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Comment by crdoconnor | Hacker News Reader

Black money largely isn't held as large stacks of suspicious looking cash - that's a Bollywood trope.

It's invested domestically in real estate, art, gold, or other assets, or held offshore, either in the form of freely convertible currency or other assets, which is why 98.96% of the cash was returned.

I strongly doubt a significant number of criminals openly advertised their possession of black money by returning it themselves.

Modi's ploy was an unmitigated failure.

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For real estate, art, gold, assets and overseas moves, the question still remains as to what the sellers then did with the cash. The buyers might have gotten away, but the sellers are still caught with bags of that need to be laundered.

There was a huge collateral cost, I don't think anyone can deny that, but whether it was worth is still too early to call.

The sellers reported they sold real estate, art and gold before the cutoff, no? How would the government know they sold it illicitly if it was cash? How would some of these art, gold and real estates salespeople know for that matter?

If criminals didn't turn in the cash, then it evaporated, which is just as good. No?

No. Just 1% of the cash evaporated, as opposed to 33% as Modi predicted, and majority of that was probably just due to loss or unlucky circumstance.

For such a disruptive event, that's pathetic.

The only winner was the banking system, who saw one of their major competitors (cash), hobbled. Modi now seems to be saying that this was the point all along.

Direct evaporation is only one part of this. You need to consider the overhead as people tried to get money into the banking system without alerting the government.

AKA, If you started with X money hidden then you don't get to keep 100% of that money if you hand it to other people to deposit.

On top of that people where caught, so actual black money disappearing was much greater than 1%.

Overhead didn't reduce black money, it just changed hands. From merchants to bankers and launderers.

If you hand money being saved to several people, those Y people are going to spend the money they just got. Thus, moving it into the taxed economy.

Just because cash came back into the system doesn't mean anything. The real troubles for those avoiding income tax begins now as the govt tries to go after those who replaced more cash than their declared income.

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