India politics thread
- Thread starter Shiva87
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I am not aware of any restriction/ceiling of any kind on spending
So, you do accept that the demonetisation has failed to curb black money and fake currency, don't you? Government told us that the purpose of demonetisation was to curb black money and fake currency. While i was almost sure that the criminals will eventually decode the security features of the new notes, i thought that it will take them at least 2 months. But, surprisingly, fake currencies of new notes are already entered the market. There are many reports regarding the same. I think these criminals are more efficient than our RBI.
As far as the black money is concerned, the total value of banned 500 and 1000 notes which was in circulation on November 8, 2016 was 14 lakh crores. And as per today's CNBC-TV18 report, 11 lakh crore rupees already entered the banking systems till November 30. And we still have around one more month to deposit the invalid currency notes. So, one could easily expect 3 lakh crore more deposit in the remaining 30 days. So, where is the black money? People with black money either exchanged it with new notes or deposited it in the bank through many ways. These stats says volumes about the current governments knowledge and competence level.
So, if you look at the circus which is still running and then look at the stats mentioned above, you could see that the demonetisation almost completely failed to curb black money and fake currency.
Now coming to the second part; while i do agree that now there is more money in the bank, i don't think it is going to help the common man in a big way. And the small benefits are never going to cover the losses caused to the poor and to the economy, and surely it is not going to get back the lives of 80 citizens who dies because of this move. One possible advantage is that the loans might become cheaper. But at the same time, it will take at least 1 year to recover from the economic slow down caused by the demonetisation, and 1 year is an underestimate. Even if everything go smooth from now, it will take at least 6 months for the currencies to be freely available as it was prior to November 8. And by that time, a lot of small and medium businesses which are already struggling, might be forced to close. A lot of farmers and the agriculture itself, might face a similar fate.
And there is another big advantage of banks having more money. Banks could write off more loans, but this will only help the corporates
And if you are looking at the plastic money angle, i had mentioned my view on it before. The concept of cashless economy and plastic currency are all good to hear and will make life easier for those who are ready for that change. But we should think about it from an Indian perspective. And the fact is that, in India, there still have a good percentage of population, say around 30%, who doesn't hold a simple savings account. More than 30% of Indian population are illiterate. Many are not even aware of these changes and demonetisation. And forget about internet facilities, many villages are yet to have continuous power supply. Many families don't have a computer or internet in their home. Only 300 million people in India uses a smartphone out of the 1300 million population. And most importantly, the fundamental of Indian economy is still agriculture and 70% of money transactions in India are made by cash payments.
Yes, you can talk big and dream for a cashless economy. But looking at the above stats, you can understand that India is not ready for a big change like cashless economy.
And another concern about cashless economy is that, the people and the economy are going to be 100% dependent on the banking systems. Before November 8, even if the banking systems fails or collapses, Indian economy won't collapse like what happened in Greece, because Indian economy prior to November 8 was not fully dependent on banking systems. But a complete dependence on banking system will make Indian economy more vulnerable to external factors and international financial situation. So, in my point of view, a balance between cashless and cash economy is the best option for a country like India as long as it is dependent on it's agriculture and the illiterate workforce.
I am not against e-payments and plastic currency concepts. But i think India is not ready for that big change and it will take years to implement such a system here. The government should make sure the availability of power and internet all over India at cheap cost before implementing this concept.
We should disassociate fact from opinion.
Its my opinion that from the supply side, the RBI believes that 14 Lakh crore worth of Rs. 500 and Rs 1000 were in the economy. I'm going to go on a whim and state that the RBI has undervalued the worth in the economy and the number in the system would be higher than the aforementioned value, in paystrt account of the shadow economy and some portion of the shadow economy coming into the system.
It can also be noted that there are some sectors where unaccounted money plays a major role has seen a downturn. When you say economic slowdown, my understanding is that you're talking about the reduced demand on account lesser purchasing power. However, my point on that being that the demand accrued would've been due to purchasing power lent by money that didn't figure in the system. Therefore the repercussions to the macro-economy as such should be minimal. Whether that's true or not we shall see in the near future, when the reports come out.
I'm sorry, but your understanding of the Greek crisis seems a little under-prepared. The structural issues involved in the Greek system were accentuated by the Eurozone and through unregulated government debt. Having a cashless economy (which I don't think it had) neither helped or ruined its case.
I for one, would be interested if we were to decrease the cash flow in the system. Raguram Rajan's plan during his period was exactly that. By keeping interest rates high, we decreased the cash flow in the system and therefore controlled inflation. Now if the government has accelerated that process by increasing the amount of cash in the system as opposed to outside, we're all the better for it. Theoretically prices of commodities should go down
Whilst I'm not a believer of trickle down economics, its alarming that the discourse these days is anti-corporate rather than finding a way to regulate the capital expenditure based on public money. But I digress.
Coming back to the agriculture point. Yes we're an agrarian economy, yes they are predominantly illiterate. But this does not mean that the group as a whole cannot operate an account. The Direct Cash Transfer, the Banking for everyone scheme over the last two years has made improvements, significant ones even.
Demonetization wasn't a much needed step and it isn't going to do much to the Black money (though it will and infact already has some positive impact). But what it has lead to, is an accelerated streamlining of the free-cash floating in the system and that would have significant benefits.
My heart goes out to the 80 people and their near and dear ones who lost their lives. But linking their deaths primarily to demonetization is politicizing what is a tragic loss.
Hello, my friend. Long time indeed. Haven't been on here much since I left for my post-grad
Take your nonsense claims somewhere else. Banks are working overtime to make sure enough cash can be provided. PSU banks are working through the weekend and most days till 11pm to tend to the customers. Like I said earlier, the tragedy here is that most of us are patient instead of creating hysteria by spouting incoherent gibberish.
Yet, I am not allowed to believe and go by the word of my 2 white/american colleagues.
Mate, im busy right now. So, i can't reply in details.
However, i will reply to one point which i think you misunderstood me,
I am not sure, but i think no where in my post, i mentioned that Greece collapse was due to cashless economy. And if i did mention such a claim anywhere in my post, it's a mistake.
My point was that, prior to Noveber 8, even if Indian banks collapses just like what happened in Greece (banks had no money and so do people), still Indian economy and Indian citizens won't be struggling as bad as Greece did. And i already mentioned my reasoning to that in the original post.
It's nice to have this kind of open dialogue, i will try to reply you in details. tk
However, i will reply to one point which i think you misunderstood me,
I am not sure, but i think no where in my post, i mentioned that Greece collapse was due to cashless economy. And if i did mention such a claim anywhere in my post, it's a mistake.
My point was that, prior to Noveber 8, even if Indian banks collapses just like what happened in Greece (banks had no money and so do people), still Indian economy and Indian citizens won't be struggling as bad as Greece did. And i already mentioned my reasoning to that in the original post.
It's nice to have this kind of open dialogue, i will try to reply you in details. tk
Its become the norm these days that inciting passion through rhetoric, even if it is based on falsehood, is political discourse. Trump being the international example.
Yet, I am not allowed to believe and go by the word of my 2 white/american colleagues.
Insignificant sample size. On both accounts. This is a reason why a free and fair media is paramount to a society. Instead we get shouting matches which are useful only for individuals looking for evidence to perpetuate their views.
Not saying that you're wrong in believing your colleagues. But having your american colleagues as a source, I don't think, would provide a balanced view.
This is not correct at all. If Indian banks collapse, the value of rupee will sink really fast and even those with cash will suffer as much as those with bank accounts. RBI will always ensure that someone's bank balance is honored despite bank's own financial health so having cash or money in bank accounts make no difference. Your reasoning has little to no understanding of basic economics.
It is overblown as many people in the queue are there for the novelty factor of the new currency and no real requirement for cash. Many of my family members have done this too. Considering a city like Chennai having 4+m population...even if a few % of people do it, it still is a staggering amount of time added to the queues. As I said I can understand the trouble in non or under banked rural areas, but in major cities, people should just move to getting DDs or using their cards more. Half the trouble is actual demonetization and half is just self inflicted.
Again you are stating nothing that is specific to Modi government...excepting that they are more efficient in advertising themselves. I can accept if you think demonetization is not as effective as claimed...but them everyone has their own opinion. Imo, India never had a constructive opposition party, irrespective.
As to your last sentence, Congress inability to do a good job opposing demonetization is blamed on Modi now too? Seriously?
Yet, I am not allowed to believe and go by the word of my 2 white/american colleagues.
It was the fact that it takes so little to embarrass you was funny. You have no friends back home to get some info rather than depend on the experience of 2 foreigners only? Again, at no point has anyone disagreed with the the mistakes in implementation. But this thread now has veered towards the government having corrupt agendas and lying to the public.If you are making such accusations, you should have some sort of proof than relying on stupid articles and media that is anyway hell bent on showing anything the government in bad light.
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You compare it to what happened in Greece and you will understand. And again, i am not talking about the causes of Greece financial collapse. I am talking about what happened in Greece after the banking system failed and then comparing it in the Indian context prior to November 8.
If you want we can talk about it in detail. But not now, may be tomorrow. I am really busy now.
There is no compairson to be made to Greece. I actually explained this ina post earlier so I will quote that again..
You are confusing the fact that Indian's parallel cash economy has been one of the reason's behind our growth and limited impact from global financial troubles with the wrong notion of cash economy being entirely insulated from the Indian banking system. Both systems still run on the same currency so they will always be equally affected no matter the event.
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As to your last sentence, Congress inability to do a good job opposing demonetization is blamed on Modi now too? Seriously?
My last sentence was blaming Congress saying that they are not effective in spreading their message and in reaching out to the people and BJP excel in that aspect.
I will wait for you to have some free time and respond to @crappycraperson 's point about the comparisons between Greece and India.
It's absurd to consider a banking collapse as a standalone disregarding the economic collapse that triggers it. In simple terms, Greece is in it's current predicament due to overspending. They were underreporting their deficit numbers from before and when the 2008 crisis happened, it brought things to a head.
There was (ands till is) a big fear that Greece will pull out of EU (which automatically converts all EUR holdings into equivalent Drachmas), so there was a massive withdrawal/conversion of deposits and holdings in all banks as people wanted to hold on to Euro's. This skews the bank's loan-to-deposit ratio's and reduces the amount of liquidity in the market. Bank's simply don't have the cash to give, irrespective of whether it's a loan and just a return of deposit.
None of those will apply to India. It is a growing economy which is controlled internally by RBI, retains controls over currency valuations domestically and overall a more insulated from global macro economic changes. A forthwith collapse of Indian economy or banks in India running out of money are just wildcard theories (currently) which should be considered at par with alien invasions and Godzilla attacks.
There was (ands till is) a big fear that Greece will pull out of EU (which automatically converts all EUR holdings into equivalent Drachmas), so there was a massive withdrawal/conversion of deposits and holdings in all banks as people wanted to hold on to Euro's. This skews the bank's loan-to-deposit ratio's and reduces the amount of liquidity in the market. Bank's simply don't have the cash to give, irrespective of whether it's a loan and just a return of deposit.
None of those will apply to India. It is a growing economy which is controlled internally by RBI, retains controls over currency valuations domestically and overall a more insulated from global macro economic changes. A forthwith collapse of Indian economy or banks in India running out of money are just wildcard theories (currently) which should be considered at par with alien invasions and Godzilla attacks.
I thought people living in metro cities don't count since they have other means to transact, while cases of poor people were termed as collateral damage, rare case or just plain "inconvenience for the greater good".
You can't play your chosen game and then shift the goal posts per your convenience.
I am sorry, what is your point? You are again going in circles. People have faced difficulties, but this has been overblown. The poorest of the poor would have faced even more difficulties, that's why the pmjdy was setup last year so that the poorest of the poor will get in to banking with zero balance accounts. You do not need to be completely literate to operate a bank account. People with unaccounted cash were given time till Sept of this year to come forward. Now this step to erase the old notes.
Let me put forth this question, why was this jan dhan yojna required anyway? Why after more than 65 years of Independence do the poor not have bank accounts? Why are there still so many illiterate? What did the governments do post independence? We are a work in progress and a developing country since Independence but our base itself is weak, we need to be taught to be clean in public, not everyone has toilets. When you try to understand the amount of work that needs to go in to clean up this country, you might stop getting embarrassed in front of your American friends.
You had the stupid media coming up with all these rich people cribbing about how their maids and drivers had so many issues, could they not have educated their maids on opening and using bank accounts? Could they not have helped them with money? All bogus outage and panic created to create news.
If you think the idea of this step itself is stupid, then you are more intelligent than the economists that the government has. If you think that this step is good but the government is corrupt, then we can agree to disagree and move on.
2 slightly contradictory videos, but the fairly widespread support is visible.
http://vidshare.indianexpress.com/previews/qxBsTB0w-xe0BVfqu
http://vidshare.indianexpress.com/previews/qxBsTB0w-xe0BVfqu
Take your nonsense claims elsewhere. Banks have no cash to give to any people and are asking people to come only if they want to deposit cash.
On good days they are able to give only 3K or 4K per person even by cheque.
PS: While my claims are not true about every branch in the country, neither are yours.
Who is going to say "I do not support" on video or otherwise once they have bought the "This is for the greater good of nation" argument.
Even the ones criticizing things on ground are talking about horrible implementation and blatant lies that people in govt are putting out. Not necessarily the move as such.
Yes, and this is a masterstroke.
Perhaps alongside Indira Gandhi, or maybe above her; Modi is the best politician of independent India. Till 2014 I knew he was effective, but I didn't realise how good till this move, which has increased support for him at a time when job growth is the lowest in a decade.
You can watch this video as well
When covering such a large population, there will be queues. But people have cooperated tremendously. You don't find a social unrest in the country: Arun Jaitley
So people stand in line because they have no choice. Govt says "Look!!! They are willingly standing in support of us"
People are decent and do not riot or beat up bank staff or managers. Govt says "Look!! They are not rioting. So they are in full support"
***Slow claps***
So people stand in line because they have no choice. Govt says "Look!!! They are willingly standing in support of us"
People are decent and do not riot or beat up bank staff or managers. Govt says "Look!! They are not rioting. So they are in full support"
***Slow claps***
I think there is an element of truth in what Jaitely is saying. The fact this has gone down so peacefully suggests that people on the whole, so far, are ok with it. Modi's played it quite well by making this whole thing about national sacrifice when, partly thanks to his government, nationalism is the dominant emotion of our times.
While you will always have the right wingers, with tongues permanently affixed to Modi's arse, refusing to acknowledge the clusterfeck this policy has been, some of the left liberal are being dangerously tribal about this as well. Because despite the clusterfeck, I don't think the masses are too unhappy about this.
Yet the liberals, who are probably affected the least, continue to insist this has been terrible for the poor. We may think it's bad for them but if they're good with it - then who are we speak for them. I think this is part of a worrying global phenomenon where the liberals patronizingly think they know what's best for everyone - when in reality they have no clue and end up alienating themselves.
While you will always have the right wingers, with tongues permanently affixed to Modi's arse, refusing to acknowledge the clusterfeck this policy has been, some of the left liberal are being dangerously tribal about this as well. Because despite the clusterfeck, I don't think the masses are too unhappy about this.
Yet the liberals, who are probably affected the least, continue to insist this has been terrible for the poor. We may think it's bad for them but if they're good with it - then who are we speak for them. I think this is part of a worrying global phenomenon where the liberals patronizingly think they know what's best for everyone - when in reality they have no clue and end up alienating themselves.
The way he has brainwashed people is incredible. He's a good orator and knows how to milk the situation well. Born to play.
The crap opposition hasn't helped obviously. You don't need much to convince people against retards like Gandhi and Kejriwal.
Absolutely spot on.
Doesn't live in India; but knows the entire situation of the banks in India. Good guy entropy.
This is true. Something as big as this has been carried out without much violence and disturbance, especially in a country like India. Has to be appreciated. In comparision, the water sharing issue led to insane violence in Bangalore and TN. Jaitley is correct. People have to be commended for getting through this.
This part is not really based on reality. The financial system and history of post-independence India is a fairly elaborate one and can't be brushed in a stroke of statement like that. If you go to era of nationalization of banks (which I am not saying is a good thing), the coverage of banks in rural areas was far more widespread than it is now. State banks were required to provide rural coverage and open certain percentage of their branches on rural areas (I have forgotten the exact amount but I can give you the documents if you so require). The banking coverage in rural India was highest till mid-80s after which liberalization policies were enacted upon where after coverage steadily declined. I can go on about how the current JDY might not be the best way to incorporate rural savings into the financial system but a matter of another discussion.
The analogy is a bit illogical IMO. We have politicians who engage themselves in large scale corruption, indulge in murders and rapes. But the general public hardly make a sound about it. That can't be used to argue that most of the population endorse the corruption, murders and rapes.
We have a really high level of tolerance. We are really good at finding workaround for every problem affecting us.
I am facing several issues when banks puts no cash/limited cash board on a daily basis or it is a 1-2 hrs wasted trying to get money out of the nearest ATM. But it is not a life threatening situation for me. I have ways to adjust.
But that does not really mean I am happy with situation or the way govt has handled the whole thing. Yes, I am not rioting. I am not abusing the govt in the ways some other politicians are doing it. But it is hardly an endorsement. I am more resigned to the fact that "This is the way things are run in the country and there is not pretty much anything major I could do about it"
But isn't that the whole point of having a discussion in the policy sphere? Academia's sole purpose is to discuss/debate/challenge policies because people are not informed well enough to do so? I definitely agree that patronizing others is not the way to go about it, but worrying global phenomenon for me is the fact that how people can easily brush aside opinions of experts who've worked on their field of research for years. Post-truth as they call it.
Completely different scenario. For starters, most of the violence was politically motivated. Fortunately, the opposition do not view demonitisation as something worth rioting upon. Secondly, water is a life threatening topic. People will be very less patient with this.
The murder/rape analogy is flawed because there's only one victim there which makes apathy slightly understandable. Here the entire nation has been affected so you'd think there'd be greater push-back.
And while, I agree our ability to adjust or, more crudely put up with shite, is unparalleled, there's more to that here where I see genuine willingness to make the 'sacrifice' for the greater good.
This is true but here the point in contention is if the poor are suffering - academia's role is not to decide that for them.
That is what I had mentioned in the other post. If one has bought the "greater good" logic, then obviously one will be ready to sacrifice, regardless of whether the move is actually making a major dent in the black money market or whether the sacrifice is worth the actual results.
My bigger point was that, though the situation is bad and I am facing hardships, it is not life threatening. So I will try to find ways to jugaad rather than rioting.
Me not rioting, cannot be taken as proof of my willingness or support for the flawed implementation.
Didi gone mental. Kejriwal level of insanity.
Agreed the lack of rioting shouldn't be seen as a sign of support but there are plenty of signs elsewhere to suggest that this is a pretty popular. For instance, my flatmate's a journalist and just returned from a field trip to UP. He said people there overwhelmingly support the move despite significant personal hardship.
I agree that there are many people supportive of the move, for whatever reasons justifiable to themselves. I was only commenting on Arun Jaitley's logic of public support.
Quite right.