ind…

[deleted]

Re: India demonetisation fails to purge black money

#70

Post by virtuabhi »

tryingagainbro wrote: post #58
harigov wrote: post #45

Earlier quoted context omitted.

If they start using banks and digital payments, one can build credit score and issue loans to them, so they can develop their business. That is not possible today.

Loans for what? Some people in many fields should NOT get a loan. It will make matter worse...broke and indebted to a bank. Not everyone is gonna make a $1 million a year.

Women from rural areas can start a small business with a loan of 1-5 lakhs INR (~10k $). You should read more. Here is one recommendation http://a.co/fAC8YSQ
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