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Comment by 0xmohit | Hacker News Reader

I am amazed the amount of selfishness we exhibit.

If I am unable to pick up groceries for the lack of cash, I can surely choose to order it online (using a credit/debt card). A vast majority of Indians cannot.

A majority of Indians don't have access to banks either. They will be forced to exchange their now illegal currency with the help of agents who would charge them 50 to 60%.

Most of the ATMs are out of cash. There are huge queues at banks; most of them are giving away Rs. 2000/= bills. Amusingly, if you were to give the new bill to a shopkeeper chances are that he'd refuse to tender the change back as the closest denomination to that is a Rs. 100/= bill.

Statistics reveal that only 6% of the black money is in the form of cash. As such, the argument of declaring higher currency notes as illegal tender in order to curb black money in unconvincing.

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> A majority of Indians don't have access to banks either.

Forget banks, many don't have ID. Ration cards exist, but those are tied to your household so you may not easily be able to get access to your ration card (say if you're in a city with family -- and ration card -- back home). In case of estranged women it's even hader.

Without ID they can't exchange larger amounts. It's also hard to create a new bank account on short notice without this.

My mother once helped a young woman set up a bank account. She had come to Mumbai to find work, and used to live at her aunt's place, and her aunt would hold her money for her (but skim off it). Most such people keep their savings in cash someplace "safe", though some use post office accounts. Anyway, the process was arduous. Her name was garbled on her family's ration card, and they needed the original, which was back at the village. This took forever to sort out.

This is going to be hard to work through for a few. Especially those with lower income who keep most of their life savings in cash.

Actually dealing with banks is a luxury which Urban Indians assume is available for everyone. Its not.

Most banks are huge red tape in India and corruption is quite common. Even to dispense cash/loans a lot of times local rural banks ask for bribe. Which is why most people go a distance to avoid dealing with banks.

This problem was addressed by co-operative societies to an extent, but it doesn't scale though.

Debit/Credit/Electronic transfers are for the privileged in India.

FWIW post office savings and patpedhis exist and can be a viable alternative to banks, but you're right in that it's still problematic (and these can be more prone to corruption).

I completely agree. We can see the full picture of it now. The banks are such a pain and since most of the banks are nationalized the employees are a real pain. The post offices do not even have proper facilities to store large sums of money and there are cases where rats have eaten currency in lockers!

  This is going to be hard to work through for a few. Especially
  those with lower income who keep most of their life savings in
  cash.

They don't keep their savings in cash because of will, but because they are essentially forced to. I've seen several people (maids and such) struggling forever to open a bank account or even get a LPG connection.

... and whose fault is that ?

The going rate for Rs.500 in Bangalore which is a fairly developed part of India is Rs. 180. So, your 60% number is not fully wrong.

If it's really just 6% of tax evasion, then I honestly think this is just a political decision trying to keep their promises.

I'm really curious as to where you learnt of that 6% statistic. Any links you can provide?

  Cash recovery has been less than 6% of the undisclosed income
  seized from tax evaders, shows an HT analysis of data from tax
  raids from financial year 2012-13 onwards.

  Financial year 2015-16 saw the highest black-money detection in
  the period, of which 6% was cash.

Source: http://www.hindustantimes.com/india-news/cash-has-only-6-sha...

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