'Modi has gone completely wrong on demonetisation'

[prasad1]

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[prasad1]

 

[a-TB]

Thanks for the post. I am amused. So I have given a thums up. LOL.
My score continues to remain the same today so far.

It must be the blessings of Sriman Narayana that I have earned a Thumbs up from you, what Punyam I must have done in the past LoL.

Well I very amused and feel so good that I am going to give a Thumbs up for you - imagine that. Your score is improving now .. LoL

 

[prasad1]

It must be the blessings of Sriman Narayana that I have earned a Thumbs up from you, what Punyam I must have done in the past LoL.

Well I very amused and feel so good that I am going to give a Thumbs up for you - imagine that. Your score is improving now .. LoL

Wow the love is overwhelming. LOL.:heh:

 

[prasad1]

IN NOVEMBER India's government perpetrated an unprecedented act that is not only damaging its economy and threatening destitution to countless millions of its already poor citizens but also breathtaking in its immorality. Without any warning India abruptly scrapped 85% of its currency. That's right: Most of the country's cash ceased to be legal tender. Shocked citizens were given only a few weeks' notice to take their cash and turn it in at a bank for new bills.

The economic turmoil has been compounded by the fact that the government didn't print a sufficient amount of the new bills, lest word leak out as to what was about to take place. The new bills are also a different size than the old ones, creating a huge problem with ATMs. Even though India is a high-tech powerhouse, hundreds of millions of its people live in dire poverty. Many workers are leaving the cities to go back to their villages because so many businesses are closing. Countless companies are having difficulty meeting payroll, as they can't get the cash to do so. The real estate market has tanked.
India's economy is based mostly on cash. Moreover, much of it operates informally because of excessive rules and taxes. The government bureaucracy is notorious for its red tape, lethargy and corruption, forcing people to get by on their wits.


The World Bank's annual survey, Doing Business, measures how difficult it is to start and manage a business in 190 countries, using such metrics as what it takes to set up a legal business, obtain construction permits and get electricity. India ranks among the worst in the world in these areas.

Not since India's short-lived forced-sterilization program in the 1970s--this bout of Nazi-like eugenics was instituted to deal with the country's "overpopulation"--has the government engaged in something so immoral. It claims the move will fight corruption and tax evasion by allegedly flushing out illegal cash, crippling criminal enterprises and terrorists and force-marching India into a digitized credit system.

News flash: Human nature hasn't changed since we began roaming this planet. People will always find ways to engage in wrongdoing. Terrorists aren't about to quit their evil acts because of a currency change. As for the digitization of money, it will happen in its own good time if free markets are permitted. And the best cure for tax evasion is a flat tax or, at the least, a simple, low-rate tax system that renders tax evasion hardly worth the effort. Make it easy to do business legally and most people will do just that.
India is the most extreme and destructive example of the anticash fad currently sweeping governments and the economics profession. Countries are moving to ban high-denomination bills, citing the rationales trotted out by New Delhi. But there's no misunderstanding what this is truly about: attacking your privacy and inflicting more government control over your life.
India's awful act underscores another piece of immorality. Money represents what people produce in the real world. It is a claim on products and services, just as a coat-check ticket is a claim for a coat left at the coat check in a restaurant or a ticket is for a seat at an event. Governments don't create resources, people do. What India has done is commit a massive theft of people's property without even the pretense of due process--a shocking move for a democratically elected government. (One expects such things in places like Venezuela.) Not surprisingly, the government is downplaying the fact that this move will give India a onetime windfall of perhaps tens of billions of dollars.
http://www.forbes.com/sites/stevefo...-money-is-sickening-and-immoral/#e7b3ae21148a

This article was written by Steve Forbes himself.

 

[V.Balasubramani]

[h=1]2017 Is Going To Be A Good Year For India's Property Market[/h]It looks set to be a bumper year for India in 2017 when it comes to real estate and the economy as a whole. That makes a marked turnaround for a persistent underperformer in Asia – India.

The nation has shot to the top of the list of preferred destinations for real-estate investment in the eyes of major institutional investors. It is also the fastest-growing major economy, set for growth of 7.0% next year after this year’s projected 7.2%, according to Thomson Reuters.

That’s ahead of China’s 6.7% growth rate this year, expected to slow to 6.3% next year – almost a full percentage point below India. And it is greater domestic consumption that is driving India’s improvement, suggesting the middle class is truly coming into its own – and sure to demand housing to suit their tastes.

The recent highly controversial demonetization initiative to render higher-valuation notes worthless is designed to drive cash from the “grey economy” into the mainstream. That is likely to knock growth temporarily, with Nomura forecasting a two-quarter stalling period, knocking one percentage point off growth. But in the long run, driving “black money” into the real economy is likely another long-run driver of growth.

It’s about time. The world’s second-most populous nation has been a sleeper, particularly when compared with China. India’s 1.3 billion people isn’t far behind China’s 1.4 billion, and is expected to be the world's most populous nation by 2022, according to the United Nations.
........
.......

Although India is outstripping China’s economic growth at the moment, it’s off a lower base. Still, the outperformance is even encouraging Chinese conglomerates to diversify into the subcontinent.

Dalian Wanda, the huge privately-held Chinese conglomerate, has said it may invest up to $10 billion into India. Fosun International, another huge private Chinese company, is said to be prepping a $1 billion investment platform in India.

Read more at: http://www.forbes.com/sites/alexfre...year-for-indias-property-market/#79215d183f9b

 

[GANESH65]

2017 Is Going To Be A Good Year For India's Property Market

It looks set to be a bumper year for India in 2017 when it comes to real estate and the economy as a whole. That makes a marked turnaround for a persistent underperformer in Asia – India.

The nation has shot to the top of the list of preferred destinations for real-estate investment in the eyes of major institutional investors. It is also the fastest-growing major economy, set for growth of 7.0% next year after this year’s projected 7.2%, according to Thomson Reuters.

That’s ahead of China’s 6.7% growth rate this year, expected to slow to 6.3% next year – almost a full percentage point below India. And it is greater domestic consumption that is driving India’s improvement, suggesting the middle class is truly coming into its own – and sure to demand housing to suit their tastes.

The recent highly controversial demonetization initiative to render higher-valuation notes worthless is designed to drive cash from the “grey economy” into the mainstream. That is likely to knock growth temporarily, with Nomura forecasting a two-quarter stalling period, knocking one percentage point off growth. But in the long run, driving “black money” into the real economy is likely another long-run driver of growth.

It’s about time. The world’s second-most populous nation has been a sleeper, particularly when compared with China. India’s 1.3 billion people isn’t far behind China’s 1.4 billion, and is expected to be the world's most populous nation by 2022, according to the United Nations.
........
.......

Although India is outstripping China’s economic growth at the moment, it’s off a lower base. Still, the outperformance is even encouraging Chinese conglomerates to diversify into the subcontinent.

Dalian Wanda, the huge privately-held Chinese conglomerate, has said it may invest up to $10 billion into India. Fosun International, another huge private Chinese company, is said to be prepping a $1 billion investment platform in India.

Read more at: http://www.forbes.com/sites/alexfre...year-for-indias-property-market/#79215d183f9b

Dear Bala ji...

I don't think it is that easy for Indian property market to recover so early. Our property market was in doldrums even before announcement of demonetisation owing to various reasons.

First of all many Statement Governments increased the circle rates so high that the properties started selling below the bench mark set by the Governments. People who bought a property at a very high rate, were reluctant to sell at loss unless in extreme emergency. Gradually the demand for the same started deminishing.

Again the report seems mostly based on prime properties on various location. If you notice recent trend, very limited to nil transactions were done on prime properties across major cities in India during the last one year or so. This again shows a downward trend.

Properties on lesser important sites (mainly residential flats) were sold and bought as an investment and a medium to consume or set aside a part of black money. The upward revision of circle rates and effects of demonetisation has dried these oppertunites as well. As per some recent report more than 3 to 5 lakhs housing units are lying unsold in Delhi and NCR alone.
One more reason I find for lesser demand in property is the high interest rates. Despite the facts that Banks are now overflowing with funds, the interest rate cuts as expected is not happening. One of the reports suggests rate cuts if at all happening, would not more than 0.25% to 0.50% which seems to be highly insufficient as people have to find the entire finance for a property in white..

I think it will take little time to get things settled....

 

[V.Balasubramani]

Dear Bala ji...


I think it will take little time to get things settled....

Ganesh Ji,

I would like you to go through this article...

Currency demonetisation to shake up real estate for sustainable growth


The landmark move by the Modi government to demonetise high-value currency notes to stamp out black money will have a far-reaching impact on the capital-intensive real estate sector where almost one-third of transactions still involve unaccounted money.

Though initially, in the short term, the government's bold move will hit the sentiment of the real estate market, already reeling under a recession, in the medium- to long-term, the sector will reap the benefits of the greater transparency ushered in by government's "surgical strike" against black money.


This is especially so when in the last couple of years, the government has initiated a number of key reforms in the real estate sector like Real Estate Regulation Act (RERA), GST, REITs and Benami Transactions (Prohibition) Amendment Act, 2016, besides reforms related to FDI, to bring in transparency. Consequent to the reforms, foreign investors are already betting big on real estate.

In a recent development, global private equity player Xander has formed a joint venture with Dutch Pension Fund Manager APG Asset Management to deploy $1 billion in real estate in India. Much to the relief of cash-strapped and debt-ridden developers, institutional financing will also come with lesser risk weightage.

As the real estate sector has significant consumption of black money, the impact of the government's crackdown will be felt here much more.


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The debt-ridden developers, in the short term, will face cash-flow issues. And, in view of the high inventory and cash crunch, they may well have to resort to price-cutting to push up sales, much to the delight of property buyers.

Speculative and inflated pricing will take a beating in secondary or pre-owned properties, especially in markets which thrive on speculative investments. This will benefit home buyers as interest rates have already come down by 1.5 per cent in the last about one-and-a-half years.

Going forward, with improved liquidity of banks following currency demonetisation, interest rates are expected to further come down, making homes more affordable.

This will boost home sales which have seen a 15 per cent hike in Q2 FY17 across the top eight cities. And, as RERA becomes operational and home buyers get protection of their investment, sales will further pick up, especially in the affordable segment, much to the benefit of the government's Housing for All mission.


Speculative and inflated pricing will take a beating in secondary or pre-owned properties, especially in markets which thrive on speculative investments. This will benefit home buyers as interest rates have already come down by 1.5 per cent in the last abo ..

It's not just the top cities, even the tier II and III cities where the government is focusing on Housing for All, and Smart City projects, are expected to gain. Of late, many big organised players with corporate governance have been entering these cities.

Some of these cities which offer good job opportunities, especially in IT and have good physical and social infrastructure, are already on the radar of domestic and global funds. Demonetisation will further boost investors' confidence in the long run.

And, since corruption and approvals' bottlenecks are major factors responsible for price inflation, demonetisation, coupled with the government's next big reform to introduce a single-window clearance system, will make property affordable for the masses.

Notwithstanding initial setbacks, as the sector reorganises itself, real estate will be transformed into a more efficient, evolved, corporatised, fair and transparent asset class, well on its way to a long-term sustainable growth path.

Source:
http://economictimes.indiatimes.com...ofinterest&utm_medium=text&utm_campaign=cppst

And I am convinced with the opinion conveyed in the above report.

 

[tbs]

hi

I think it will take little time to get things settled....

may be more than 100 yrs....even after 70 yrs....our reservation policy/other still going on....same way CASH LESS/CORRUPTION

MUKTH BHARAT......IT TAKES MANY MORE DECADES HAS TO GO...

 

[V.Balasubramani]

Since the Government is fighting against black money..corruption...counterfeiting, etc conveiently practiced during the last 70 years looting.......it may certainly take time...to see the desired outcome.

What experts think?

Almost all the stalwarts of the banking sector including Deepak Parekh, Chanda Kocchar think that the move will help curb black money in the economy.

According to MD & CEO, ICICI BankBSE -0.42 % Chanda Kochhar who told ET Now, "this move will definitely bring about a whole amount of transition to no cash or low cash kind of transactions,".

"A parallel black economy will collpase," one of the leading lawyers in taxation laws, Harish Salve told ET Now.

Narayana Murthy, founder of the InfosysBSE 0.42 %, welcomed the government's move in its fight against corruption. Murthy also added that "the dishonest will have to suffer, absolutely that is the right thing."

HDFC Chairman Deepak Parekh anticipated that the Land will become cheaper and "one expects that real estate price will come down in medium term."

Source: Google images

 

[prasad1]

Demonetisation impact: As tourists stay away, 50 million livelihoods at risk

Anjuna (Goa): Raju Lakhani's beachside restaurant here at this popular tourist strip in north Goa should have been packed this time of the year. But the tables at Moon Star are empty and the restaurateur is a worried man.

"We have no customers," he said. "Almost 90% of tourists are leaving because of the inconvenience caused by notebandi.

" Lakhani said he now has no choice but to lay off workers. He is one of Goa's many restaurant owners who are feeling the brunt of what is referred to as notebandi–the colloquial term for the ban on India's Rs 500 and Rs 1,000 notes, 86% by value of all bank notes.

At 2.8%, the travel and tourism sector in India grew faster last year than it did worldwide (2.3%). It contributed to 6.3% of the country's gross domestic product (GDP)–including direct, indirect and induced contributions–and translated to Rs 8.3 lakh crore in 2015, according to this 2016 report by the World Trade And Tourism Council (WTTC), a forum for the travel and tourism industry.

Tourism is also a labour-intensive sector, creating 78 jobs for every million rupees invested, according to tourism ministry data. The agriculture sector creates 45 jobs for the same investment, and manufacturing, only 18.

Ever since 2009, the share of tourism in employment has consistently been over 10% of India's workforce of 500 million workers. This means that the sector employs almost 50 million people–more than the population of Colombia.

In 2015, the number of foreign tourists visiting India was over 8 million, and earned the country foreign exchange earnings of almost Rs 1.35 lakh crore, a growth of 9.6% over 2014, according to tourism ministry data.

But if travel entrepreneurs like Lakhani start scaling down their businesses, all this could change. In the weeks following notebandi, it was reported that foreign tourists were being inconvenienced. Bookings also fell rapidly in Kerala and Karnataka.

"People come here to spend their own money but they cannot access it," said Qayoom. "This is ridiculous." Shack owners mostly set up shop during peak season and operate in cash. However, some, like the H2O bar in Calangute and Sunset Bar in Siolim, have ordered swipe machines. These are yet to arrive.


Read more at: http://www.sify.com/finance/demonet...t-risk-news-demonetisation-qmxqrucjiabhf.html

 

[biswa]

Two points:

1. It is a fallacious statement that new notes have to be available in equal amount to old notes that were available. Not true. Much of the saved old cash can be deposited into bank accounts and only the minimum required for transactions need to be withdrawn. The days of keeping cash under the mattress should be over.

2. Never underestimate the person of the common Indian. Some people are saying that most Indians will never understand banking. However it is clear that 95% people understand mobile phones even in the most rural villages and a large fraction understand smart phones. If they can use mobile phones, Indians do have the capability to use banks or alternate financial infrastructure.

Indians are super adaptable, and if India wants to be fast growing, it has to get with the program.

 

[biswa]

Regarding tourists I just had a fellow employee from the US (who is a Frenchman) just complete his first 2 week visit to India. He experienced zero problems. I asked him about demonetisation effects and he brushed it away. In most tourist areas, most hotels and restaurants accept credit cards. I myself have paid many times. Uber can be used easily all over India (with a US Uber account). There is really little scope to complain.

 

[Raji Ram]

....... There is really little scope to complain.

... for those who are rich, Biswa Sir! The lower middle class or poor suffer the most. :sad:

For those who are used to swiping cards, life is easy!

 

[biswa]

... for those who are rich, Biswa Sir! The lower middle class or poor suffer the most. :sad:

For those who are used to swiping cards, life is easy!

I am pretty sure even house maids have bank accounts these days. If not, they really should. But anyway the post above from which you quoted was about tourists. I am sure 99% of tourists arrive in India with a credit card. (At least the ones with money to spend).

 

[Raji Ram]

I am pretty sure even house maids have bank accounts these days. If not, they really should. But anyway the post above from which you quoted was about tourists. I am sure 99% of tourists arrive in India with a credit card. (At least the ones with money to spend).

Dear Biswa Sir,

Tourists don't suffer because they use cards for most of their needs. Many stores have installed swiping machines and people have

started using them too. But the daily waged people depend on cash and they don't get work as they used to get before! Non availability

of 500 notes is the main reason! It will take a few months for life to return to normalcy.

 

[prasad1]

I am pretty sure even house maids have bank accounts these days. If not, they really should. But anyway the post above from which you quoted was about tourists. I am sure 99% of tourists arrive in India with a credit card. (At least the ones with money to spend).

A Dollar credit card is not same as Rs credit card. Last year when I tried to get cash using my American credit card it was not successful. Even the local airline line GoAIR or Indigo will not accept american credit card. Rediff shopping will not accept American credit card. If you use american credit card you pay a premium even if accepted.
I do not know about rich people, I am frugal and would bargain for better price it works only with cash.

 

[tbs]

... for those who are rich, Biswa Sir! The lower middle class or poor suffer the most. :sad:

For those who are used to swiping cards, life is easy!

hi

if swipe card works/fullly powered....then life is wasy....other wise...its horrible....

 

[tbs]

A Dollar credit card is not same as Rs credit card. Last year when I tried to get cash using my American credit card it was not successful. Even the local airline line GoAIR or Indigo will not accept american credit card. Rediff shopping will not accept American credit card. If you use american credit card you pay a premium even if accepted.
I do not know about rich people, I am frugal and would bargain for better price it works only with cash.

hi

in purchasing at GRT at chennai....american credit never worked for even gold purchase...i used INDIAN DEBIT CARD used

for indian purchase,,,,,

 

[Raji Ram]

.. if swipe card works/fullly powered....then life is wasy....other wise...its horrible....

Very true, TBS Sir!

 

[Raji Ram]

Connectivity is a big problem in banks. A cheque for Rs. 1000 bounced because of non-connectivity and the bank charged as Rs. 172/

Howzaat? For the goofing of internet, we pay the penalty!!

 

[auh]

2. Never underestimate the person of the common Indian. Some people are saying that most Indians will never understand banking. However it is clear that 95% people understand mobile phones even in the most rural villages and a large fraction understand smart phones. If they can use mobile phones, Indians do have the capability to use banks or alternate financial infrastructure.

Indians are super adaptable, and if India wants to be fast growing, it has to get with the program.

Two observations here:

1) Adapting to mobile phones cannot be construed to mean a capacity to adapt to banking mechanism. They are totally different in terms of operations & usage, impact and security. The cost of error in banking could be quite huge as compared to an error in mobile phone usage.

2) I think the issue in contention is not "banking activity" per se as a simple deposit and withdraw operation. There are various controls, security measures and regulations that come as an assoiated baggage when one steps foot in the banking world. He is forced to depend on "variables" that did not bother him earlier (during the days of hard cash in hand). The IT may send a notice regarding a transaction for which he may not have a clue as to where to start with. The bank may debit him an amount due to a procedure that he did not understand. Yes, over a period of time he may be constrained to accept and face the challenge before him, but at a cost.

 

[GANESH65]

Connectivity is a big problem in banks. A cheque for Rs. 1000 bounced because of non-connectivity and the bank charged as Rs. 172/

Howzaat? For the goofing of internet, we pay the penalty!!

I think this can be challenged. Connectivity is an issue related to the Bank and its system.. Bank can charge for those services/deficiencies directely attributable to the customer only. That way if the cheque is bounced due to any ommission/commission on the part of the drawee only can be charged. Time to see your lawyer.

 

[prasad1]

Farmers across India are battling a steep fall in wholesale vegetable prices and are forced to discard their produce as a nationwide cash crunch following the scrapping of high-value banknotes hurts demand.
The crash in wholesale prices comes at a bad time for farmers, who reaped a bumper crop and were hoping for good returns to make up for losses induced by two straight drought years.
Andhra Pradesh
Last Wednesday, S Raju, a farmer from Anantapur district, brought around two tonnes of tomatoes to Bowenpally market in Secunderabad but had to return home empty handed.
Raju said he spent nearly Rs 4 per kg to raise the tomato crop and it cost him another Rs 2 per kg to transport the produce to Secunderabad, more than 400 km from Anantapur.
But he was shocked when traders at Bowenpally offered not more than Rs 2 a kg for his crop.
Raju realised the price quoted was not sufficient even to meet the transportation cost, as he had to travel back to Anantapur.
Frustrated, he unloaded boxes of tomatoes and dumped them in the market yard, before cursing the traders and market authorities. Some vendors picked up tomatoes for free, while cattle feasted on the remaining dump.
“Apparently, he has come all the way to Hyderabad, because tomato prices came down drastically in Anantapur market,” Srinivas, a local commission agent, told the media.
The situation is similar in other parts of Rayalaseema that are known for production of tomatoes.

 

[prasad1]

Uttar Pradesh
The state government has approached several potato-deficit states, offering them to lift surplus potato from the state at an affordable rate in a bid to help its farmers get a better price.
The government move comes amidst prevailing low prices of potato that have added to the plight of farmers. “The state government has written to potato-deficit states like Karnataka, Kerala, and Tamil Nadu, telling them they can procure potato from UP,” horticulture director SP Joshi said.
Joshi also blamed farmers, saying they erred in anticipating the price. “Potato was selling for Rs 1,500 per quintal till July-August but most farmers chose to sit on the stock, guessing the price will go up further. That did not happen and a new crop of potato from within and outside the state also arrived, compounding the price situation,” he explained. UP accounts for 35-40 % of the country’s potato production.
Read | Post demonetisation, a farmers’ wish list from the budget
Madhya Pradesh
For the second time this year, onion farmers of Mandsaur-Neemuch belt are forced to sell their crop for as low as Rs 1 per kg. Many are abandoning their produce and the main culprit appears to be demonetisation, say those associated with the trade. Explaining the impact of the move, an official said small traders, who bring in supply from marginal farmers, have vanished due to shortage of cash and big traders seem to have formed a cartel.
Cashless transactions could bring traders under the I-T department’s scanner — which they don’t want — the official added.
State horticulture director Satyanand, however, blamed local factors for the crash, saying there was no spike in supply. In April, the government procured onions for Rs 6 per kilogram after prices fell to 25 paise per kg in Neemuch.
Lalaram Bhatt, a farmer, was in tears after hearing about the price crash. “We are already facing cash shortage problems due to demonetisation and this fall in onion prices is a double blow. At these prices, we won’t be able to pay even for transport,” he said.
Read | In cashless times, farmers sell onions at Rs 1 per kilo in Neemuch
Bihar
High cauliflower yield coupled with a cash crunch after demonetisation has sent wholesale prices crashing in Bihar. Farmers in Patna, Vaisali, Muzaffarpur and other districts are forced to sell produce at throwaway rates. On Saturday, the price of the seasonal vegetable was at its lowest — Rs 10 - Rs 15 per kg — in major retail markets. In wholesale markets, the price was almost one-third.
“This time, there has been a bumper production, especially in the last leg of the harvest. This is probably the reason for falling prices,” said Ranjeet Kumar, a vegetable retailer.
Read | After crop failure, Vidarbha farmers in Maharashtra crippled by note ban
http://www.hindustantimes.com/india...p-worthless/story-q79Oaf8eGTLX0yaHXwkJLL.html