Currency Demonetization in India: General Comments

currency demonetization in India

Comment Dt. 11.01.2017
Well…it’s more or less confirmed now that the currency demonetization in India was a well planned guinea pig experiment of the US to check the reactions of the people on being deprived of cash. The fact to be noted here is that the US has high denomination notes of 88% value of the currency in circulation, which was similar to the Indian conditions. However, of course, the US chose to carry out this experiment in India very much like the Britishers codified Indian laws — though it is a different matter that the experiment succeeded at that time. The fact remains: India was, is and will remain a colonized country forever.

Comment Dt. 31.12.2016
I don’t understand what this government is up to. Is the subvention of 3% on housing loan of Rs 12 lakhs a sly move to compensate the financiers and builders who are sitting on huge stocks of properties, for the real estate prices would have fallen after demonetization? If you give interest subvention of 3% on a loan of 12 lakhs, it simply means you are financing a house of Rs 20 lacs because no bank gives a housing loan without a haircut of 40℅, esp when they are running huge NPAs. Also, the black money transactions need not happen in cash. It can take place through several other modes including Bitcoins. So, the under-valuation of properties for registration will continue unabated and will increase even further after March 2017 when enough cash would have entered the economy. So, essentially this Rs 12 lakhs housing loan would be financing a house worth Rs 30-40 lakhs, which is obviously not for the urban poor. Indeed, this is a very crooked move to help the builders.

Comment Dt. 16.12.2016
I personally don’t recognize Modi as PM. I think he is the biggest blunder of democracy. However, that doesn’t guide my opinions. So, RG’s meeting with Modi in his capacity as the PM per se is irrelevant to me. But I sense a conspiracy to remain silent. Now when the Parliament session is over, there is no reason for him to keep mum on his to-be-announced allegations against the PM. If he doesn’t speak, he will become incredibly incredible.

Comment Dt. 14.12.2016
Just when I was thinking the AAP + TMC is better than the Congress + Left, for they have distanced themselves from Nitish Kumar, who after calling for Sangh Mukt Bharat has done a 180 degree and supported demonetization in-Toto, Kejriwal has spoken. He says why RG doesn’t expose Modi outside the parliament. Is the CM of Delhi so ignorant of law that he doesn’t even know you can’t speak outside the parliament when it is in session? Or, is he subtly supporting Modi? Or, is he jealous of RG, for RG has stepped up in the ladder of leadership?

Comment Dt. 13.12.2016
The BJP is limitless nonsense it is now distributing Ladoos to people standing in queues. Actually, the problem is with the Congress and the AAP. If the BJP is daring so much as to distribute Ladoos to people standing in queues, you need to …………. as soon as they try something so vulgar. This government has made mockery of the common man. 

Comment Dt. 12.12.2016
Well…this is tragic. For the government less, for the Corporate more, but for the people a bit too much. And it’s ironical too. I was hearing an interview of Subodh Gupta yesterday, where he said that the demonetization is so tragic that sensitivity demands you don’t make humorous comments, and I agree. 
It’s like this. Nearly one lakh crores of counterfeit notes have been returned to the RBI in this demonetization process. By the end of it the notes returned might actually surpass the notes circulated; i.e., the value of notes returned may surpass Rs. 15.5 lakh crores. This would mean instead of recovering the black money, this exercise will end up producing more black money, which the RBI will have to account in its book by issuing extra currency thus leading to overall inflation and thus depreciation in the value of Rupee. Can anything be more tragic? This means hundreds of people have died for generating black money, and the plan of the corporate to wipe out the NPAs of the banks has failed miserably. OK. Let me clarify. It’s tragic for the government sans Modi, but it seems there is no government except Modi, and nothing is tragic for Modi.

Comment Dt. 08.12.2016
After reading what RBI governor has to say about windfall gains to the government, I have seriously started having doubts about the integrity of the financial systems. While studying finance, it took me days to reconcile to the fact that losses are the company’s assets and profits, the liability. How non-intuitive it is, but not if the company is considered a separate entity distinct from its shareholders, carrying a liability to its shareholders. The RBI governor says the money not returned will not be the government’s windfall gain but a the RBI’s liability even after the money is taken out of circulation. My simple question: who is the RBI liable to? Is it not liable to the public through the government. If the RBI governor is saying that the RBI will misuse this liability towards the public for re-capitalizing the banks, I would say he and his bosses in the government, who are custodians of the said liability, should be sent to jail.

Comment Dt. 07.12.2016
http://www.gktoday.in/blog/money-supply/
I have shared the above link because I think people need to get a refresher on Money Supply. Media and some well-known bankers like Meera Sanyal are claiming that all the money that was in circulation has already returned to the RBI. The latest count of the money returned as per the media reports is Rs. 11.5 lakh crores. They are adding 4 lakh crores of CRR into it and claiming everything has been returned. Of course, they are wrong because CRR is not part of the money in circulation. So, wait and watch. Don’t jump the gun. This government will make substantial wind fall gains, which will be used for recapitalization of banks.

Comment Dt. 29.11.2016
Till now I was not commenting on the allegation of the opposition that the BJP leaders had prior information of the demonetization exercise and that they deposited their money in banks or bought properties with it before the demonetization announcement. But now the latest from Modi that BJP leaders should disclose their bank transactions post November 8 makes me change my stance. Of course, this disclosure is ridiculous. How does a bank transaction post November 8 proves anything either ways? As expected Media is playing it out as some kind of transparency and anti-corruption step, which shows the only objective of this announcement is propaganda. Well…now I support the opposition charge irrespective of evidence. 

Comment Dt. 27.11.2016
Sometimes economists say such silly things that you start doubting the integrity of the financial systems per se. Solve this riddle. I, the King, am asked by my Queen to issue 100 coins to the poor. The poor drop 10 black coins in Ganga for purification. Just then my Queen asks me to retrieve all coins and issue new coins in lieu thereof. Of course, I can only retrieve the 90 coins because the 10 coins have gone on an irretrievable purification course. Now the BJP economists tell me these 10 coins are your windfall gain; don’t tell anything about this to the Queen and just pocket them to yourself. Will any Queen worth her salt allow it! Those who have solved this riddle please tell the BJP economists that the black money recovered in this demonetization exercise is not the windfall gain of the RBI, the King, but the public money in custody of Modi, the Queen, which black money purified itself as soon as it was dropped in Ganga, for Ganga purifies everything — as per the law of Nature, Modi should be King, not Queen, but unless he acknowledges his Queen, he shall be called Queen only because there is no King without Queen.

Comment Dt. 22.11.2016
Just now I heard Arun Jaitely say keeping such a vast operation secret is the achievement of the government. Well…I congratulate the government and pity the Indian Media, who couldn’t expose this secret operation of the Indian Government aka Mossad, which has taken so many lives already. I keep receiving links about conspiracy theories of the depopulation drives of the governments. Is this one of them? No, I don’t congratulate terrorists. So, Dear Government: Hard Luck; I take my congratulations back. But, I can’t stop pitying the media. 

Comment Dt. 17.11.2016
1. There was only one good thing about this demonetization that the extravagant expenditure on marriages had stopped, but the government has now increased the withdrawal limit to Rs 2,50,000/-, and that too just on self-declaration, not on any police verification, etc.
2. I fail to understand the AAP and Arvind Kejriwal. A party which calls itself a party of “fakirs” makes a statement through its convener that a marriage can’t be executed in Rs. 2,50,000/-. Incredible!  It should take no more than Rs. 2,000, which is the ATM cash withdrawal limit, to execute a marriage. I don’t know whom does this man and the AAP represent. Not me for sure! (And yes, I am a common man, a bit too common perhaps.)

Comment Dt. 16.11.2016
When a new child is born, there is labor pain”  —Sudhanshu Mittal aka a……., BJP
I am surprised that a BJP spokesman is actually comparing the suffering of people to labor pain. You don’t get raped to bear a child. Modi, the bachelor, never …… his wife; therefore, he has r….. the whole nation. If any child is born out of this suffering, it will but be a b…….. — otherwise, I wouldn’t discriminate one child from another, but here at least some people are enjoying being raped, and genes do matter, little or more.

Comment Dt. 15.11.2016
Well…this post is for the incompetent anchors in media, so that they can ask right questions from their interviewees. First and foremost, it is not demonetization. It is remonetization. This means each single demonetized note has to be printed again, where after it has to be circulated unless the government wants to decrease Narrow Money while maintaining Broad Money or wants to decrease Broad Money per se, which is an economic decision based on numerous factors beyond parallel economy. If the government wants to maintain the Broad Money while decreasing the Narrow Money, it will still have to account for the Narrow Money in the form of some cashless economy. 
It is obvious that in this demonetization drive not each and every single note in circulation would be returned. The notes not returned would obviously become public money in custody of the government, either in the form of Narrow Money (if notes not returned are re-printed) or Broad Money, and the government will obviously have to account for it. How this money would be accounted for is what should interest the anchors. Will it be used for recapitalization of banks? If yes, it means the banks will wipe out their NPAs with this infused capital. These NPAs have been created by wilful defaulters like Mallya, who are sitting pretty offshore with their offshore accounts. In effect, the common man of this country would be undertaking enormous distress over the next month and a half to wipe out the NPAs of the wilful defaulters like Mallya. 
The opposition has a duty to ensure the passage of law restraining the government from using the public money generated from this exercise for wiping out the NPAs of the banks, irrespective of the corporate. The corporate can go to hell, and with them can go to hell those anchors who wouldn’t ask the difficult question to the government as to what will be done with this public money. The common man is not standing in queues to wipe out the NPAs of the Mallyas. 

Comment Dt. 14.11.2016
How can the government demand people to open bank accounts, move towards a cashless economy, and deposit all their money in banks when they are running NPAs of Rs. 6 lakh crores? Banks don’t guarantee safety of all deposits. They guarantee only the insurance amount, which is Rs. 1 lac per account. So, every person has a right to keep his money in cash, and, in India, where the banking system has NPAs of Rs. 6 lakh crores, it is rather prudent to keep safe cash. However, this demonetization exercise has seized all cash, in spite of the promise of the RBI governor on the bank notes itself to pay the bearer the sum of money equivalent to the value of the currency note. This means the exchange of old notes with the new notes should be seamless and immediate. There just can’t be any restriction on the exchange of money. It seems some notifications have been issued under the RBI Act to restrict the exchange of money, which notifications are prima facie illegal. However, the worst is that not only is there a restriction on the one time exchange of money to Rs. 4000/- per person but also the banks have added their own gloss restricting the exchange per person to once only and that too only to those who hold bank accounts with them. This is grossly illegal.

Comments Dt. 12.11.16
1. I don’t understand why Kejriwal makes such wild allegations without proof. Upsurge in deposit can mean anything. If you have proof, present it; don’t speculate. This only helps the government to obfuscate the real issues. The most relevant issue right now are two: 1. Why did the government show so much of abruptness in this operation? 2. What is the government going to do with the black money recovered from this operation? Will they use it for recapitalization of ailing banks? If yes, it is a very big scam! 
2. Well…it is serious. I think the distress being caused to the people is deliberate. The money scarcity has been created deliberately to ensure non-availability of exchange money for the old currency notes, so that the maximum possible number of old notes may not get returned. I am more than sure now that this is being done to infuse capital into the banks to take care of their NPAs caused by the richest. This is a very crooked move.

Comments Dt. 10.11.16
1. The news is that the Madras HC has dismissed the petition seeking stay on demonetization on the premise that demonetization per se is good. I don’t know what were the grounds of the petition, but the facts speak for themselves. This is no way to carry out demonetization. Infusing blood into an anemic patient is good, but, for that, you don’t suck blood out of the poor per force. Without any fear of contempt of court, I say this judge, whoever he is, is biased towards the government. No disinterested judge can dismiss a petition in this manner when there are so many infirmities in the whole operation of demonetization. In fact, the demonetization has created a liquidity crunch, which is indeed a financial emergency — people don’t have money to buy food. The government needs to come out with a white paper stating circumstances leading to this financial emergency. And if this has been done to promote cash less economy, as the FM is saying, this is a clear case of corruption because this move will certainly benefit a few cash wallet companies but at the cost of a billion poor Indians. No, I don’t think this can be the reason. No government can be so stupid. This government needs to publish a white paper!
2. Estimated value of 1,000 and 500 Rs notes in circulation = 14.18 Lakh Crores
Estimated NPAs of the Banks: Rs 6 Lakh Crores
Difference: 8.18 Lakh Crores
So, if the RBI is returned 8.18 Lakh Crores of 1,000 and 500 Rs notes only, it can very well wipe out all the NPAs of the banks. In other words, the so-called black money of the rich will whiten the blackest money of the richest. Damage: extreme distress to the poor.
The opposition should immediately demand that not a single penny of the black money recovered in this operation will be used for wiping out the NPAs of the banks and should also ensure the passage of a law for the same. This government shouldn’t be allowed to function for a single day till such a law has been passed.

Comments Dt. 09.11.16
1. Today, I saw long queues outside the petroleum pumps, and yesterday, outside the ATMs, interestingly, not to withdraw but to deposit money. This shows what kind of ……. inhabit India. This man is restricting people’s ability to spend in cash to Rs 2000/day, and the people are depositing whatever cash they have: it might not be legal to trade in 500 and 1000 Rs notes, but the notes have not lost their values. So, what’s the rush to deposit them. No wonder Modi is the PM. Incredible! This is so so stupid a move, but the people in India are the least bothered. Rather they are euphoric! Scary!
2. “I promise to pay the bearer the sum of five hundred rupees” (signed Raghuram Rajan)
When I took 21 such notes to the bank today, they said, “Raghuram Rajan’s promise doesn’t matter anymore. We will not pay anything today; come tomorrow; we will pay you Rs 4,000 only; however, you can deposit the remaining notes with us at your own risk beyond the insurance of Rs one lacs.”
I said, “I already have one lakh rupees deposited in your bank.”
They said, “Hard Luck”!
I said, “Is there any law authorizing you to do that?”
He said, “No, but it is the personal promise of PM Modi.”
I said, “Oh f….! Didn’t he promise Rs 1.5 mn too? What’s the worth of this promissory note issued by Modi, albeit without my consent.”
I wonder why nobody is taking Modi to court for fraud? Well…may be because when you do that a lowly magistrate bars you from entering the court forever. DemocracyRIP!

Comments Dt. 08.11.16
1. The withdrawal of 500 and 1,000 notes is not because of black money control or whatever. A huge amount of counterfeit notes have entered India. The problem is so big that all notes are being withdrawn abruptly. This is the worst PM till date. Can trading of these notes stop starting tomorrow? And what worse! The banks and the ATMs have also been closed tomorrow. Tomorrow will be a nightmare for the people. The people will want to withdraw smaller denomination notes, but the banks will be closed. Has RBI already printed equivalent currency in smaller or newer denomination? Why so much of abruptness? Even if it had to be so abrupt, why the banks and ATMs have not been filled with newer denomination notes to ensure smooth exchange? Why so much secrecy? What would have happened if the announcement had been made a week in advance? And why hide it from your own senior bank officials? Why so much non-transparency? Is this a government or a joke? What were the sleuths doing till now? Were they sleeping? And if this is to curb black money, why introduce 2,000 Rs notes? There is a limit to making fool of people.  This is so ridiculous that there are no words to describe it.
2. I have a feeling that he has also decided to go in a full-fledged war with Pakistan; therefore, this abruptness. If this man is not removed immediately, things will get out of control. He just doesn’t have it in him to be a PM, period.
3. BTW, no black money will be wiped out. A new business of commission agents will start, who will accept 500 Rs notes and convert them into 100 Rs for a commission. Of course, this would be illegal, but so is the black money. Don’t ask me what they will do with these 500 Rs notes.
4. This will also help him in UP, where both the BSP and the Yadavs are dependent upon black money and have less access to the international money. Whereas the BJP has too many NRIs abroad, and they do generate lots of foreign funding. Recently, foreign funding to political parties has been made hassle free.
5. The desh bhakt anchors are nevertheless diligently praising Modi. The biggest desh bhakt Gaurav Sawant of India Today, who also runs a desh bhakti  program at 8.30 PM every evening, says the new move will make the tendering of counterfeit notes invalid. Desh bhakti ka matlab yeh nahi ki dimaag ka istimal hoga hi nahi. Counterfeit notes, as the name suggest, were never a valid tender. Mr. Desh Bhakt, were you using them?
6. This is the biggest opportunity for the opposition, given almost on a platter. Neither Paytms nor RuPays can replace cash. The ATM withdrawal limit of just Rs. 2000/day can and will create ruckus. I wonder how the opposition will exploit this situation. This is a litmus test for RG. Will he toe the line of a few corporates and wouldn’t initiate the informal channels of his rank and file? Or, will he exploit this to the maximum? Modi has chewed far more than he can digest. 

 

Copyright 2016-2017 Ankur Mutreja

Feature Image Credit: Kottakkalnet (https://commons.wikimedia.org/wiki/File:Currency_demonetization_in_india_2016_20161111_144732665.jpg)

 

About the Author

Ankur Mutreja
Ankur Mutreja is an advocate-cum-writer, and his blogs are amongst his modes of expression. He has also authored six books: "Kerala Hugged"; "Light: Philosophy"; "Flare: Opinions"; "Sparks: Satire and Reviews"; "Writings @ Ankur Mutreja"; and "Nine Poems"; which can be downloaded free from the links on the top menu.

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