Cash Ban the Best Thing to Happen to Indian Digital Payments
bloomberg.com
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The whole thing seems like a clear win to me.
Hold on, let me spend time walking 10 miles to a bank and sign up for electronic payments instead of tending my field and barely making enough to survive on. Yeah, while this is great for India's banking industry to get some growth, I hardly see the benefit for the significant rural population that does not have easy access to a bank nor any of the supporting infrastructure that is required to support electronic payments.
Is it good for them tomorrow, likely not but what about six months from now? you get side benefit of being able to track transactions and tax avoidance.
A lot of good people would consider that to be the opposite of a benefit.
it is a step against corruption
And, government surveillance for online transactions should be similar what is being done in western countries ;)
2: Try getting that ₹2000 changed with any shop on street.
3. I have yet to see any of the ₹500 in any ATM in Bangalore, it still not well circulated
4. If anyone thinks ppl keep bulk of their ill gotten wealth in cash they are idiots, sure this affect few % of the wealth of rich corrupt people that was in cash, however it impacts the poor 100x more. I can't pay my maid's salary because I don't have the any kind of notes, while I can manage fine using cards, she doesn't even have a bank account, remember > 50% of India is not banked.
You are partially correct but govt has to start from somewhere. As you know they are also going to attack "Benami" property.
http://indianexpress.com/article/india/india-news-india/blac...
http://timesofindia.indiatimes.com/city/meerut/Sedan-caught-...
http://economictimes.indiatimes.com/wealth/whip-cracked-on-b...
> it impacts the poor 100x more
I will not consider anyone poor if he spends more than Rs. 500 per day. This figure is correct on weekly basis. Rs. 500 per week. Poor people earn at most Rs. 250 per day. keep that in mind. Having a fixed deposit of bank account is better for them anyway, because they don't have to worry about income tax dept asking for tax from them. I know they aren't educated enough to do the paper work. But trust in Banks is good thing because it will cut down middle man and they will directy get benefite from the schemees which means less scams irrespective of who is in govt.
Street vendors see Rs 500/1000 note once in a while.
Plus, Average Indian Spends $1.8 Every Day.
https://en.wikipedia.org/wiki/Poverty_in_India
https://www.saddahaq.com/average-indian-spends-18-every-day-...
http://www.hindustantimes.com/india/family-day-how-indian-fa...
http://timesofindia.indiatimes.com/india/Spend-Rs-32-a-day-G...
You should also understand that opposition is trying to create panic, so people protest againt current govt.
> she doesn't even have a bank account
Help her create a bank account + tempt her with interest she will be getting + there is no risk of anyone robbing her savings
By people dealing in cash to avoid paying tax.
Yes!, that's why they shouldn't be focusing in disturbing people's lives and increasing banks and government power and surveillance!
As it turns out, they are replacing those denominations with equal or higher currency values.
This has happened in India before without issues. The current problems exist because of the scale at which it is being done and the short period of notice given.
Digital payments are taking off because there is a shortage of currency for the amount of money being demonetized. This is not a move made by the Indian government to push surveillance or other nefarious purposes.
what makes you think that?
If the government came and said "Because terrorists drive cars between the hours of 1pm-3pm, we are banning all car use between those times." You wouldn't say they replaced the current driving rules with newer ones, you'd be upset you couldn't drive between 1pm-3pm and instead had to use a less efficient means to carry out your business.
The government is unjustly punishing the whole class because some individuals made the decision to break the rules, and as punishment, it is now harder to maintain financial privacy. Yay. Just what I wanted, less privacy in the age of everything is in a database and everyone is on a list.
They removed Rs500 and Rs1000 from circulation, yes. A newer _Rs2000_ is already in circulation and a newer Rs500 soon to follow. So this statement is inherently wrong.
> If the government came and said "Because terrorists drive cars between the hours of 1pm-3pm, we are banning all car use between those times."
The govt actually said "Because terrorists drive fake cars of model A and B, we're making it illegal to drive A and B on the roads. Anyone who has a legit model can take it to the manufacturer to get it replaced by a newer model." I'd still be upset about the discomfort, but at least the example used would be more accurate.
> The government is unjustly punishing the whole class because some individuals made the decision to break the rules, and as punishment, it is now harder to maintain financial privacy. Yay. Just what I wanted, less privacy in the age of everything is in a database and everyone is on a list.
It is currently estimated that just 1% of Indians pay their taxes [1]. I don't have any views on whether there will be a drop in financial privacy (since I see the govt tracking bank accounts, which they were always able to do), but I'll be glad to see that number rise from a paltry 1%. Also, cash transactions aren't outlawed, so you're more than welcome to keep you transaction "private" if you please. There are talks of a cap to cash transactions, but nothing has really materialized yet.
And finally, I'm not for or against the measures the govt is following. I'm glad _something_ is being done, but am also skeptical about how effective it will be in the long run. It will depend on what additional measures the govt. brings to curb further accumulation of black money with the new denominations, and the ability to buy and hoard assets bought by said black money.
[1] http://www.cnbc.com/2016/05/03/guess-how-many-people-pay-tax...
[1] http://www.pri.org/stories/2016-11-23/indias-crisis-over-ban...
The majority of working-class people in India are going through a phase of love and adulation for the ruling party and the Prime Minister, so any public opinion on social media against the establishment is met with intense opposition.
The news media aren't helping decipher the actual state of reality. Much like the US elections, Indian media fuels the polarized population with provocative news stories, and "alt-media" outlets publish opinions and fake news as facts. Many accuse major media houses of unfairly favouring the right-wing govt (much like Fox News in the US) due to connections of the govt with business houses that run them.
The demonetization move comes at a time when political parties are gearing up for elections in major states. From extravagant political rallies to feasts, a lot of aspects are funded by cash. Politicians have a history of hoarding cash for elections and "buying" votes from the poor. The demonetization issue was also promoted as a way to deal with a fake-currency printing industry allegedly being run in arch-rival Pakistan. This bodes well with the "Nationalism Wave" promoted in recent years.
Is this really true? The mainstream media houses are all helmed by pseudo-liberals that have in the past been very biased towards the Congress Party.
Not sure why they would be a obstacle to a payment system.
In general many poor people, even in cities, do not have bank accounts and face lot of issues when opening such accounts. Sometimes bank require a "reference" from an existing customer to open an account. Sometimes many such poor families (say 20 families - think of it as a big landed area with 20 small houses) live together at a single address, paying rent for a single room, and the banks will refuse to open so many accounts under a single address. Their are several such smaller issues that crop up when trying to open an account that are not well known and that only the people in a particular city or locality face.
These people cannot deposit their savings since they don't have a bank account to begin with. And they definitely have savings in Rs 500 denomination since 500 is nowadays often used in the markets. Essentially, this ban has hit hard the common people. The very rich are hiring others to do the transactions and exchange of money. The lower middle class and poorer sections are left wanting for cash. Hence, good idea, but bad implementation.
In general many poor people, even in cities,
do not have bank accounts and face lot of
issues when opening such accounts.
Check this article from Feb 2015. Only 23k families were without a bank account. In a country of 250m families! In the last two years I think they opened 200m - or something like that - accounts. http://www.business-standard.com/article/current-affairs/nea...
Agree about it not being very well managed, specially the ATM calibration issue.
But I have no doubt, it would massively help in making digital payments mainstream. Already since 9 Nov, digital payments have overtaken credit/debit cards as stated in this article. Possibly it would even make India an even bigger market than China.
It would also fight tax evasion - right now India borrows 60b$-70b$ every year - when coupled with tax reforms like GST which is set to kickoff next year. Btw, since last few years you need to supply an Tax Id whenever making transactions of more than 1k$ in cash, so this step fits in perfectly with that as well.
There's some short term pain, but the medium/long term gains massively outweigh it.
Not sure. The only explanation I can think of is that they don't have Aadhar being illegal migrants or something like that. Or that the bank they are visiting is mismanaged - for which someone should file a complaint.
Btw, you can tell them that they get a full savings account at post offices as well. If they have some savings, it's better for them since interest is higher for families with BPL cards.
Raghuram Rajan, the ex-RBI governor was in favor of tracking transaction data too (and wasn't in favor of demonetization), especially since he felt that the tax rate in India is already reasonable compared to other Industrial nations. [1]
So instead of ending the discussion at "It invades people's privacy, full stop", can we talk about ways of ensuring greater chance of collecting taxes? Maybe examples of how other countries have successfully tackled it?
[1] http://www.newindianexpress.com/business/2016/nov/10/the-cle...
Cash hasn't been banned in India. Only ₹500 and ₹1000 denomination currency notes have been scrapped. Replacement currency notes (₹₹500 and ₹2000) with new design are being disbursed at banks and ATMs. It would take few more days to stabilize, that's all.
So why do you need ID when changing the notes? It looks like move to approximately sum up who had how much money in cash.
By forcing people to exchange cash, they're forcing people to declare untaxed income, which will be taxed at a higher rate.
There are more clear cut cases of the Indian government trying to create a surveillance state. Trying to group this under the same category just creates unnecessary noise.
The black market is a bogeyman. I hope others see this as well.
When transactions are controlled and surveilled then what can stop total control by a determined government?
To you, maybe. Maybe you haven't seen how insidious and prevalent corruption is in India? But everyone I've spoken to over the past 3 weeks, who are all solid middle-class, has been for it.