Failed objectives: Six years after demonetisation, cash is still king, black money is very much around and counterfeit notes are on the rise

[ron_swanson]

 

 

[Sandy_14]

36 minutes ago, ron_swanson said:

 

 

All i know and what modi done great is ...Making Adani worlds 2nd richest and Ambani 5th richest...Which we never imagined...

All the money from reserve bank directly goes to above 2 people with commission to Amit Shah.

Without any extra ordinary innovation or idea....Adani stock going from 120 to 3800 is what we all can say how the money is given to those ppl in golden plat.

 

Now dont say Adani used his bussiness intelligence and greatest bussiness model to get those deals.

 Modi dont even have guts to ask Adani to pay back debts.

[kasi]

1 hour ago, Telugodura456 said:

10gera mentalodivi. Are you saying kirana stores which any african/chinese/thella/nalla can do can ONLY be done mostly by marwardis in india ? 

Please use 🧠 and try understand what I'm trying to sayt

Next time when reading stop sucking for a sec, so u understand things better

[argadorn]

I rate this is biggest disaster in modi govt and second is black money theskoni ravadam 

[argadorn]

On 11/7/2022 at 9:31 AM, Vaampire said:

Implementation could have been much better. Lot of people who were working as cashiers in banks complained about the weird smells while counting the cash during those days. 
banking fees, limits on withdrawals and so many other things destroyed the purpose. 
 

good objective with failed implementation 

simple ga chepthunavu india lo unna poor ni rich chedham anukunna but money ye levu na dagara laga .. demonetized cheisndhi black money and perfect ga chesi rabataniki emi rakuntay enka demonetized chesindhi endhuku implementation Ranodu endhuku cheyali

[Picheshwar]

Sigguleni bratukulu Bhakt gallavi. Thooo

 

[telugu_fan]

2 hours ago, argadorn said:

simple ga chepthunavu india lo unna poor ni rich chedham anukunna but money ye levu na dagara laga .. demonetized cheisndhi black money and perfect ga chesi rabataniki emi rakuntay enka demonetized chesindhi endhuku implementation Ranodu endhuku cheyali

 

When you start with a wrong premise you will get a wrong result in the end only. No where did the govt say that poor people will become rich with demonetization, infact the govt repeatedly said short term to medium term there will be pain and in the long run the economy will be in good stead. Black money won't look or feel any different than normal money or even a black marketeer wouldn't be any different from a common man, just that tax hasn't been paid. If people remember the price of gold bought with absolute cash went for a premium and the gold traders were made to pay the extra tax which again the charged from the cash kings only.

https://www.newindianexpress.com/nation/2017/nov/05/rs-4000-crore-fraud-by-shell-firms-found-since-demonetisation-says-pm-modi-as-224-lakh-companies-1692888.html

https://www.firstpost.com/business/demonetisation-two-bank-managers-arrested-for-laundering-money-in-first-incident-of-fraud-3140414.html

https://economictimes.indiatimes.com/news/economy/finance/deregistered-companies-shifted-rs-21000-crore-during-note-ban/articleshow/61939094.cms?from=mdr

Lot of cash was sent to defunct companies that had no regular business but after demonetization swelled in terms of money, also people who self declared tax had to update their filings after that for the amount of money deposited if it crossed a certain threshold. that created the updated tax filers and money that gets collected.

Lot of people say it was good step but implemented badly, but none of those economists or intellectuals will lay out in what way this could have been done better.

people with shorter memory are even worse. It is one of the reason why CBN had a black mark as well. When demonetization was done he said he gave the idea for implementation or the green signal and 2-3 years later turned up at India Today conclave saying Modi destroyed the economy with his demonentization plan.

[telugu_fan]

5 hours ago, Telugodura456 said:

rey  1% sucker. Understand the context i said first. Indian govt wanted to "formalize the economy" - formalize ante meaning endhi ? economy opens to all citizens equally.

I never said 90% will be rich. But the rich will be distributed as expected - not genetically controlled by a caste. Is it not weird that marwardi gets to open even a kirana store in hyderabad  and chennai? They also control the wealthiest retail stores.

Are you saying that they are doing it all legally ? how are they able to finance ?

If a country is serious about formalization - it will break this clannish control and this mafia grouping. Make economic oppurtunities open to everyone.

What you are saying is - keep peace with inequality, few will rule -hook or crook and you suck their d1ck. Then make peace with caste domination too. Inka disco emundhira mental.

In your hurry to answer i think you are confusing a few things, formalize means the govt has idea on how much you earn as a business not the usual black hole of somebody saying "loss ho gaya and having new buildings and cars in the background".

Economy or you meant in this case business is never opened to everyone equally. If i want to start a real estate & construction company when i have not worked in that field it will be very difficult for me to start and compete with a myraid set of companies that already exist in telugu states who have their own set of contacts and schemes to win contracts and investments.

You will have to work twice as hard to compete, similarly in you case of marwadis running kirana stores they tend to migrate and open up small stores and literally live on the margins. their financing is either their own or somebody that helps them with the ability to pay back with interest and they are quite cutthroat in that business.

Even if you go and raid the individual kirana store guys you will find nothing, even if the IT guys somehow found the big fish then that also will not mean you will find the money in all the cases all the time.

Demonetization helped put certain companies that were round tripping money on a bigger scale with only directors in the companies. look for one of the link in the previous post.

Having people put money in the bank allowed IT guys to target the bigger fish so to speak and ask for IT returns from previous years.

I understand what you are trying to show with marwadis and black money, but trying to demonize them when that is what pretty much every business does when it comes to saving money and giving bribes to stop harrasment and then skimping on paying tax citing these very issues is counterproductive.

[argadorn]

5 hours ago, telugu_fan said:

 

When you start with a wrong premise you will get a wrong result in the end only. No where did the govt say that poor people will become rich with demonetization, infact the govt repeatedly said short term to medium term there will be pain and in the long run the economy will be in good stead. Black money won't look or feel any different than normal money or even a black marketeer wouldn't be any different from a common man, just that tax hasn't been paid. If people remember the price of gold bought with absolute cash went for a premium and the gold traders were made to pay the extra tax which again the charged from the cash kings only.

https://www.newindianexpress.com/nation/2017/nov/05/rs-4000-crore-fraud-by-shell-firms-found-since-demonetisation-says-pm-modi-as-224-lakh-companies-1692888.html

https://www.firstpost.com/business/demonetisation-two-bank-managers-arrested-for-laundering-money-in-first-incident-of-fraud-3140414.html

https://economictimes.indiatimes.com/news/economy/finance/deregistered-companies-shifted-rs-21000-crore-during-note-ban/articleshow/61939094.cms?from=mdr

Lot of cash was sent to defunct companies that had no regular business but after demonetization swelled in terms of money, also people who self declared tax had to update their filings after that for the amount of money deposited if it crossed a certain threshold. that created the updated tax filers and money that gets collected.

Lot of people say it was good step but implemented badly, but none of those economists or intellectuals will lay out in what way this could have been done better.

people with shorter memory are even worse. It is one of the reason why CBN had a black mark as well. When demonetization was done he said he gave the idea for implementation or the green signal and 2-3 years later turned up at India Today conclave saying Modi destroyed the economy with his demonentization plan.

I gave  example about the poor people to rich that’s ok you didn’t get that … demonetized chesindhi black money unna vallu vadilestharu so that we can save lot of money … which is utter flop even today … 2000rs kanapaduthunsya avi eppudo big shots and black money holders dagara badramga unayi.. if you can’t implement properly then why did you implement it and say it as big achievement …digital pay ki demonetizing reason antaru kondaru adhi lekunda cheyaradha … veedu cheshadu bankers chesaru antunadu why don’t he send Ed cbi to attack them only opposition politicians use ah adhi

[Telugodura456]

9 hours ago, kasi said:

Please use 🧠 and try understand what I'm trying to sayt

Next time when reading stop sucking for a sec, so u understand things better

yedisaavule. comparing microsft and apple to clannish control on kirana stores. Microsfot/apple atleast developed a technilogy whicch never existed. kirana stores is a mafia.

[Telugodura456]

5 hours ago, telugu_fan said:

 

Economy or you meant in this case business is never opened to everyone equally. If i want to start a real estate & construction company when i have not worked in that field it will be very difficult for me to start and compete with a myraid set of companies that already exist in telugu states who have their own set of contacts and schemes to win contracts and investments.

You will have to work twice as hard to compete, similarly in you case of marwadis running kirana stores they tend to migrate and open up small stores and literally live on the margins. their financing is either their own or somebody that helps them with the ability to pay back with interest and they are quite cutthroat in that business.

 

Demonetisation attacked the poor labrores with 500 rupees as roju kooli more than any "black money".

I never said everyone should be a reslestate owner or everyone must run retail stores. use a little brain.

But should retail stores controlled through genes ? only marwari and his sons and his children have control it ?cant you see it is more like a mafia ?

work "hard" anta.

[neekunuvvetopu]

On 11/7/2022 at 10:22 AM, Kool_SRG said:

The Modi government expected demonetisation to extinguish at least Rs 3-4 lakh crore of black money. However, RBI data show that 99% of the money that was invalidated came back into the banking system. Meanwhile, fresh seizures of black money continue.

On November 8, 2016, Prime Minister Narendra Modi appeared on national television and said that all Rs 500 and Rs 1,000 banknotes would become invalid at the stroke of midnight. The announcement at 8 pm, aimed at flushing out black money—funds hidden from the taxman—led to nearly 86 percent of the currency in circulation becoming invalid four hours later.

Modi’s decision surprised some economists, who argued that only about 5 percent of back money is stashed in the form of currency. The remainder is in the form of other assets such as real estate and gold, they argued.

 

There were three economic objectives that were offered as the rationale behind demonetisation—wiping out black money, eradicating fake currency notes and creating a cashless economy by pushing digital transactions. Among those targets, the biggest one was tackling black money. Black money refers to cash that is not accounted for in the banking system or cash on which tax has not been paid to the state.

Six years after the demonetisation move, has India achieved any of the stated targets? Let us take a look with available data.

Black money hunt—a failure

Did demonetisation achieve the target of ending the killing black money economy? According to Reserve Bank of India (RBI) data, almost the entire chunk of money (more than 99 percent) that was invalidated came back into the banking system. Of the notes worth Rs 15.41 lakh crore that were invalidated, notes worth Rs 15.31 lakh crore returned.

How much black money has been recovered since the note-ban exercise? This is difficult to assess as there are no recent estimates of how much black money was recovered since demonetisation.

But in February 2019, then finance minister Piyush Goyal had told Parliament that Rs 1.3 lakh crore in black money had been recovered through various anti-black money measures, including demonetisation.

In his book I do what I do, former RBI governor Raghuram Rajan disclosed that he never supported the idea of a note ban and felt that the short-term impact of the exercise could outweigh the long-term gains.

 

Remember, the government had originally expected that at least Rs 3-4 lakh crore in black money would get extinguished outside the banking system due to demonetisation alone. Thus, data suggests that demonetisation was a failure in unearthing black money in the system. Meanwhile, instances of black money seizures continue.

In August this year, the Income-tax department said it detected black income of more than Rs 150 crore after it raided several business groups who run hospitals in Haryana and Delhi-NCR. Similarly, the department detected undisclosed income of more than Rs 250 crore during searches against two business groups involved in silk sarees trade and chit fund in Tamil Nadu. There are several such instances across the country.

Counterfeit notes on the rise

A second objective of the exercise, that of tackling forged banknotes, also seems to have come a cropper. Counterfeit Indian currency notes increased 10.7 percent in the financial year ended March, the Reserve Bank of India (RBI) said in its annual report released on May 27 . The central bank detected a 101.93 percent rise in fake notes of Rs 500 denomination, while fake notes of Rs 2,000 increased more than 54 percent.

The RBI report showed that there was an increase of 16.45 and 16.48 percent in counterfeit notes of Rs 10 and Rs 20, respectively in FY22. Fake Rs 200 notes rose 11.7 percent. Counterfeit notes detected in denominations of Rs 50 and Rs 100 declined 28.65 and 16.71 percent, respectively, the report showed. Of those, 6.9 percent were detected at the RBI with the rest 93.1 percent at other banks.

In 2016, the year when demonetisation was launched, 6.32 lakh counterfeit pieces were seized across the country. In the next four years, a total of 18.87 lakh fake notes were seized across the country in various denominations, according to RBI data.

Most fake currency notes seized in the post-demonetisation years were in the Rs 100 denomination—1.7 lakh pieces in 2019-20, 2.2 lakh in 2018-19 and 2.4 lakh pieces in 2017-18. Compared to previous years, there was an increase of 144.6 percent in fake Rs 10 notes, 28.7 percent in Rs 50 notes, 151.2 percent in Rs 200 notes and 37.5 percent in fake notes of Rs 500 [Mahatma Gandhi New Series] denomination, the RBI data showed.

Cash is king

Later, the creation of a cashless economy was pitched as another major target of demonetisation. How has this picked up? Cash has proved that it remains king in the post-note-ban years. As per RBI data, currency with the public increased to Rs30.88 lakh crore as on October 21, 2022, from Rs17.7 lakh crore on November 4, 2016.

At Rs 30.88 lakh crore, currency with the public is 71.84 percent higher than the level for the fortnight ended November 4, 2016.

Digital payments jump, though..

To be sure, digital payments have risen. According to RBI data, transactions through the Unified Payments Interface (UPI) touched a new high of Rs 12.11 lakh crore in October , six months after it crossed the Rs 10-lakh-crore milestone in May. In terms of volumes, UPI has hit a record of 730 crore transactions in October. In September, UPI transactions hit 678 crore in volume terms breaking the Rs 11-lakh-crore mark.

In the financial year 2022, around 71 billion digital payments were recorded across India. This was a significant increase compared to the previous three years. UPI recorded strong gains, both in numbers and in value, since 2015.

So, what is the takeaway here?

The biggest stated goals of demonetisation—eliminating black money, curbing fake currency and creating a cashless economy—are yet to be achieved. People still prefer to deal in cash to a large extent, even though there is an increase in digital transactions, the last largely driven by convenience and the surge in online transactions that was in turn driven by the COVID-19 pandemic and ensuing lockdowns. This perhaps indicates that digital channels would have picked up even without the highly disruptive economic move.

Debates still rage about whether the note ban was a prudent step in the Indian economic context. While there certainly has been a discernible uptick in digital payments, it is doubtful whether the elaborate exercise to unearth black money—the stated and primary goal of demonetisation—was worth it.

Bank Managers made lot of money during this transaction.. avidea manchide.. but, manollu bokkalu kanukkoni Modi ki chukkalu dikhaayaa.. I heard some of them got 40-50%.

[Kool_SRG]

37 minutes ago, neekunuvvetopu said:

Bank Managers made lot of money during this transaction.. avidea manchide.. but, manollu bokkalu kanukkoni Modi ki chukkalu dikhaayaa.. I heard some of them got 40-50%.

Jhan dhan kaathaalu use chesi kuda oka range dhanukunaaru le..

Bank employees suffered at lot during that period but ila dabbulu side chesukunaaru.

[kasi]

4 hours ago, Telugodura456 said:

yedisaavule. comparing microsft and apple to clannish control on kirana stores. Microsfot/apple atleast developed a technilogy whicch never existed. kirana stores is a mafia.

Good luck Bigg boss

[telugu_fan]

6 hours ago, argadorn said:

I gave  example about the poor people to rich that’s ok you didn’t get that … demonetized chesindhi black money unna vallu vadilestharu so that we can save lot of money … which is utter flop even today … 2000rs kanapaduthunsya avi eppudo big shots and black money holders dagara badramga unayi.. if you can’t implement properly then why did you implement it and say it as big achievement …digital pay ki demonetizing reason antaru kondaru adhi lekunda cheyaradha … veedu cheshadu bankers chesaru antunadu why don’t he send Ed cbi to attack them only opposition politicians use ah adhi

Black money is just money that has been saved without tax, adi emi different ga vundadu, adi chusina ventane adi black money ani telvadaniki. Alanti appudu desam lo enta mandi deggara raid vestavu, aa black money pattukovataniki. black money pattukovatiniki oka reason economy ni formalize cheyyadam. evaru enta sampadistunaro teliyanappudu emi cheyyali, enta mandi tax payers vunnaru appatlo, ippudu enta mandi vunnaru.

https://www.moneycontrol.com/news/business/economy/demonetisation-three-years-on-more-taxpayers-and-greater-digital-payment-usage-but-some-pain-points-remain-4620141.html

link lo enta mandi tax payers vunnaru appatlo ippudu enta mando chebutundi, enni shell companies use chessaro kuda track chesaru, vallani jail lo veyyadam kanna, govt is trying to formalize the economy. it is more concerned about tracking money flow and tax is paid correctly than throwing people we don't like in jail.

After demonetization, it also helps with GST where input credits pay a role, if cash is there in the hands of companies then the same informal economy would continue.

All the people complaining that it wasn't done well should also point out what should have been done to tackle black money and informal economy that would be more helpful rather than one sided news reports. That is more useful tracker than personal feeling about success or failure. there was report of how gold purchases increased along with shell companies being tracked.

All of this has people paying the govt tax through gold purchases and the black money holders had to take 20-30% haircut for the above said purchases.

No reform works on the very first day of its introduction, they will have to be modified as new situation arises and conditions change over time. the reforms brought in by PVNR govt kept evolving and changing in the years ahead. Nobody says they have failed as so many changes have come in. Reforms need to be made to work and they will be painful for the all the people involved. in this case cash was the king and so it affected everyone.

Originally when i started writing it was to highlight that a news item written after so many years should have done all around analysis. instead it focused on the negative aspects of demo only while leaving the other things that were also done.