Does The Black Buck Stop Here?

Only salaried class pays tax .. And banning note is not going to get them to start paying taxes , you need enforcement if existing tax laws .

The issue here is this move is not thought through before implementing that is why people are complaining , no body would complain if there is a tax raid on any small fish or big fish ..

The amount of people suffering is huge in this way of implementing where govt did not even plan how it will replace the notes being banned.

They could have achieved a lot if they have targeted big monies which would have impacted few but the lesson will be learned by all .

And I said it should start with political parties declare their funds before asking anyone else to comply .

 

1. PM announces demonetization and that the bank will remain close for two days and then people will be able to exchange money.
2. Daily withdrawal limit of Rs. 4000 is placed.
3. Max withdrawal of Rs. 20000 per week
4. Limit is increased to Rs.4500
5. People exchanging notes are marked with ink to avoid multiple withdrawals.
6. Marriage proof required for withdrawal of 2.5 Lakhs.
7. Limit is decreased to Rs. 2000
8. Farmers can withdraw max of Rs. 25000 for farm activities.
9. Govt officials are allowed advance salary payments of Rs. 10000.

Is this democracy or dictatorship?

Zimbabwe, Zaire, Myanmar, Ghana, Nigeria all had military dictators who demonetized their currency. The aim was to quash the opposition. With advance notification to it's supporters, Modi's aim has been to quash the opposition rather than black money.

Australia changed their currency to polymer bank notes instead of paper currency to make it difficult to counterfeit. Why did Modi replace paper currency with paper currency? If counterfeiting was an issue?

Modi talks about scams. But why there has not been a case filed against any of the scam leaders in 2.5 years? Why there has not been an investigation on the Vyapam scam (BJP government)? Why the government didn't file an appeal against Jay lalitha and Yeddyurappa who were acquitted after having found guilty?
Ramdeo baba's Patanjali has a revenue of Rs. 5000 crores, but pays no taxes. On the top of it he is provided Z security at tax payers money. Why? Why can't he hire his own security?

All it takes to stop corruption is to have big fishes caught. If big fishes are caught and sent to real jail (not 5-star jails), small fishes will exists. It takes many small fishes to equate a big fish.

 

The black money happens because of the following reasons.

1. People get benefited from lower stamp duty and lower property tax if the value of the property is shown less. This is the reason that people are willing to pay part of the property value in cash.
2. People want their children to become doctors and engineers. If the admission doesn't happen on merit, they are willing to pay donations.
3. People are willing to pay donations even for KG.
4. People are willing to pay donations even for reputed tuition classes.
5. People don't want to be punished for speeding or DUI and want to get away with incident by paying cash to the policeman.
6. People want to avoid paying taxes and are willing to give bribes to the IT guys.
7. People do illegal constructions and are willing to pay the municipal guys to avoid their case.
8. People want to import more than it is allowed and hence are wiling to pay to the custom officers.
9. People want to drive imported cars and want to avoid paying taxes on the cars and they find their ways of avoiding taxes.
10. People working in government are willing to bribe to advance their careers. I have heard it takes crores of rupees to be a police commissioner.

As long as there are givers, there will be takers. On 1st Jan 2017, will people suddenly stop doing all of the above? If not, black money and corruption are here to stay in one form or the other.

 

@Akanksha1982 - this move to remove old 500 and 1000 rupee notes was NOT to remove corruption or stop people from paying bribes but to bring a large part of the Indian economy into the banking system. And everyone having 500 or 1000 rupee notes is certainly not a criminal. Consider 86% of the notes in circulation in India consisted of 500, 1000 rupee notes and lot of it either fake or black money(i.e. money on which people hace not paid taxes to the government). Our neighbouring countries Pakistan, Bangladesh print fake Indian rupees and smuggle them across the border and use that to fund insurgencies in India.

After the move to make 500 and 1000 rupee notes redundant persons in possession of these will have to exchanges these notes or deposit them in their bank accounts. These have ceased to be `legal tender` from November 9th 2016 onwards, as per which these notes cannot be used for official purposes such as settling a loan etc. Shopkeepers are still accepting 500 rupee notes which they are depositing at the banks, this certainly not `black money` as it is their daily earnings and accepted at the banks - am saying from my experience at Mussoorie and Bangalore. Old notes can be exchanged or deposited till December 30th 2016 after which they cannot be used at all. Currently new 2000 rupee notes are being distributed and 500 rupee notes will also be available in 1-2 days. Weekly withdrawal of Rs 24,000 cash is allowed from bank accounts which is more than sufficient for a normal household IMHO. Exceptions are there for current account holders, farmers, people celebrating marriages in the family, etc. Old notes upto 2.5 lakhs can be deposited without IT query, above that one has to show the source of the cash. If it is all legal and not untaxed cash stashed away then there is no issue else there is a 200% penalty on that amount. So for example someone has withdrawn cash for house painting or a wedding then there should not be problem if it is all legal. People have received queries from Income tax officials and have settled them with emails detailing the source of the cash with the required proof attached such as bank statement etc.

So those who have unaccounted cash with them are trying to exchange the notes through clandestine means (such as the BJP MLA from Maharashtra caught with a car full of cash!) or destroying them. One reads of piles of cash being burnt with garbage or let into rivers.

We are also celebrating my neice's wedding this December and all the expenses except the flower decorators will be paid through card or cheque though the singers who had been hired are now not going to come as 90% artists/singers who used to perform for such functions are used to taking cash only and some do not even have bank accounts, so they are in trouble.

All in all a very revolutionary move by Modi govt trying to change the rot that has been festering in the system in India for 70 odd years.

@Balajee , does Aam Admi Party's decision to not contest elections in Mumbai and Chandigarh city corporations announced after this brouhaha have anything to do with being choked of illicit/black money.... ???

 

A total cashless economy has severed drawbacks.

1. In case of natural calamity - floods, earthquake, fire, etc, there is power cut for several days, which makes it difficult for people to use their plastic.
2. In case of war, the whole system gets paralyzed and again the plastic becomes difficult to use.
3. If the government can put severe restrictions on cash, they can put even severe restrictions on plastic. Limit the amount of credit a person can carry, limit the number of cards a person can carry, limit what a person can/cannot buy, etc.
4. Hackers can hack the systems and steal or impersonate a large number of people. With many people in India not familiar with plastic can become easy targets.

Every country in the world has cash even though the use of plastic has been higher.

 

However noble the end is, it doesn't justify the means.

Your post reminded me of George Bush reasoning for going to war on Iraq. He talked about Iraq involvement in 9/11, weapons of mass destructions and spreading democracy in middle east. One or more of this justification got stuck with people and they supported the move. Eventually, none turned out to be true. It seems the same case here, move unaccounted money into the system, punish black money hoarders, and eliminate fake money printed in Pakistan. So this has attracted people with one or more of this reasoning.

On the reasoning of fake money, the government has said that if the note loses color, then it is genuine and if not it is fake. This means that the fake notes are already in the market.

On the reasoning of Pakistan able to print counterfeit currency, put them in India and impact the Indian economy. If this influx has such a serious impact to India and is so easy for Pakistan to do so, why can't India do the same to Pakistan. A mere 10% of influx of false currency into Pakistan will create a huge inflation. There has been no mention by Pakistan of any such activity by India. Also, if Pakistan can counterfeit 500 and 1000 bills, wouldn't they have counterfeited 100 bills as well and squeezed them in Indian currency as well? Were the counterfeit currency only 500 and 1000 and not other denomination? Wouldn't it be easy to circulate lower denomination than a larger one?

The shopkeepers shouldn't have been accepting the non legal tender notes. The Government has specified who can accept it. But they are accepting it. What if they are depositing only the banned notes? So all the lower denomination notes collected they keep and submit the banned notes either the ones they had or one purchased from others? Modi had mentioned in his speech to not sell the banned notes cheaply. Which means some people are purchasing it. These are the people who have cash transactions, shop keepers. Most of them don't have perishable items that they have to sell immediately and take the risk of accepting the notes in a hope that the bank will eventually accept them. So why they are taking such risks? They can give goods on credit as well.

I haven't been able to understand why would one burn the notes. They can dump them in temple. Why would someone burn them. May be it is a way of revolt or may be they know they have fake notes. It is also possible stunt by government to dispose of the fake money they collected or the real money they have made it illegal to show that their plan is working. There have been incidents of fake encounters done by police so it wouldn't be surprising or far fetched.