The major chunk of black money – 10s, 100s & 1000s of crores – is NOT stacked in rooms or secretive chambers, as in the movies, by the hoarders. The rich who possess the huge amount of black money has it in the form of investments in gold, properties (movable & immovable) and in tax havens like Panama etc, which the people in the govt conveniently ignored to help their friends.
Also, the hoarders prefer to buy expensive foreign currencies (dollar, pound, euro etc) and stack it rather than the Indian currency since it becomes far easier to store .. a bunch of $100 100 notes would be equivalent to approx 7 bunches of 100 Rs 1000 notes.
So the demonetisation is not going to affect even a cent of all of these big fishes and the loss that they will bear on the uncounted cash in hand would be negligible – for them and the government.
In India, a major portion of population (more than 80%) is the part of unorganized sector and all of them deal in cash transactions. They are not black money hoarders but honest daily wage earning citizens. Eg shopkeepers, traders, farmers, plumbers, electricians, vegetable vendors, mechanics, carpenters, labourers, dhabhas, small eateries, sweet-shops etc – you name it and they are there.
Unlike the metro/ urban population, the major portion of population in tier 2, 3 cities, towns and rural areas save money in cash at homes. To make it easy for themselves, they prefer to convert the savings into higher value currencies like 1000 – just like the biggies do it in dollars, pounds? That!
THE RS 500 NOTE IS NOT A HIGH DENOMINATION NOTE AND IS RATHER AN IMPORTANT PART OF DAILY LIFE OF MILLIONS OF INDIANS.
These savings per household could run into thousands & thousands of rupees and are saved for rainy days, medical emergencies, education, marriage of children etc.
When you say go to the bank and deposit/ exchange & the shit – you must not forget the restrictions that the Govt has imposed.
Till 24th November, one can walk into the banks/ post offices and exchange the old Rs 500 & Rs 1000 notes but the maximum limit is Rs 4000 per day.
9th & 10th November the banks are closed and 14th is Guru Purab. So ideally one gets only 11 days to exchange.
In these 11 days, the maximum that you can exchange is 44000/- . That is it. Is this a joke? No! This is REAL.
SCENARIO 1: A vegetable vendor buys vegetables worth Rs 5000 everyday, sells it throughout the day for a certain value and invests it the next day and so on!
Now how this guy is supposed to be earning and also going to the back every day to exchange up to only 4000/- ..
Similar is the situation for anyone who is involved in daily trading of goods and commodities. Step out and look around in the street, most of the people will fall into this category.
SCENARIO 2: The farmers have harvested their rabbi crops, must have sold a portion of it, sitting on the cash or/ and would have taken loan from the local creditors for the next season. What are they going to do? They can’t exchange more than a few thousands (and please don’t tell me the BS that Govt will exchange all of it for everyone). HOW ARE THEY GOING TO SURVIVE?
The time is not going to wait for the farmers to get the new & exchanged bills and therefore they might lose out on the next season.
SCENARIO 3: Housewives in India have saved thousands of rupees over their lifetime for the rainy days. This is apart from the savings made by the household. What happens to that?
All of these people, apart from their daily earnings, who might be paying a very some or small amount of taxes or some of them might not be paying taxes at all due to low incomes and exemptions.
Now all of them would have accumulated a certain amount of savings over the period of time. Let’s say an average of Rs 500 ever month, for last 15 years, would have saved 90000/- .. This presumptive Rs 90000 is the lifetime saving of the hardworking honest citizens of India.
They can’t exchange all of it and so you say go and deposit in the banks. There is a large chunk of population who do not have a bank account – due to various factors.
Those who have, if they suddenly deposit a lakh or two into their accounts, you will send them notices. This is the wealth that they have accumulated over their lifetime – accounted or unaccounted.
But are these the small bread earners that the Govt intends to target under “War on Black Money” instead of the big fishes that have lakhs of crores stashed abroad and in properties, bullions, dollars?
The demonetisation has led to Rs 14 lakh crore–or $217 billion becoming useless overnight and most of it is in circulation among those dependent on cash economy.
There are 15.7 billion notes of Rs 500 and 6.3 billion notes of Rs 1,000 in circulation in India. Thus, 22 billion notes in the country is junked.
By when you think the govt will be able to fill in the gap by infusing billions on new Rs 500 and Rs 2000 notes?
Even if people go to exchange and deposit (allowed till 30th December) old notes into the banks and post offices, do these institutions have the capacity and infrastructure to cater all of their customers within next 40-45 days?
If the Govt fails to exchange/ accept within this time frame, certainly there would be economic ramifications but ever thought about the impact on the daily life of millions of hardworking Indians?
So in Toto, the middle class – private and govt employees with most of their money in the bank will be unaffected. What part of population is that?
The major black money hoarders largely remain affected due to their money invested in bullion, property, stashed abroad. If they sell either of these after there is enough circulation of the new Rs 2000 notes, it will be rather make it easy for them to handle cash due to the higher denomination.
The middle class, lower middle class, lower income groups, which is the major portion of Indian population, takes a hit for no reason but only because of their honest dependence on the legitimate cash economy.
So basically for the BJP, the black money that was once stashed abroad today has become the cash in hand of the poor and hard working Indians?
This supposed “War on Black Money” is actually the “War on HARD WORKING & HONEST” Indians. Take this shit and question the Govt.
Millions of Indians might lose out on their lifetime savings due to this stupid decision to demonetise old Rs 500 notes with immediate effect.
Thousands other, the REAL black money hoarders will benefit due to introduction of even higher denomination of Rs. 2000 note.
That people in India are already moving to plastic money is your – the arrogant ignorant – & government’s fantasy. Nothing more. India is much more beyond a few thousand people in handful of cities using apps to make payments. THINK beyond yourself!
Now, Govt should show some steel and go after the big black money hoarders – in its own backyard – and spare the hardworking Indians.
Lastly, don’t forget – it was this legitimate cash economy that saved India from the subprime crises of 2008.