November 16, 2016

Still trying to understand how...

Still trying to understand how replacing a Rs.1,000/- note with Rs.2,000/- will reduce corruption.

Comments welcome.


18 comments:

  1. Government move is very good move. This they would have announced after having printed enough Rs 500 & 100 currencies in hand. Also shortfall of 500 & 100 currencies is the only problem. The hoge cry is really not for common people problems, this purely by the Black Money people.

    ReplyDelete
  2. Hello KPL Sir- My understanding is that its the stop gap arrangement for time being to adsorb sudden liquidity and later these denominations also will be withdrawn from the market. Yes there will be cash transactions with these notes till these are valid. After 1-2 yrs, these higher denominations should also be withdrawn (new notes only).This is Arthakranto proposal. http://www.arthakranti.org/

    ReplyDelete
  3. I think Rs 2,000/- note is temporary arrangement, Ultimately it will be discontinued.
    salil

    ReplyDelete
  4. 1000 notes is like highway, 2000 notes is a temporary diversion to avoid road block. If this govt can show the guts, political will power to close highway then trust it will show same guts to block the diversion in days to come too. This was the comment borrowed from ABP Maza interview of Mr. Anil Bokil, if you haven't seen it would strongly recommend to check it. Mr. Bokil is the father of arthakranti

    ReplyDelete
  5. May be it could be again a strategy against corruption.

    ReplyDelete
  6. Govt never said 2000 note will help reduce corruption as agaist re 1000.This higher denomination is only help faster operatin of printng n distribution of @12 lakhs cr.This can be reviewed later.The objective of demonetisation is to control fake notes,Non moving notes in cup boards in the form of bk money,and control mafia net work.Govt believes that out of 16 lakhs cr ,4 lachs cr will not be retuned to bank,This black money will not be used by them .which is rolling in parallel cash mkt without earning any tax to govt .They want to promote plastic money (RTGS),which naturally will give faster rotation of money.And you more the official turn over more will be the return,tax revenues.Now regeneration of black money cannot be ruled out in any CASH transaction irrrespective of value of re 10 to res 10000 notes.more rtgs more tax.More cash more blk money.Generatuin of blk money has nothing to do with value of the note.Hope I could explain you,I am not an economist but just a layman ,which please note.ARVIND MODI

    ReplyDelete
  7. http://zeenews.india.com/news/india/explained-how-rs-2000-note-will-curb-black-money-gujarat-cas-open-letter-to-arvind-kejriwal-breaks-internet-must-read_1949522.html?src=fb

    ReplyDelete
  8. This is a general reply to all the messages posted. My query was how would this reduce corruption? The govt employee or some local politician demanding 2000 rs bribe will continue to demand but now get it in a single note. This is unlikely to end anytime soon. The only solution is prevent opportunities where this black money can be deposited. eg. real estate, gold etc.

    Most of the black money in India is invested in real estate and gold. This demonetisation will not unlock these assets.

    Suhas - there is a basic flaw in the zeenews article. Existing pay slips can be used for valid / new currency notes and not expired ones. For depositing/ surrendering the expired currency notes, you have write a small declaration giving source of funds and reason for depositing.

    To that extent, the explanation posted by the CA is misleading/ incorrect.

    ReplyDelete
  9. Further demonetisation is not a simple straight forward solution as put forward by the govt. Other countries have done this with disastrous effects.

    Read http://www.bloomberg.com/news/articles/2016-11-15/memo-to-modi-banknote-reforms-are-risky-as-gorbachev-found-out

    ReplyDelete
  10. it will reduce corruption and black money from the market.

    ReplyDelete
    Replies
    1. How... that is the explanation I am seeking.

      Delete
  11. Our prime minister Mr.Modi took 3 years to take this decision after hearing Anil Bokle.Modi is another person like Mahatma Gandhi for India.Just believe in him and go through little pains for brave decision because nobody other than our prime minister Modi can ever take such bold decision.Nobody can ever work hard physically n mentally like Modi.He is very selfless person in the world.I bag you all citizens to support our prime minister fully.Do not listen to any other person who are jealous of Modi.He is like God for all Indians.We must protect Modi.God bless Modiji n keep him for 10 years as our prime minister then India will be number one in the world.We can do it.

    ReplyDelete
    Replies
    1. I am an atheist and don't believe in man made concepts like God.

      What I do know is that demonetisation has failed very badly in the past and it has taken years for countries to come out of it.

      The problem is not in the concept ... at a theoretical level, demonetisation is good but implementation/ execution is key... here I think the government has messed up this big time. If things don't improve at grassroot level in next few weeks, there can be a massive civil unrest in India.

      Delete
  12. Listen to Anil Bokil everyday you will get all the answers.

    ReplyDelete
    Replies
    1. Read about him some time ago... but this still does not explain how corruption will come down. Black money, yes but how will corruption come down?

      Delete
  13. I support KPL ji view to certain extend.

    No doubt this is brave move and Mr Modi honest,loving,respected and Godly person or God.No one is questioning about the motive (eradication of corruption) we are concern about the execution(introduction of 2000).

    Supppose, one person has a tumor (corruption) ,Some good Doctor(read Mr Bokil) advise,tumor has to be removed,and person father (Modi) agree,obviously to save the person(common man/India)

    The modus operandi
    1. Doctor stabs the person randomly 4 to 5 times,no explanation.no question asked,if Doctor is doing it has to be good for you.. guess what the result????
    99.99% of times the person will die ...

    2. Doctor explain the outcome of operation,the nittygritty involved,limitation of the method and medicine and then operate the person ... outcome same, the person dies.

    so what conculsion one can drawn...
    1. In any case if the person has to die why bother about execution.(if some one life is in Gods hand we are just puppets / Doctor is God have complete faith in him.etc)
    2.Even if the patient dies in second case,the outcome on percentage is very less say every 100 operation 5 % to 7 % ,lets put round figure,say 10% dies and remaining 90 % survive.
    secondly what went wrong with 10 % can be debated,questioned and if required new method,system implemented .


    I am not saying Mr Modi and his expert team has not given any thought to this action.As a common man paying tax I just want explanation.How this move(2000 note)is going to end corruption.If it is logical explanation then why not introduce 5000,10 000 or even 1,00,000 note.what is stopping Govt.

    Only having good motive is not enough,action should also be good( read as explanable).





    ReplyDelete
  14. Rs. 2000 note is probably not introduced to reduce corruption. That is just a stop gap arrangement.
    The overall scrapping of 500/1000 is to reduce the counterfeit money as well as to clean up all the hoarded black money. New cash is being disbursed only by documented system. Asking bribe will still be as easy as before, but giving bribe is temporarily difficult. If people have to give, they will have to give from their documented income. Over longer term the undocumented cash will stay at a lower level. Honest people will have no effect. If you had to pay bribe to some official, you would have to do it.

    ReplyDelete