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A comment on In Its Third Month, India’s Cash Shortage Begins to Bite.

Re:In Its Third Month, India’s Cash Shortage Begins to Bite by suprgeek on Wednesday January 25, 2017 @03:58PM (#13486023)
The BJP govt. has cannily crafted a message where anyone who opposes this move is branded a traitor and conversely anyone who supports it must be a patriot - this is largely responsible for the "positive" feelings many people have around this move. That and the fact that the internet savvy already used Credit cards so they were largely shielded from this. The Demonetization on the whole was a failure:

1) The strongest reason for pushing it was as an attack on "Black Money" (undeclared wealth outside the taxation net). More than 90 -95% of the demonetized currency is back in the coffers. This magical "back money" is nowhere to be found.

2) The growth rate fell by at least 1% - whatever the other impact this by itself means a massive loss.

3) A large number of "cash only" small-scale businesses have been badly hit - these people are not internet savvy and do not have a voice but they do exist

4) The so called "leap" to a digital economy is mostly a temporary phenomena - just wait till the new currency is available in sufficient quantities

So on balance - all the pain and suffering of the people will NOT bear the reward most of them think it would.

Edit: Source for #1 http://timesofindia.indiatimes.com/india/90-of-scrapped-note... Note that the actual number will be higher as newer estimates are released.

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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by brutus1213 on Wednesday January 25, 2017 @04:25PM (#13486298)
I don't understand what happened wrt #1. Was the black money like the mythical WMDs and unicorns? Or did it just make its way into the new money supply?
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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by euphoria83 on Wednesday January 25, 2017 @05:17PM (#13486769)
It got converted into white money by getting deposited into banks through other (mostly poor) people's accounts. Hence, a sum of 5 million rupees was distributed among 20 people (mostly domestic helps, gardeners, chauffeurs, etc). Each account's deposit is small enough to not raise suspicion. These amounts will slowly be withdrawn.

In addition, bank managers also acted in complicity with rich black money holders by documenting that their currency bills were actually exchanged by multiple ordinary folk, whose IDs' copies (necessary proof for exchanging) exist in large numbers at any bank.

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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by brutus1213 on Wednesday January 25, 2017 @06:11PM (#13487160)
Any media reports on this? Really sad that a great human toll was paid for naught.
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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by denzil_correa on Wednesday January 25, 2017 @06:18PM (#13487206)
80% of the demonetized currency was back into the banks, 20 days before the final date [0]. Bloomberg reports that the final number could be as high as 97% [1].

Now, the question you should ask is - How much of black money was in cash? The answer is approx. 6% according to Min. of Finance White paper on Black Money. So, effectively - 86% of the currency was demonetized to target 6% of unaccounted income. No matter how you slice/dice this policy, the costs significantly outweigh the benefits.

[0] http://timesofindia.indiatimes.com/business/india-business/8...

[1] https://www.bloomberg.com/news/articles/2017-01-04/india-sai...

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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by denzil_correa on Wednesday January 25, 2017 @05:49PM (#13487024)
Multiple reports and research have said that black money in cash is approx. 6%. So, you can't get more than 6% back anyways and the government decided to demonetize 86% of the currency in the market.
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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by mdani on Wednesday January 25, 2017 @10:43PM (#13488517)
About 75,000 CR (roughly $10 billion) did not come back in circulation. I don't think this is a small amount (more so by Indian standards) so while the estimates for #1 were way off, there was something uncovered. Nobody knew in advance how much black money existed so it was a wild guess before this exercise anyway. So I don't think your #1 criticism is valid.

Source: http://indianexpress.com/article/business/economy/demonetisa...

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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by denzil_correa on Thursday January 26, 2017 @02:56AM (#13489552)
The question is about Return of Investment. Sure, amount X did "come back" but what amount Y did you spend to make that money come back? Was it worth it? Based on various analyses by experts, it does not seem worth it at all.
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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by photonwins on Wednesday January 25, 2017 @04:48PM (#13486541)
wrt #1 where are you getting those numbers from? Can you cite the source?
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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by denzil_correa on Wednesday January 25, 2017 @05:54PM (#13487055)
The Reserve Bank of India is unusually silent but reports based on sources say that 97% of the demonetized currency is back into the system.

http://www.livemint.com/Industry/RlRLIaViu44DYPKASuX76K/Bank...

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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by photonwins on Wednesday January 25, 2017 @06:01PM (#13487102)
I see, livemint's reputation for reporting facts is as dubious as nytimes. I say this because, livemint is owned by HT Media whose chairperson was a congress Rajyasabha (Upperhouse) MP.

https://en.wikipedia.org/wiki/Mint_(newspaper) https://en.wikipedia.org/wiki/Shobhana_Bhartia

I would rather have some trust in the official RBI's figures, because they are accountable unlike some website.

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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by denzil_correa on Wednesday January 25, 2017 @06:10PM (#13487157)
> I see, livemint's reputation for reporting facts is as dubious as nytimes. I say this because, livemint is owned by HT Media whose chairperson was a congress Rajyasabha (Upperhouse) MP.

I doubt you read the link I posted. The report was from Bloomberg not Livemint. Would you now discard that too based on another tenuous link?

https://www.bloomberg.com/news/articles/2017-01-04/india-sai...

> I would rather have some trust in the official RBI's figures

RBI has been unusually silent on this. As of December 10 (21 days before the final date), 80% of the demonetized currency was back into the banks [0]. So, even if you trust the RBI figures - don't keep your hopes high.

[0] http://timesofindia.indiatimes.com/business/india-business/8...

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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by photonwins on Wednesday January 25, 2017 @06:23PM (#13487234)
You are right, I didn't read the link you posted because the moment I noticed livemint, I kind of jumped to respond (possibly due to my past experience with the articles on their website). However my point still holds, if RBI is not releasing the data how are these Bloomberg or any other entity getting their numbers? I went through RBI's press release for December 2016 and didn't find anything stating the $220 billion deposits (as claimed by bloomberg).

https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx

PS: I am not trying to argue for the sake of arguing, I really would like to know the numbers to apprise myself.

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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by denzil_correa on Wednesday January 25, 2017 @06:33PM (#13487293)
> if RBI is not releasing the data how are these Bloomberg or any other entity getting their numbers?

The Bloomberg report is based on sources. For a moment, lets discard the Bloomberg reports and look at actual numbers from RBI. The data from RBI on December 13 shows that 80% of the demonetized currency was already back into the banks. RBI has not released data beyond that point of time. Based on a reasonable guesstimate, I would expect the final number to definitely touch 90% or above. Besides, we already know that unaccounted income in cash is 6% - so don't expect a number lesser than 90%.

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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by mbesto on Wednesday January 25, 2017 @08:47PM (#13488053)
Ya, I'd like to know this too. I was just recently in India for 3 weeks and I saw day after day that IT was bringing in people for black money (usually to the tune of $1M USD equivalent). Just propaganda then?
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Re:In Its Third Month, India’s Cash Shortage Begins to Bite by bogomipz on Wednesday January 25, 2017 @07:26PM (#13487605)
I'm not following your first point, the denominations that were demonetized and exchanged for new issue were the black currency no?

Can you clarify?

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