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'Modi has gone completely wrong on demonetisation'

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prasad1

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P Chengal Reddy, secretary general, Consortium of Indian Farmers Association, recently wrote to Prime Minister Narendra Modi highlighting the adverse impact that the Bharatiya Janata Party government's demonetisation policy has had on the agriculture sector.
Reddy tells Rediff.com's Syed Firdaus Ashraf why he sent Modi an SOS from farmers.
You told Prime Minister Modi that the cashless concept is turning out to be as difficult as creating a caste-less society in India. What do you mean by that?
As my guru (the late Shetkari Sanghatna founder) Sharad Joshi said the country is virtually divided into India and Bharat. The division is evident even now when Modi speaks about so many things.
90% of farmers are dependent on food, vegetables, diary, goats and fish.
Now, who are these people? They are small farmers; they are women and family labour. They own hardly half an acre or small plots where they grow vegetables.
They sell their produce and earn money (in cash).
The same is the case with small fishermen who are a century behind compared to the rest of Indian society.
But demonetisation will bring these farmers and fishermen into the banking system...
When there are no schools and hospitals in villages, how do you expect banks to reach such places?
How will banks reach the deserts of Rajasthan or the tribal areas of Chhattisgarh, Telangana, Madhya Pradesh, Jharkhand and the North-East?
What people in villages want is education for their children, health facilities, and these things are not available in many villages.
Modi or even (Congress President) Sonia Gandhi never went to a farm and did farming.
Agriculture is not a cultural activity.
Look at Denmark and Israel. They are booming (in agriculture) because of four fundamental things -- technology, investment, markets and management of agriculture by the best people.
Today, agriculture is an enterprise.
When India claims to be achieving 8% to 10% growth consistently in the service industry after 26 years of liberalisation, why is the farm sector struggling day and night to grow by 1%? They have no answers.
The problem is that the politicians and bureaucrats in Delhi are not exposed to agriculture.
Do you feel the Modi government is city-centric and does not understand the problems faced by India's villages?
It is not just about Modi or Sonia Gandhi or Rahul Gandhi. The moment they occupy the chair they are surrounded by bureaucrats, industrialists and so-called city-based experts who join the coterie.
Look at the Prime Minister's Office. It has the same IAS officers for the last 20 years. How will they change their mindset just because Modi has become prime minister?
Modi looks to be very smart, but he is not. He has clarity (only) on Pakistan and foreign affairs.
You also mentioned in your letter to PM Modi that the Kharif crop is sold immediately after the harvest to repay borrowings and reinvest in the Rabi crop.
Both are not likely to happen after demonetisation.
Will this lead to a food shortage?
http://www.rediff.com/business/inte...mpletely-wrong-on-demonetisation/20161213.htm
 
This is my assessment. I am not an economist or scientist, but a social worker. I call this common sense.
Today, even if farmers have got their harvest there are no buyers.
Earlier, there used to be an informal sector that used to buy (the harvest), but today everything has stalled at every point.
Why are there no buyers? Is it because there is a shortage of cash or lack of demand from consumers?
To an extent currency yes, but more than that Modi is trying to operate this entire system through banking.
Legally speaking, it is good, but you should have done this over a period of 5 to 10 years.
In a village, people used to lend money or take loans from each other; that was the system. It was an unaccounted system.
Now, Modi, through demonetisation, wants to channelise this through the banking system and bring in an accounting system.
The moment an accounting system comes in, everything follows like sales tax, income tax, rules and regulations.
The first reaction is that of shock.
Everybody is scared and they have run away. They are not visible.
They have not come to purchase my wheat and rice, and I am not sure when I am going to get them back.
Have the traders run away?
Yes, you call them traders or middlemen. They are not coming to the farmers to purchase wheat and rice.
And I am not sure when I am going to get them.
At least 86% of our farmers are small and marginal. These farmers have less than two acres of land. They have no education.
Can't the farmers go to government mandis (markets) and sell their produce?
You are very right. In 1996, I was one of the members who worked vigorously on marketing reforms (from the government side). Where are we now?
Market reforms have not come. It is the middlemen who have the monopoly.
It is the government which needs to be efficient. I am not supporting or opposing anybody.
I am only telling Modi that these are not practical things; you have to do this a little slowly.
The very concept of Modi has gone wrong because black money control does not mean demonetisation.
Modi has gone completely wrong on demonetisation.
Black money is generated through corruption and tax evasion.
Instead of controlling that, he took the other way.
Now, tell me how many people with Swiss bank accounts or those named in the Panama Papers were caught?
How many corrupt people were caught in the last two-and-a-half years of Modi's rule?
Since you say the traders have run away, are there not enough government mandis where farmers can sell their produce?
There are government mandis, but they have been taken over by commission agents.
There are some officers who are supposed to supervise the transactions, but 90% of them do not do anything.
They are corrupt, they exploit and cheat.
How many government mandis are there in India?
There are 7,000 to 8,000 government mandis.
So has agricultural activity completely stopped in all these mandis?
Never use the word, completely stopped. It is slow and steady deterioration.
In Hyderabad, 28 trucks of pomegranates used to arrive in a week. Now that has reduced to 5 trucks.
Now you have to understand that 28 trucks of pomegranates were consumed by 'X' number of people and 'Y' number of people used to produce that much quantity.
So why is there a fall in the number of trucks? There is nobody to purchase pomegranates.
Instead of harvesting pomegranates worth 28 truckloads, farmers are harvesting only 5 truckloads.
This is happening because there is nobody to purchase the pomegranates.
The same is happening for every food item, especially perishable food.
But there is no outrage among the farmers.
In the last 70 years, have you ever seen farmers revolting in India?
They do not because they are the living-dead people.
Farmers are like living corpses in India. There is no life for them in India.
So will there be a food shortage in the future?
The production of onion, tomato and other crops is slowly reducing because there are no buyers.
If you look at this (demonetisation) from the farmer's point of view, he feels that his income has reduced and there is a cash shortage.
So he will invest less and produce less.
These rascals in Delhi are not duffers; they have already announced that there will be zero tax if you import wheat.
The whole problem is that they are not interested in sustaining agriculture or safeguarding the interest of the farmers.
They are manipulating things, but not solving things for farmers. That is a big problem.
You told PM Modi that his government does not understand the fundamentals of agriculture.
Certainly! The Modi government does not understand agriculture.
If they did, they would have not made someone like Radha Mohan Singh agriculture minister.
He does not understand anything about agriculture.
Cooperative banks were not allowed to function post demonetisation. How do you view that move?
It was a wrong move. The Modi government felt that cooperative banks are not trustworthy. That is absolutely nonsense.
Farmers in villages depend more on cooperative banks than nationalised banks.
Today, there is no money in the cooperative banks. The government is not pumping any money into them.
I thought one could withdraw Rs 2,000 from cooperative banks.
If I am hungry and go to the temple for food, I don't need prasad. I want a full meal.
http://www.rediff.com/business/inte...mpletely-wrong-on-demonetisation/20161213.htm
 



May be for few leaders, it is Party and its winning election comes first and for the other it is nation and its war against Black Money, Corruption, Counterfeiting, etc comes first…..


Modi Is Right. Wanchoo Committee Recommended Demonetisation To Indira. She Refused. Here’s Why

Excerpts:

PM Modi is right.

In 1971, the Wanchoo Committee had submitted an interim report in which it had recommended, among other reforms, the demonetisation of high-value currency notes. Y B Chavan was then finance minister. Retired civil servant, Madhav Godbole, in his book Unfinished Innings: Recollections and Reflections of a Civil Servant book tells us that after many deliberations over the matter, demonetisation was accepted along with other reforms suggested by the committee.

However, “in view of the sensitive nature of the subject and the need for maintaining utmost secrecy”, the prime minister’s approval was needed. So Chavan went to meet Indira. And this is what he told Godbole about his meeting with Indira on the issue.

Source: http://swarajyamag.com/insta/modi-i...emonetisation-to-indira-she-refused-heres-why
 
#Notebandi Frontlines: Flower harvest income falls 70%; A year lost for this farmer

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Mirjapur and Indore (Madhya Pradesh): As the sun rose in the morning sky, piles of white chrysanthemums awaited Keshu Singh Patel at his 2.5-acre farm in Mirjapur, a village in western Madhya Pradesh. Everyday in the winter, the short, spry, balding 55-year-old takes about 70 kg of flowers, tied to his bike, to sell in the flower market 15 km away.

"I don't know if I will recover the cost of growing chrysanthemums this season," Patel said.Over the harvesting season from October to January, Patel's income has fallen by 70%. "Four days before and even after notebandi (demonetisation), I was selling sevanti (chrysanthemums) flowers between Rs 30 and Rs 40 a kg; now they sell between Rs 4 and Rs 6 a kg," he told IndiaSpend.

Patel is one of 118.6 million Indian farmers, as the Census recorded in 2011–equivalent to the population of the Philippines. As many as 9.8 million farmers live and work in Madhya Pradesh, one of India's poorest states. Patel is a "small farmer", as he has about 2.5 acres of land, less than the average land held by an Indian farmer (2.84 acres), according to the agricultural census of 2010-11.

At midnight on November 8, 2016, Rs 14 lakh crore–or 86% by value of Indian currency in circulation–became defunct after Prime Minister Narendra Modi announced that Rs 500 and Rs 1,000 notes would no longer be considered legal tender. The largest impact appears to be on the informal economy, which employs 82% of India's 500-million-strong workforce and generates half of India's gross domestic product (GDP). Businesses ranging from tourism, retail and infrastructure are also adversely affected, according to the this December 7, 2016, story in LiveMint.

The government has pushed for digital payments to counter the lack of notes in the economy, but challenges of cell phone connectivity and low Internet usage, especially in rural areas–where less than 15% use the Internet–abound, as IndiaSpend reported on December 10, 2016. Many farmers said they did not know how to use the Internet for banking or had too little in their bank accounts to use for everyday transactions.

To grow chrysanthemums on one bigha–about 0.4 acres of land–cost Patel Rs 3,000 in seeds, Rs 15,000 in fertiliser and pesticides, and Rs 7,800 for labour, over three months. About 0.4 acres of land should produce 10-12 quintals of flowers. Patel's family–his wife, son, daughter and daughter-in-law–work from 9 am to 6 pm on the farm.

If the crop is good, and flowers sell well during the wedding season–November 15 to December 15–Patel could have made about 2,600 a day. On, December 7, 2016, when IndiaSpend followed Patel, he earned Rs 543. The plant is sowed before the monsoon and flowers between October and January.

Over the season, the Patel family would have earned Rs 100,000, a profit more than Rs 74,000. This year, they've earned about Rs 30,000, a profit of Rs 4,000 or 94.5% lower. In the month after notes were banned, he earned only Rs 7,000.

Patel is forced to sell at a lower rate because flowers wither fast, and their rate reduces with time. "I had to throw 35 kg of flowers because there were no buyers yesterday," he said.

Patel reached the bustling flower market in Indore–considered Madhya Pradesh's commercial capital–by 7 am. He entered the flower-strewn arena–there are 51 license shops in this government market–on his motorcycle laden with flowers tied in makeshift bags of bright yellow, green and red cloth.

Keshu Singh Patel and his son, Kantilal, fill flowers into make-shift cloth bags at his farm in Mirjapur, Madhya Pradesh. The flowers sold at lower prices because of demonetisation.In the market, because of a lack of notes, other farmers have lost between 50% and 80% of their income in the last 25 days.Anil Dawli, 39, sells potatoes, chana (chickpeas), methi (fenugreek) and eggplant in the market. He said he had been earning between Rs 80 and Rs 100 a day, compared to Rs 500 to Rs 1,000 a day before the scrapping of Rs 500 and Rs 1,000 notes.

"Methi is selling for Rs 2 to Rs 5 a kg, down from Rs 10 a kg," he said, sitting in the midst of heaps of green leaves. He had no choice but to sell, as the leaves would soon rot.

"My guldavri (local name for chrysanthemums) sold for Rs 7 a kg. This is the season of weddings. It should have sold for at least Rs 35 to Rs 40 a kg," said 36-year-old Mukesh Mukatil, who had brought about 90 kg of flowers to the market.

Bundles of locally-grown red gladiola flowers were selling for half the price, down from Rs 225 for 10 sticks to Rs 120, farmers said.

Around 12:30 pm, Patel returned to the farm, as three labourers were cutting down the stalks of the chrysanthemums planted on about 0.2 acres of his farm. His family spent the day plucking flowers off the other plants so Patel would have enough to sell the next day.

Of his 2.5 acres, about a fourth of an acre lies fallow, as their isn't enough water for the crops.

After selling one crop of flowers, Patel would have waited for the plants to regrow and sold another batch. "But because prices are low, it is more expensive to maintain the plants," Patel explained. In a regular year, the plants would have been cut in the end of January or February.

"To add to it, there is a higher quantity of flowers coming into the market which has reduced prices further," said Sharad Kusumakar, 61, who owns a shop in the flower market.

When IndiaSpend spoke to Patel's son, Kantilal, on December 13, 2016, he said the market had picked up a little, with chrysanthemums selling between Rs 10 and Rs 20 a kg. "But we've already cut down the stalks," he said, adding that the recovery of prices wouldn't benefit them.

Patel and his family moved above the rural poverty line of Rs 816 per person per month some years ago, and so can't access the lower-priced wheat, rice, sugar and oil, families below the poverty line receive from the government's public distribution system.

Fortunately for Patel, he is well known in the village and the flower market. The local village shop is willing to give him oil, sugar and even seeds on credit, and the shop owner in the flower market is willing to give an advance payment for the flowers that will sell, Patel said.

Since demonetisation, the government has been pushing digital payments but most transactions still take place in cash.Most farmers and traders IndiaSpend spoke to had bank accounts, but used cash. They said they either had too little money to put in a bank account or did not use debit or credit cards regularly. All transactions Patel made during the day were in cash: He filled petrol worth Rs 50 in his motorcycle in the morning, and bought a dozen bananas for Rs 40 in the afternoon.

Before depositing Rs 500 and Rs 1,000 notes after notebandi, I had used my bank account about two years ago," Patel said, as his two-year-old granddaughter played in the field. His son, Kantilal, has an ATM card, but used it only once in 5-6 months to withdraw cash, as he had little money in his bank account. The nearest ATM and their bank branch is a 15-minute ride from their village.

The family has one basic cell phone they use to call relatives. Though Kantilal has used the Internet in the past, neither father nor son currently has access to the Internet as a smartphone was too expensive to afford.

For four months last year, the family used a Samsung smartphone, which they bought for Rs 8,000. "But someone stole the phone," Kantilal said. He had used Internet on the phone only to access Facebook, he said, adding that they wouldn't buy a new phone because it was too expensive–equivalent to almost all of their profit this season.

Patel's family spends about Rs 1,500 to Rs 2,000 on household items every month.

Not everyone has a bank account. Jagganath Mahadeo Bhuyyer, 66, a trader in the market, said he had no plans to open a bank account. "I earn enough to eat twice a day, what's the point of all this jhamela (rigmarole)," he said, when asked why he doesn't have a bank account. "If I had a bigger business, I would have opened an account."

For Patel, low flower prices mean he has to dip into his savings to pay Rs 130 a day to two labourers who help his family pluck flowers."We always face problems of water and electricity shortage," said Patel "This year notebandi has spoiled the year for us."

Read more at: http://www.sify.com/finance/noteban...farmer-news-demonetisation-qmsse9gfhbiab.html


Of Course Modiji could not foreseen all this destruction. His chumchas did not anticipate it or were too scared to alert him. If the RBI chief was strong and independent it would not happened. But he was pushed out to bring in a henchman to say "yes Sir".
 
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I am neither a die hard fan of Modi nor a die hard Critic of him but the reality is that this demonetization is a reality and we have to live with it whether we like it or not and any amount of posting for , against comments on this issue is of little help . We need to find ways how we can help tide ourselves as well as others this currency crisis during the next 6 months which is going to be very tough for all of us . We also do not know whether this will be beneficial for us in the long run . So let us find means to tide over this unpleasant reality and help others also to do so the best they can . When TN Seshan introduced Photo Voter ID Cards there was a very big protest as to how can this be implemented in rural areas especially in BAckward states like Bihar ,UP etc but then Voter ID has become a reality . There was a big protest when Aadhar Card came ( the BJP too joined in the protest ) but Aadhar has become a reality and you hardly find anyone without an Adhar Card and now everyone has a mobile , aadhar card and so the next best thing is for them to get a bank account opened and start using it digitally . It will take some time but soon it will become a reality . The Government must give the job of helping and educating the masses in this matter to all Collage Students and each student must take 5 people as his / her responsibility to educate and help people in this matter . This duty must be made part of their daily Collage Schedule and with the help of lakhs of Collage students this transition can be done relatively smoothly . This is one suggestion from me .
 
hi

we like it or not....ONLY HISTORY WILL TELL......ROME IS NOT BUILT ON ONE DAY.....EVERY HISTORY HAS PROS AND CONS....

FINALLY....இதுவும் கடந்து போகும்....
 
hi

the indian one rupee is equal to one dollar in 1947...is it today same value of one ruppee?....so comparison with america

with india ...never possible....

Sir,

India attained freedom in 1947 but U.S.A. got it in 1776 (240 years ago). It is not about comparison but about the precedent....its application and its feasibility, etc etc :-)
 
Demonitisation is not a "thoughtless" process and if one analyse the way the government moved towards this clearly show it is a well planned and getting executed with precision. Over the past year or so, the government reworked various laws including Aadhar delivery act, benami transaction, project digital india, agrimart revamp, IDS etc. etc... ATMs are a new phenomenon to dispense "cash" at convenient location & time hence line up outside cannot be seen as a "failure of the scheme". To some extent, Arun Jaitley as a MOF, is a misfit in scheme of things - if not "inefficient", Jaitley is "incapable". Secondly, the banks in India were operating in a COOL ZONE all through & a sudden "jolt", surely will take some time to "get back". Personally, the scheme is surely for the benefit of nation a a whole and many events will unfold after January - may be a drop in income tax, abolition of stamp duty, oil prices crashing down, loans becoming cheaper, a spurt in real estate projects - and a "GAINED" currency...
 
Before you solve the problem, is like putting the cart before the horse, it is backwards.
This is exactly the problem of demonetisation. Yes it was a noble idea, yes it was a shock treatment. But it was not well thought out. The un intended effects are the one that is now being brought to light. Yes it can not be reversed. But still we have to know the full extend of the damage. Emergency and Marshal law had good effects but the damage to the individual liberty was enormous.

It is like chemotherapy is good for a cancer patient, but for a healthy patient it has devastating consequences. The cure should not be severe on the body than the disease itself.

Some of us just want to forget the effects on rural India and ignore them (as usual). But reality still bites. When you see mounting evidence of an action, there has to be a solution found. Ignoring is not an option.
 
Conventional Trusting Wisdom says Note Recall was an exercise to root out black money, but its good intention was waylaid by poor execution that has led to large-scale distress of the kind that natural calamities usually bring. Conventional Sceptical Wisdom says Note Recall was an effort by the ruling party to take opposition parties by surprise and starve them of cash just as they were preparing for elections in five states, especially Uttar Pradesh.
Commentators on both sides agree that there has been ‘poor execution’ – “monumental mismanagement”, as former Prime Minister Manmohan Singh put it – that has led to destruction of businesses, jobs and lives across the country, no matter what the motive or objective was.
Now the time has come to revisit this consensus because the Finance Minister, the RBI Governor and, indeed, the Prime Minister himself, are asking us to do so. This is what Finance Minister Arun Jaitley said on December 8, in response to the criticism of poor planning: “RBI has been releasing currency as per schedule. The aim of demonetisation has been to move towards digital transactions.” And here is RBI Governor Urijit Patel: “The decision has not been taken in haste but after detailed deliberations… The consequences that have emanated from that were taken on board… That is why the planning, the process and implementation was what it was, keeping in mind high secrecy had to be maintained. The central bank and government were conscious of certain immediate difficulties for the public and all efforts were made to mitigate them”. And here is Prime Minister Modi himself: “I always said the government’s measure will bring a degree of inconvenience but this short-term pain will pave way for long-term gains.”


In short, the very three people who were in charge of taking and/or implementing the decision to ban over 86 per cent of the currency in circulation overnight are telling us clearly and unambiguously that as far as availability of replacement notes is concerned, everything is going as per plan. There has been no bungling and no nasty surprises.
Could they be right?
Could it be that the government planned the entire note recall exercise as part of the move towards digital transactions, as the finance minister said? That the war is on cash itself, not just on black cash? And that the shortage of currency was deliberate and intended to forcibly evict citizens from the cash economy in order to rehabilitate them in the cashless economy? And that the destruction of lives and livelihoods were mere collateral damage in pursuit of a higher objective called the cashless economy?
At first look this seems like a narrative that only a conspiracy theorist could spin and, therefore, something that needs to be rejected outright – because, one would think, what kind of government would do such a thing to its own citizens? But when people in charge of the measure have no difficulty in stating clearly that “consequences were taken on board”, that the “aim has been to move towards digital transactions,” that “short-term pain will give way for long-term gains”, we need to consider the possibility seriously before accepting it or rejecting it. (Former finance minister P. Chidambaram has written in his latest column that the Prime Minister was in the dark about crucial factors such as the time it would take to print replacement notes, but we need to hold judgement on this while seeing where the government’s own argument leads us.)
There is one important reason why we should take the government at its word when it says that the severe currency shortage and the destruction it has caused were not unforeseen consequences, but a planned outcome. It is this: The distinct contrast between the kind of planning that went into moving the country towards digital payments and that which went into ensuring that there was sufficient currency to replace the banned notes. It looks as if, in a relative sense, the ducks were all in a row as far as digital payments were concerned, whereas they were flying helter-skelter as far as delivering replacement notes was concerned.

The question then becomes, was the Note Recall and the mayhem it is causing worth the trouble, for the possibility of higher government revenue? The answer is NO, for two reasons. One, digital payments have been on a rising graph even without any help from the government. Remember that the Rs 35 lakh crore projected volume of digital payments in 2020, up from about a tenth of that today, was made without knowing that there would be a Note Recall. Bear in mind also that Paytm, the leading player in the digital payments business, was valued at $5 billion (about Rs 35,000 crore) in August this year, much before Note Recall was announced – a five-fold jump in valuation in just 18 months from its earlier valuation, according to newspaper reports.

http://indianexpress.com/article/bl...gital-payments-cashless-transactions-4435312/


An honest explanation would be welcome.
 
Fresh guidelines issued by the Reserve Bank of India on Monday on limiting cash deposits of demonetised bank notes have added to the confusion. The central bank issued guidelines where it said that individuals will only be able to deposit demonetised bank notes above ₹5,000 only once till the remainder of the deposit deadline i.e. December 30, 2016.
On the surface, the guideline appears to be one that will hit the remaining black money hoarders in a single blow. However, the government hasn’t been able to plug laundering and cash leaks at banks. Therefore, the common person, who would’ve planned to deposit the money at a later stage, for various reasons like possibly to beat the early queues, would be hit unnecessarily.
Since the time demonetisation was announced, RBI has played a less than stellar role in managing the currency exchange and currency distribution process. Regular guidelines coming at regular intervals put the country in a state of confusion as to what will follow next and the damage control seems to be never-ending.
The guideline does not apply to deposits below ₹5,000, but multiple deposits, if account for an amount over ₹5,000, will also come under the scanner. The bank further said that tenderer will have to deposit the notes in front of two bank officials who will record the individual’s statement as to why he/she was unable to deposit the money till now and only after they are fully satisfied with the explanation, will they deposit the money.
The explanation and the deposit process will be kept on record for an audit trail. On the whole it seems that the bureaucrats in north block are pulling each string rather than the RBI which should ideally be leading the charge to cut through the uncertainty and confusion.
http://indianexpress.com/article/op...f-demonetised-notes-add-to-confusion-4435192/

Why this step? Are they getting anxious lest all the notes in circulation come back so that the "windfall" would not happen? This is really unfair. After having announced that the old notes can be deposited till 30th December, now the Government says that it will not accept them anymore and if I do accept, it will be with a lot of strings. I am afraid that the situation is getting murkier and messier with each passing day.

Too bad Modi went for this unwise step of demonetisation based on the Arthakranti proposals. Those people did not know what they were talking about and now by listening to them, the PM has got everyone into a deep mess. I only hope that all of us will come out of this mess soon.
 
On the day Prime Minister Narendra Modi announced scrapping of Rs 1,000 and Rs 500 notes, Reserve Bank of India had only Rs 4.94 lakh crore in 2,000 rupee notes, which was approximately one-fourth of over Rs 20 lakh crore it had in demonetized currency notes.
An RTI response to Mumbai-based activist Anil Galgali from Reserve Bank of India says on November 8, it had Rs 9.13 lakh crore in 1,000 rupee notes while Rs 11.38 lakh crore in 500 rupee notes.
The RBI says it had 2,473 million pieces of 2,000 rupee notes on November 8 which had a value of over Rs 4.94 lakh crore.
The amount was approximately one-fourth of over Rs 20 lakh crore it had in demonetized currency notes.

Why this miscalculation?
 
On the day Prime Minister Narendra Modi announced scrapping of Rs 1,000 and Rs 500 notes, Reserve Bank of India had only Rs 4.94 lakh crore in 2,000 rupee notes, which was approximately one-fourth of over Rs 20 lakh crore it had in demonetized currency notes.
An RTI response to Mumbai-based activist Anil Galgali from Reserve Bank of India says on November 8, it had Rs 9.13 lakh crore in 1,000 rupee notes while Rs 11.38 lakh crore in 500 rupee notes.
The RBI says it had 2,473 million pieces of 2,000 rupee notes on November 8 which had a value of over Rs 4.94 lakh crore.
The amount was approximately one-fourth of over Rs 20 lakh crore it had in demonetized currency notes.

Why this miscalculation?

How come it is a miscalculation?

If Government had ordered printing all the 20.31 lakh crores all the hawala agents and all the terrorist dons and all the politicians would have smelt the change thqt was coming and would have converted all their 1000 and 500 denominations notes. The step would have ened as a damp squib and copy pasting experts on internet forums would have a hundred posts t make every day making Modi the but of many jokes.

The very nature of the decision was such that it could not brook delay or could not wait for a painless transition.

As long as people have no knowledge of the way the labyrinthine pathways of antinationals, they will come to such simplistic conclusiosn as the one brought here in this quoted post.

The rest three fourth was to be printed and brought into circulation in course of time as quickly as is physically possible. Period.
 
And here is RBI Governor Urijit Patel: “The decision has not been taken in haste but after detailed deliberations… The consequences that have emanated from that were taken on board… That is why the planning, the process and implementation was what it was, keeping in mind high secrecy had to be maintained. The central bank and government were conscious of certain immediate difficulties for the public and all efforts were made to mitigate them”. And here is Prime Minister Modi himself: “I always said the government’s measure will bring a degree of inconvenience but this short-term pain will pave way for long-term gains.”

If the two most important persons who are responsible for taking decision and running the economy of this country said this, I am ready to take this on its face value. The nay sayers may keep harping on their pet theme of Modi's failure, Government's failure and BJP's failure. But the common man understands it better and so he is with the Government. Let us recall that there was a cue to riot from the highest level of legal fraternity, there was predictions of people dying in millions by the great Manmoun singh party and the Shehzada Joker waiting for ever on the side lines for coming to power.

Difficulties were anticipated and steps were taken and are being taken within physical limits. Modi is not God to wave a magic wand and say let there be notes and we will have a shower of notes.

The dreams of naysayers are bound to end as jokes.
 
There is a misconception in the minds if BHakts.
Modi is not India and India is not Modi alone. Modi is the PM and he is incharge of the running the country.
If there are mistakes made, it must be pointed out and if Modiji is an able administrator he can rectify the mistake.

Modi’s Cash Ban May Have Been in Vain as India Outlook Dims.
Prime Minister Narendra Modi needs a new narrative for his banknote ban.

He’d touted the surprise move to scrap high-value bills as India’s biggest step against unaccounted cash, which the government estimated at 5 trillion rupees ($74 billion). The bulk of this money has already been deposited with two more weeks to go before the deadline lapses, meaning the shock to the system may have been in vain.

The decision sucked out 86 percent of currency in circulation, akin to withdrawing all U.S. dollar bills except about half of the $1 notes. Only 50 percent of this is projected to be replaced by the year-end, leaving authorities scrambling to push digital payments as public anger rises.

"India’s ‘own goal’ currency swap initiative has put a crimp on the cash-dependent economy," said Singapore-based Paul Gruenwald, chief economist for Asia-Pacific at S&P Global. The government’s "well-intentioned but poorly thought through demonetization program" is driving down the pace of economic activity, he said.
Finance Minister Arun Jaitley on Friday said there’s no official estimation of black money, the local term for unaccounted wealth. He submitted a written reply to a lawmaker’s question about a month after the government’s lawyer told the Supreme Court that Indians won’t deposit about 4 trillion rupees to 5 trillion rupees of bank notes of the 15.4 trillion rupees invalidated by Modi’s move, implying that this was ‘black.’ The top court was hearing petitions questioning the rationale behind Modi’s decision after Modi in his Nov. 8 speech to the nation said "the specter of corruption and black money has grown," without providing figures.

So far, about 13 trillion rupees of bills have been deposited in banks. The central bank on Monday tightened deposit rules, adding to a list of regulatory flip flops since Nov. 8.

As investors try to assess the impact of Modi’s move, all eyes will be on the government’s forecast for the year through March -- due Jan. 7. The central bank and private economists have lowered their projections for the economy where 98 percent of consumer payments are made in cash.

The Nikkei purchasing managers’ index signals a contraction in the key services sector, which accounts for about 60 percent of gross domestic product. Car purchases, a main indicator of manufacturing demand, grew at the slowest pace in nine months in November while sales of motorcycles and scooters -- where about 65 percent of payments are in cash -- fell for the first time in almost a year.
Commercial credit sank to a 19-year low as backlogs piled up at factories and banks stayed busy with the task of exchanging currency notes. Meanwhile deposits surged, pushing the credit-deposit ratio to a six-year low.

"For a cash dependent economy, a cash crunch is not good," said Madhavi Arora, Mumbai-based economist at Kotak Mahindra Bank Ltd.
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https://www.bloomberg.com/news/arti...utlook-dimming?cmpid=yhoo.headline&yptr=yahoo


Oh but Bhakts can cover their eyes and ears, but the reality persists.
 
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India's shock move to abolish high-value banknotes was expected to deliver a windfall to lenders, and banks have indeed seen coffers swell after people deposited 12.4 trillion rupees($183 billion) in cash into the system.

But while banks may benefit in the longer term, so-called "demonetization" has hit them hard in the immediate aftermath, with demand for credit plummeting and additional costs incurred to make the transition.

Prime Minister Narendra Modi's decision to remove 500 and 1,000 rupee notes to funnel illicit cash into the formal financial sector has led to a severe cash shortage as the central bank has replaced barely a third of the higher-value notes that had been in circulation.

That has hit business confidence and dented demand for loans, hurting banks that were already battling the weakest loan growth in nearly two decades.

Not that they have resources to process loans anyway. Removing 86 percent of currency in circulation from Asia's third-largest economy has proved harder than expected, and staff have focused mainly on customers changing old money for new.

"Our top priority is to provide relief to our customers, while lending could wait for some time," said Vaibhav Anand, who manages a branch of state-run Bank of India (BOI.NS) in Parliament Street, near Modi's office in New Delhi.

For a sector that has long struggled with low profitability and sour loans currently totaling $136 billion, even a temporary hit is painful.

And the impact could be longer than expected, if businesses recover slowly.

Banks are seeing temporary costs pile up, as they pay overtime to employees and hire additional security guards to manage crowds depositing old banknotes before a year-end deadline or swapping them for new ones.
Lenders also need to recalibrate cash machines after the government issued new banknotes that were different sizes to the abolished ones.

Those costs could reach 351 billion rupees ($5.2 billion) for banks, estimated Centre for Monitoring Indian Economy, a business information provider.

The Reserve Bank of India (RBI) has also ordered that banks waive fees for ATM transactions and card payments until the end of the year, depriving them of a lucrative source of income.

Banks had at least hoped that a rally in bond markets since Modi announced demonetization would boost treasury gains, given lenders own around half of government debt.

But those hopes were dashed after the RBI unexpectedly held rates last week, sending markets lower.
Analysts still believe the longer term impact on banks could be positive, channeling more funds into the formal economy and driving up sales of credit cards and other services.

But Vinod Kathuria, an executive director at state-run Union Bank of India (UNBK.NS), said it would take at least two quarters for loan growth to return to normal.
For Singh, the small business owner, that will feel like an eternity.
"My sales were growing at about 15 percent a year, but now I am expecting a fall of about 20 percent this year," he said.

"Small businesses have been ruined.

"https://finance.yahoo.com/news/pain-gain-indian-banks-modis-231509435.html
 
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[h=1]Demonetisation’s ever-changing rules: a complete history[/h] Nearly a month has passed since Prime Minister Narendra Modi announced that all Rs 500 and Rs 1,000 notes in circulation would be cancelled overnight, a sweeping move likely to continue to disrupt daily life for months to come.
But the devil of demonetisation has been in its details, which the government has changed repeatedly since November 8 as it attempts to close loopholes and respond to unanticipated needs. Limits on how much cash you can exchange at a counter or withdraw from an ATM keep swinging. And places where old notes can be accepted also switch every couple of days.
On November 8, 2016, all your old currency was valid.
Little could you imagine the changes that were in store.
http://www.hindustantimes.com/static/demonetisation-timeline/
 
[h=1]Mehbooba hails demonetisation, asks PM to fulfill CBMs[/h]By Monitor News Bureau

Excerpts:

To questions on demonetisation, Mehbooba hailed the decision, saying it will benefit the country. "I congratulated the Prime Minister for the decision of demonetisation. This is not an ordinary decision," she said, adding "All those who have illegal money, fake currency have been hit by this move."


The Chief Minister said the people will face difficulties for some time. "Whenever there is any drastic decision, some kinds of inconvenience are caused for some time but I believe it will prove historic for the nation," she added. Contending that demonetisation move will lead to the improvement in development for the country, she said, "There was no development for the last 70 years. No proper infrastructure, hospital, roads, water etc. In the coming days the improvement of the country will be speedy because of Prime Ministers decision.

Link: http://www.kashmirmonitor.in/Details/113200/mehbooba-hails-demonetisation-asks-pm-to-fulfill-cbms
 
K V Thomas, Lok Sabha MP, is chairman of Parliament’s Public Accounts Committee, which has taken up demonetisation suo motu, and has called the RBI governor and the secretaries for economic affairs and financial services in the second of January. Excerpts from an interview:
The PAC has taken up demonetisation suo motu. What is it examining?
We have called the RBI governor and officers from the finance ministry before the panel. PAC members have been asked to prepare questions that will be sent to RBI and concerned officers. We will ask why the demonetisation decision was taken, how much black money was in circulation, how many Rs 500 and Rs 1,000 notes were in circulation, what steps have been taken to print new currency notes, whether all the old currency will be replaced, whether digitisation will also go along with it, and whether they are technologically prepared for digitisation.
What feedback have you got on demonetisation?
Personally, I feel that the prime minister took a decision without homework. Somebody might have misled him. Demonetisation happened on two earlier occasions. But when demonetisation takes place, equivalent currency is made available to the public. Here what happened is that not only is equivalent currency not available but even what the government said – that in 50 days things will become normal – is not happening. We are given to understand that even by May, things may not become normal.
Why has the committee taken up the matter suo motu?
We can take up any matter suo motu. We have taken up issues connected with finance earlier too. That is why none of members disagreed this time either. We are not questioning the decision of the government. We are going to find out why the government has gone for demonetisation, whether adequate preparations were made.
What is the stand of the BJP members in the PAC?
Everybody is for it [taking it up]. We discussed the matter in a meeting and decided together to take it up. We did not call the meeting in December because the prime minister had promised on November 8 that at the end of 50 days, he would bring everything to normal. That is why we are calling the officers in the second week of January.
Do you also plan to call the chiefs of public sector banks?
After the examination of the RBI governor and secretaries concerned, the PAC will decide its next course of action. It will depend on the answers we get.
How do you view the government’s handling of demonetisation?
The government has made changes in policy one after another. The prime minister said everything will be normal after 50 days. The finance minister now suggests that the government will not release the entire currency equivalent to old currency as some will be digitised. The question is whether India had made adequate preparations for digitisation. We are not prepared. Fifty per cent people do not have even bank accounts; people do not how to handle e-banking.
The Department-Related Committee on Finance is also examining demonetisation. Is that not duplication?
We have always been going together on many issues. Even on the issue of nonperforming assets in banks, both the PAC and the finance committee had called the RBI governor… We have said we will examine the monetary situation in the country, they have put it as demonetisation.
When will you submit the report?
We want to submit it when the Parliament session begins.
As an Opposition MP, do you agree that the Opposition has not bee united on demonetisation?
There was a by and large unity of the Opposition parties except when Rahul [Gandhi]went to meet the PM. Some parties said he went without consulting them. Rahulji went to the PM on the burning issue of farmers. There could be some misunderstanding. But otherwise the Congress was able to unite Opposition parties, bringing Trinamool Congress and CPM together, AIADMK and DMK together, SP and BSP together. Even the BJD was coming to us.
http://indianexpress.com/article/in...digitisation-of-cash-says-k-v-thomas-4436083/
 
[h=1]Modiji, how can these Indians cope with the note ban?[/h]The maid who cooks for us seemed bemused, as if she could not make up her mind whether to be sad or happy. A little coaxing brought out the story.
Her young married daughter had come to her distraught.
She had been squirrelling away little bits from what her husband gave her every month to run the household.
Over the last few years this had become what, to her, was not just a tidy sum but invaluable.
It was her own money which she could spend as she pleased so long as her occasional splurge (again by her standards) did not attract her husband's notice.
Now, with demonetisation, what was she to do with these Rs 500 notes?
Her most prized possession stood in danger of becoming useless.
If she gave it to her husband, at best he would get it changed and give it back to her. But there was a clear danger that, from the next month, he would reduce the monthly household allowance because he knew that not all of it was needed.
Our maid then had a brainwave.
She told her daughter, 'Tell jamai it is my money that I had left with you for safekeeping.'
This innovative solution should have made her entirely happy but, as she confessed to my wife, her daughter should give her at least a part of the percentage that the local mahajan was charging for conversion.
She couldn't ask, but it would be nice if her daughter on her own...
Any thought that this sort of thing has happened only to women who either don't have a bank account or are not good at operating the odd one they have is quite wrong.
As I settled down to a good cup of tea at my sister's, the topic inevitably turned to the demonetisation tsunami and my sister, with much amusement, narrated her own tale.
She also had been in the habit of tucking away currency notes here and there -- little bits she saved from running the household.
She had more than one bank account and a couple of joint accounts but didn't bother to have the amounts squirrelled away deposited there.
Then when the bombshell came, she had little difficulty in telling my brother-in-law what had happened. He was as amused as her, but was taken by surprise when she confessed she had no idea of how much was tucked away.
Then the real fun began.
The duo went around the apartment looking behind books and the rear end of drawers and the Rs 500 and odd Rs 1,000 notes kept emerging.
There was even a tidy sum underneath an ornamental cloth on which sat a few idols in the puja corner of the bedroom.
Eventually, when the little bits were all gathered together, the duo told me with great aplomb that the amount ran into thousands!
This was the fun part of it.
Not everybody was happy over the new development.
A couple of days after the announcement, the old retainer from my parents' days who now watched over our ancestral home came to my brother-in-law, looking totally distraught.
He would put away the little sums, in currency notes of course, that he saved every month from his wages, then take it with him when he went home to Bihar once a year or so. This was his savings.
He had no bank account and, being rather old and barely literate, he was intimidated by the thought of operating one.
My brother-in-law assured him his savings would be secure, but when I heard the story, I wondered how many people, particularly among the illiterate and aged, were there in village after village who did not have people like us to fall back upon.
It is not just those with little learning who are in dire straits.
One of the few businessman friends I have runs a highly successful leather goods manufacturing business.
Now he has a huge problem paying his workers' wages as most of them are migrant and prefer getting paid in cash.
The odd ones who have bank accounts have had to spend the better part of a day queuing up to simply draw some money.
With these stories buzzing around in my head I went the other day for the first time after the big event to Kolkata's Gariahat market to check out if fish prices had really come down.
It was rather early in the morning and the pavement, difficult to negotiate with customers thronging the hawkers' stalls, was quite empty.
Down that pavement moved a young man in a vest and lungi, intoning the familiar cry of a raddiwala, asking for old newspapers, bottles and the like.
Then after calling out 'Purono kagaj (old papers)' a couple of times, he suddenly added, 'Purono note (old currency notes).'
I was amazed and stopped him to ask what was his rate of exchange was. He replied '450 for 500' and kept a straight face for a second. Then he burst out laughing and the stall owners around us joined him.
He was just having fun and I had made an ass of myself by taking him seriously.
I gamely joined in the laughter and thought that at least some of us had not lost our sense of humour in these troubled times.
http://www.rediff.com/news/column/modiji-how-can-these-indians-cope-with-the-note-ban/20161216.htm
 
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