Rs 500, Rs 1,000 cash ban: Indian government failed those without bank accounts
firstpost.com
firstpost.com
1.cash riots for lack of cash in every market.... Indias 70 % population use cash.
2.Normally 10% of ATM's don't work.. Now it's 95% of them not working.The anger is raising every minute.... It will be unsustainable if riots breakdown...please do something creative "Lets not become another riot hit country."
3.Demonitisation caused Prices of perishables to raise /it will kill the dealers. The big market yards all deal with cash.... It's nightmare to ask them to even do basic signature forget asking them to do fund transfer. It's far too tough and far too many people are being left behind because they are illiterate. Everything will skyrocket from here.
4.Realty will fall 40%. With it all support industries like Telecom and Infra industry. Only infra projects which get government payments will be sustainable. Rest in single sweep go down to no point of return.
5.The illiterate and masses are the most effected with this move. Remember 80% of Indians earn less than 2lakh. All they get is daily payments... I got at least 5autowalas and others to open bank account. When I looked at the scale of getting 50crore Indians onboard is far too much to little time of 30 days.
It's become war on the poor and illiterate instead of black money hoarders. I am sure there are better and more suitable solutions instead of this mess.
Dear Smart HN reader,Kindly suggest ways what do from here on,otherwise the poor will suffer because they are not smart enough to open bank accounts. I will publish solutions suggested here to all news agencies.
People aren't buying non essential goods. Clothing, Electronics others etc industry is suffering by the minute. There is no money to payout lower middle class and poor people. On top of this you see secondary effects like food running out, or getting expensive. No fuel. Emergency services in peril because hospitals aren't taking cash.
They need to find solution to the crisis within Monday before the poor have a last-straw-on-the-camel's-back situation, and something ugly unfolds from there on.
1.EMERGENCIES 2.FOOD 3.RIOTS 4.LAW ENFORCEMENT BECOMES NIGHTMARE. 5.Everybody is calm till supplies last. Locality by locality, then city by city and state by state will fall. Fall in terms of food supplies ,emergency services,transportation and then riots.
But by looks like it that, credit kirana shop economy is quite close to collapse.
Hope they mobilize distribution on a war footing now.
Now they created this panic n confusion n artificial scarcity. Artificial scarcity helps create black funding.
While cities will see skyrocketing of price because of lack of stock.
Modi has hit at the heart of Indian economy of Farmers. They just are helpless ,the panic is rising every minute and it will create chaos in matter days.
Hundreds of thousands of ATMs need hardware (the new currency notes are different in size so the existing dispensers need to be replaced) and software (to dispense only fixed quantities of new notes). The latter is being programmed literally on the fly, and is quite buggy.
Meanwhile politicians and others who've been sitting on huge piles of money are getting it 'washed'/converted into legal money through a mind boggling array of creative schemes. The people who are suffering are those with 'normal' cash flows, from salaries etc, on which taxes have already been paid.
This may or may not have been a good idea in the abstract, but the implementation is a huge huge mess. [1] Public anger is beginning to rise [2], and many black jokes are going around that have the theme, "The Prime Minister made a dramatic announcement, then went to Japan to ride on high speed trains. We citizens are so screwed". This is being applauded by people of Indian origin who don't live in India. As I said above, the idea seems good in the abstract, but the execution is terrible.
Personal Experience: I had to wait 3 hours + in Bangalore to get 35$ worth of small note currency.
[1] From the same source as the OP http://www.firstpost.com/india/rs-500-rs-1000-ban-it-is-the-...
[2] a mainstream newspaper discussing how police is being deployed to protect bankers from the public http://indianexpress.com/article/india/india-news-india/delh...
Dollars? in India? It should have been 'rupees' right?
$35 is a pack of big macs in the SV. It could be days/weeks/months??? of revenues for a remote village in Indian. A dollar figure doesn't tell about the costs of living, it's misleading at best, manipulation at worst.
And we don't know the exchange rate either. So how many Rs 500 note is $35... not a clue.
From another comment, I assume 5 notes should make $35.
the point was that it is a small amount. I wrote in a hurry, sorry. had a long tiring day.
care to share these creative schemes ?
2. Pay loans to small time farmers at a discount and have change that at the bank.
3. Buy cars at pre dated receipts for your relatives etc.
4. Invest in innovative chit fund schemes/pygmies.
etc etc.
White wash jugaad's are plenty.
1. Go to your jeweler and ask them to sell gold with a predated receipt.
> Jewelers are getting raided now
2. Pay loans to small time farmers at a discount and have change that at the bank.
> Too much labor work here and nothing much to gain
3. Buy cars at pre dated receipts for your relatives etc.
> How many cars you can buy? 5? No benefits here. And, you think you can get predated receipts just like that?
4. Invest in innovative chit fund schemes/pygmies.
> Also not much to gain here.
Looks like you are thinking about common man here. Instead think about people who have at least 30 crores of black money. They are the ones who are hit hard by this govt plan. They are never going to go out and deal with peanuts.
Indian Jugaad knows no bounds. For every lock there are keys.
no, because these were private conversations, by people who trust me to keep my mouth shut, about ongoing operations. Suffice to say many powerful people in the government are involved. Maybe sometime in the future, when all this madness is behind us.
That being said, I would avoid lamenting the troubles of middle-class and poor when the rich are going to be unscathed. It's true that some leaks would impossible to plug, and people would find clever ways to get some of their money through, a great deal of ill-gotten riches is going to affected by this. It'd be almost impossible to launder monstrous amount of cash that sits inside coffers of those who invariably assumed that they were immune; the mandated limits simply make it impractical.
When you're buying a house in India, there is no way you can go about it in honest means. The seller would usually ask half the amount being handed in cash to avoid taxes. Almost everywhere, a large slew of businesses always avoid paying any kind of tax. The pattern is so ingrained that it's almost become a habit. And this is only tip of the iceberg — political donations, bribes, illegal trades, hawala all stem from the same thing.
Maybe I am speaking from an ivory tower, but if this instills a good habit in minds of people — of being part of a transparent economy — probably the benefits would far outweigh the cons.
Noble thought but unfortunately, not likely to happen. At least, not at a scale large enough to make any difference.
IMO, the only way that an effective change could come about is cleansing of the political/bureaucratic/governmental systems - and corrupt ways there of - and the current actions will only go to boost those (ways) even further.
Not trying to argue about this. But I had Rs 75 in my wallet when the announcement was done, and since then I never had to go to an ATM. Didn't have any problems whatsoever.
I have monthly account books running in vegetable and grocery shops. And they have given their account nos. The only time there was an issue was at the barber shop, where I offered to pay by paytm, but the guy said to pay later. So yea, I haven't had to go to an atm, and I don't think I need to unless there comes a pressing need.
EDIT: grammar
Some banks are seeing so much cash being deposited, it's weird. I was sent a photo of plastic bags full of cash tossed on the floor in the corner of a bank.
People are starting to get very very restless and often violent. Not surprising, as I hear they're queueing for six to eight hours only to be told there was no more cash to dispense.
The intentions were good, but this could be the act that topples the Modi government. This is a disaster in the making.
It's frustrating because it also forces me to be more tight-fisted with my money than I would like to be. The amounts aren't consequential to me, so I would ordinarily tip very generously. In this situation, I've had to be somewhat stingy with tips in order to have enough money to eat and pay my bills.
It's a stressful experience for tourists, and it's almost certainly costing workers in the tourism industry a significant amount of money.
I can see every minute it will become nightmare because nobody wants to spend because they don't have change. In matter month the tourism which relies on cash will be dead.
"Delhi Chief Minister Arvind Kejriwal has alleged that there is a huge scam behind the scrapping of Rs. 500 and Rs. 1,000 notes.
“In the name of tackling corruption, a scam is being carried out on a large scale... On November 8, when Prime Minister Narendra Modi announced that Rs. 500 and Rs. 1,000 notes will not be legal tenders any more, all friends and BJP people, who actually have all the black money, were informed prior. Those who had large amounts of black money got enough to time to take care of it", he said.
That’s the allegation. And it’s worth noting that Mr. Kejriwal is the leader of a political party distinctly in opposition to that of PM Modi.
http://www.huffingtonpost.in/2016/11/11/paytm-chief-vijay-sh...
You can see public reaction to Kejriwal's statements at following link. Whatever he is saying does not make any sense. http://timesofindia.indiatimes.com/india/Demonetisation-a-ma...
The new currency notes have no new security features [2]. So, this is just a break until new fake notes will be circulated in the market. It is important to note that the same government had called a similar move anti-poor back in 2014 [3].
[0] http://indianexpress.com/article/india/india-news-india/demo...
[1] https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?p...
[2] http://www.thehindu.com/news/national/demonetisation-of-rupe...
[3] http://timesofindia.indiatimes.com/india/Call-back-of-notes-...?
This. And so, the tens or hundreds of millions who are suffering due to this ill conceived and thoughtlessly implemented policy would have suffered for little national gain in the end.
I didn't have an active bank account until now. Most of my purchases were done in cash (as any villager would do).
My online purchases were done through some of my friends' accounts. I don't even give my address for shipping.
I fear I couldn't continue the same.
Number leads per day Nov 1st :986. Nov 2nd: 977 Nov 3rd: 956 Nov 8th: 705 Nov 9th: 403 Nov 10th:212 Nov 11th: 156
Remember more than 200 companies are effected because of this in one city alone. India has 2300 small towns n cities. Imagine the scale of business lost.
Lost business or leads not created because of demonetisation is huge. At this rate more than 70% of business turn over will be lost and this will kill small business completely.
No meaning in depositing money in banks to lend at loss to big supporters of current govt like ambani, Adani etc. Rajan was forced to go out. He would have never supported such foolish political move to trouble common man in India.
Taxes. The gov't can lock your bank account or take money from it if you don't pay your taxes. Then they are going to invent more taxes to be able to pay skyrocketing sovereign debt. Fines also. Then they will make you register other assets such as gold, art etc. and have it confiscated if you fail to do so. And it's not only India, it's allover the world. Good luck trying to pay in the EU with 500 euro bills or even 200 euro bills. Maybe after you exchange them at the bank and have your personal data on file. The US? Try to pay with cash in excess of $100. You do not have a credit card? Then you must be 1. a terrorist, 2. drug dealer or 3. laundering money.
As it is, following Sutton's Law, I expect they're going to go after retirement accounts first "because that's where the money is", 10 times as much based on a minute with Google now, and it's a lot easier to get at.
"So that this ill planned move became reality. "
There are n+1 ways in which such a policy could have been implemented without causing such massive amounts of hardship to tens of millions of citizens; especially the masses at the lower rungs of the economy, but that is the flip side of democracy.
And, to add insult to injury, the prime minister of India, shortly after announcing this madness, flew away to Japan and has been enjoying bullet train rides with his Japanese counterpart. God bless him and God bless India.
Yeah.
What he did here is to build on top of this framework. If people decided not the open a bank account and now are in a panic. Also people in India always used Cash (not necessarily black money). There is still time to open a bank account and deposit money.
I'm sure a LOT of people who helped put him there are regretting their decision right now.
> What he did here is to build on top of this framework.
A horrible, preposterous way to build!!!
There has been a push towards digital citizenship right from the beginning of this government. The first move was a reversal on the party's stance towards UID or Aadhar - an ID based on the biometric database of the entire Indian population. The party moved from being opposed to the UID, to supporting and even pushing it ahead. Then we saw a push towards payment banks such as Paytm, and a push towards every citizen to get a bank account. The government even opened an API for these payment banks to exchange money amongst themselves. I think the way it works is that users can now get IDs similar to email addresses, like abc@paytm or xyz@pockets and can exchange money similar to sending email, regardless of the wallet or bank account they use.
The demonetization is just one more step in the big project of digitising the Indian citizenship. The next step could be linking all bank accounts to the UID, and enabling payment authentication based on the biometrics from the UID, essentially making your UID your only bank account number.
This is in a way also a global experiment, as if a country such as India can implement a biometrics based ID/Authentication system, integrate them with the payments system and eliminate cash; that achievement in itself would serve as a big push towards a global cashless economy.
As far as the black money is concerned, there are already a lot of people willing to exchange old notes for new ones in return for a 20% or so commission. This is done by showing the money as savings from poor people, exchanging the notes in their name, paying them a small cut and getting away with the new, "white" money. The question is how much can be exchanged this way. Someone with a few thousand dollars over the allowed amount may not have much problem getting the money converted this way, but those with stockpiles having millions of dollars stacked away would definitely feel some pain. There are already stories of people dumping cash in garbage and of cash found floating in oceans.
A journalist from Kanpur published about the demonetization move about weeks ago, so I am guessing a lot of big parties involved would also have known about in advance, and laundered their money in time. I don't know how successful this move would be in curtailing black money, but it is already bringing returns for the Indian banking system.
Seems like you were offended by his comment. He is just surprised to know the value of Indian Rupee. Nothing wrong with that.
That said, 10-20k INR is in no way enough for a family of 5. Yes, it can buy them food and power but it's not enough. It'll barely let them survive.
'Quality of life' isn't directly proportional to the money spent.
Yes, money is required for happiness. But money isn't happiness.
And you know, now in India, the more money one have makes him/her more worry.
I was just bringing up the exchange rate in case anyone was wondering about the value of the notes being banned.
It varies wildly between parts of the US, and the rural vs urban areas. In Boston Massachusetts, for example, the median family of 5 makes about $6,000 after taxes ($84,195/year before taxes). In poorer areas/states, like Mississippi, families of 5 live on average, with $3,700/month after taxes.
So, ₹250,000 - 400,000 a month.
I'm beginning to think I should move to India!
Hm.. For you it will cost more than an Indian would.
Because we will label you as a tourist. So if we pay ₹100 for something we buy, you may be charged ₹200 or more.
Sorry. That's one of our income sources. :-)
The govt pushed everyone to create an account in any bank with any govt id card. This account operates/comes at free cost if you are operating under 50k rupees per year. This has been asked for almost 2yrs and public made aware of it. They clearly advertised that any govt benefits or subsidy will come through bank account only and its made mandatory for benefitting.
Now if those people are blaming govt for banning those notes, i find it funny.
If they are business people who are trading in lakhs, they must file Income Tax which in turn require bank account
If they are poor people who earns less than 1 lakh, i dont find a reason why they cant directly go to bank account and exchange money in next 1 month.
Perhaps because they can't wait a month before their next meal or fuel for their scooters or for household expenses?
"Now if those people are blaming govt for banning those notes, i find it funny."
I find it funny that some people find it funny that 85% of the currency bills in circulation are invalidated overnight. Maybe it's funny if all diesel vehicles are banned overnight because they pollute a lot? Or if mobile phones are banned overnight since they are used by terrorists?
Wow. Really?
Tell that to the millions of illiterate/semi-literate, lower-class people across the length and breadth of the country who are suffering right now. But wait - you don't need to. Modi already did.