India scraps its two largest rupee notes in shocking anti-corruption move

[Mugundan]

"Mystery of the old notes" solved! RBI gives out figures of demonetized notes back with banks. 99 per cent back; some TV channels put it at 99.8; some papers at 99.9 per cent. Whatever it could be, Govt insists demon was a success. FM said today it was an attempt towards a "cashless society" (less cash if you want or digitization). Primary aim of black money eradication, terror funding, fake currency etc forgotten.
Banks are apparently flush with funds but reports also said people were not borrowing and were not ready to invest. Today I heard banks had to give out more interest for the extra money that came in and thus could only give reduced dividends to Govt. Economic experts here would be able to analyze these things better, whether it was a success, it might yet turn out to be success or it was a failure as most commentators have argued today.
One thing it showed: People could stand in queues, die, lose money and yet believe that PM would deliver something good eventually. People are waiting for the economic boom that might either give them bonuses into bank accounts or else provide them with more earnings.
In the meantime, those who have lost money (unable to deposit the old currency in time for some reason or the other) and those who have suffered because of interest rate cuts continue to suffer.
http://indianexpress.com/article/busine ... rvae-bank/

[prasen9]

It seems that 99% of the notes came back. I don't seem to see very many benefits of this stunt. Most economists did not believe it was sound policy. Yet, the people seem to have supported it: Why popular support?

At some point, when the dust settles, some communication school or PR firm should study how Modi manages to keep selling vaporware and gets by. This is the phenomenal success of this prime minister. If any young guy has ambitions to being the PM, they should study the PR techniques very closely. I hope they do not copy the rathyatra/Godhra techniques, but, I know I am hoping against hope. What works will be emulated.

[Mugundan]

Now, GDP is down to 5.7 in the first quarter of 2017. Yet, Govt and its supporters (largely led by ministers on social media) have projected DeMon as a great success after news came in about 99 per cent of demonetized currency having come back into the banks!
The new "mantra" is "cashless economy" coupled with "informal" merging with the "formal" economy. The narrative keeps changing even as prices are soaring.
http://www.hindustantimes.com/business- ... B5QTL.html

[jaydeep]

Another article on the same line on Bloomberg.

Modi's Biggest Move Is a Total Bust

[prasen9]

Steve Forbes, the editor-in-chief of the communist rag, Forbes, whose motto is "The Capitalist Tool" (which I think is American for Das Kapital), wrote this in December. Demonetisation:sickening and immoral

[Sin Hombre]

If the likes of Forbes and the Economist (leftist anti-India rags) are against it, it likely was the correct thing to do.

At least tax revenues and collections have gone up

* As a result of demonetization drive, there is a substantial increase in the number of Income Tax Returns (ITRs) filed.
* The number of Returns filed as on August 5, 2017 registered an increase of 24.7% compared to a growth rate of 9.9% in the previous year.
* Advance tax collections of Personal Income Tax (i.e. other than Corporate Tax) as on August 5, 2017 showed a growth of about 41.79% over the corresponding period in previous financial year.
* Personal Income Tax under Self Assessment Tax (SAT) grew at 34.25% over the corresponding period in F.Y. 2016-2017.

[Mugundan]

At least tax revenues and collections have gone up

* As a result of demonetization drive, there is a substantial increase in the number of Income Tax Returns (ITRs) filed.
* The number of Returns filed as on August 5, 2017 registered an increase of 24.7% compared to a growth rate of 9.9% in the previous year.
* Advance tax collections of Personal Income Tax (i.e. other than Corporate Tax) as on August 5, 2017 showed a growth of about 41.79% over the corresponding period in previous financial year.
* Personal Income Tax under Self Assessment Tax (SAT) grew at 34.25% over the corresponding period in F.Y. 2016-2017.

Tax revenues keep going up every year. It looks as though it has no connection with demonetization or even the party in power or the FM in position. More people breach the no-tax bracket every year and the numbers go up. Salaries are going up every year and people pay more tax. This year, thanks to DeMon and the various amnesties granted obviously the numbers were bound to go up. But are they the highest yet in terms of growth?
The following piece gives an idea:
https://thewire.in/169288/modi-clarific ... etisation/
They are now talking of "digitization", "cashless economy" or "less cash economy", merging of "formal and informal" economy, and of course banks flush with funds.
People will be fooled for some more time, may be a few years more, before they wake up to the reality that this was an opportunity given to black money hoarders to convert that into "white". In the process, many an honest tax payer might have been put to inconvenience and 100-odd people have died too.

[jayakris]

If the likes of Forbes and the Economist (leftist anti-India rags) are against it, it likely was the correct thing to do.

Boom! There you go

I am of the opinion that Modi didn't get the touted numbers like all kinds of money coming in unaccounted, to RBI. It surprised (shocked) me too, that it was as low as it turned out to be. So, yes, what it did was to instead allow people to convert black to white. That too, more easily than we thought. But unlike others who take some sort of moral view on the cheats out there and are disgusted that all that happened was that they converted their black to white, I have no issue with that. I wanted as much black converted to white, whether the cheats were brought to justice or not. I don't care on punishing them, but would rather look ahead. It is our system that allowed them to cheat. Now let them device their next plan to cheat, but a lot of black money became white and accounted for - and I am very happy with that. After all, I had said right from the beginning that some wealth redistribution would happen as commissions for taking others' money and helping make it white. There are indications that it did happen, but I have not seen any serious study or report on the extent of it - and it is still too early to see the benefit from that. I am not a communist or anything, but if unused money goes into the hands of a large population, it has the effect of a subsidy right to them, and that is serious. As a minimum, tax revenues will go up, and it really has, pretty much as expected. Are these all bad things, for us to complain - whatever Modi said was his reasons for doing it?

This continued criticism on demonetization is showing nothing but a penchant to attack and score points over Modi, whom many don't like, by pointing out that he was off in his calculations. Maybe he was, but who cares, if what ensues is good for us in the long term? And I don't think Mugu is right above, that the increase in tax payers is only the natural growth as incomes rise. What I read was that it was quite clearly much higher than would normally happen year to year.

The long-term effects of all of this are quite positive. In fact I have not seen any economist saying that there is any long time downside to any of what has happened. They all say that it can only help, if the temporary drag in economy isn't too bad. In fact, the only disagreement is in the magnitude of those benefits. The negative was the lost productivity for a quarter (which does not seem to have been as bad as people predicted, and we seem well past it already). But to me it seems the benefits in the long term will outweigh the inconvenience and pain inflicted on the people.

But deaths happened due to this.Some 150+ reported, but realistically about 20 to 40 that are directly caused by to taxis/autos not accepting old bills to take people to hospitals, a few suicides, etc. That was indeed a high cost to pay. Like when we lose soldiers by the thousands in protecting the country, I hope their deaths won't be in vain, for the country's greater prosperity in the future. We will still have to wait to know though.

Other than deaths, I discount almost all of the rest of the inconveniences as minor, because it were anything serious (like rape accused swamis being sent to jail ) people would riot out on the street. At least the students would. And nobody did. Instead they voted Modi's party in the largest state election in the world. So, I think this "people's pain" argument just does not wash.

This was a good thing, and it will still prove to be so. Not the way that Modi talked about it, and not the way that many people thought it would help. We need to still keep tightening tax enforcement though. This gave us a bit more of ability to do that. More moves towards a cashless economy will only help too.

[Atithee]

Jay, more power to you. You saved me the trouble of writing what was on my mind. Consider yourself fortunate that you are Swami Jayananda and not Baba Jayananda though. All babas are in trouble. But, your moniker has no Ram in it, so you may be safe.

Haters will continue to hate.

[Atithee]

As if on cue, I found this piece. There you have it "haters."

http://www.moneycontrol.com/news/busine ... picks=true

Here's the intro to this article:

Why it is too early to dismiss demonetisation as a failure

If there is anything that demonetisation has achieved, it has helped convert some black money into white. The onus is on the government and its agencies to prove the colour of the money deposited.

Shishir Asthana

[Prashant]

If the likes of Forbes and the Economist (leftist anti-India rags) are against it, it likely was the correct thing to do.

Um, did you just call the Economist leftist? Do you actually read the Economist? It is pretty overtly libertarian, i.e. very far right. And also very intelligent. I don't read Forbes, but if it is leftist, then you have both ends of the spectrum thinking that demonitization is crap. Which is good reason to believe it is crap.

[prasen9]

And, Forbes is supposedly leftist now lol. Possibly left of Atilla, the Hun for sure. Forbes is a business magazine with a right-center bias. Fact-check on Forbes

[prasen9]

Haters will continue to hate.

And, the bhakts will continue to show their bhakti.

I think people's political biases do not change through dialogue.

[prasen9]

people would riot out on the street. At least the students would. And nobody did. Instead they voted Modi's party in the largest state election in the world. So, I think this "people's pain" argument just does not wash.

By this logic, the Congress was voted into power for the greater part of 60-70 years. So, they must have done great! [Not, imho.] Elections are not always a true measure of progress, especially right away.

[Atithee]

And, the bhakts will continue to show their bhakti.

I think people's political biases do not change through dialogue.

I hope this forum is better than that! Regardless, not even knowing if I'm considered a Bhakt, my position is focused on the action and results, not whodunnit. I would have felt the same no matter which government executed it. And I was there in the peak days. So, I speak with some experience as far as the pain of the common person is concerned.