I have listened to both the planet money episodes (I love Planet Money podcasts). I'm from India, living in US for more than 10 yrs. So I kind of have enough perspective of how Demonetization is seen within India and from outside India, including based on knowing personally who benefited or got screwed by demonetization, and who were left unscathed.
Must say, with what I have known about the medium and long term after affects of demonetization, I found NPR / Planet Money's research / info in the podcast terribly biased. This bias is sort of ironic since it is from a radio station that is very pro-democrat from a country that keeps harping about "Trump won because Russia" even though the process was as democratic as it could be.
Like NPR, NYT is also extremely biased against the current Indian administration, while simultaneously being subtly (sometimes overtly) anti-Hindu / anti India.
I sincerely listened to the Planet money episodes hoping to find some genuine shortcomings of the demonetization process, but was totally disappointed at the kind of propaganda based content they came up with! Sadly, NYT does the same with this piece of writeup.
There are many, many +ve effects (short, medium term) that I can talk about. But the main -ve point of this whole process is that one round of demonetization is not enough. A few more rounds of demo, and crooks will have enough fear in even accepting cash for bribes and probably will need to resort to barter system.
I personally know many who stashed illegal unaccounted money in gunny bags, and have suffered a blow to their wealth (as I wished) and I know a few who have had their black money stash replenished partially after a year of demo.
In either case, it was very heartening to see those who slept on mattresses made of cash suffer and struggle.
I don't think the news articles are biased, in fact it properly reflects the current state in India.
I was a strong supporter of Modi during the elections and through the demonetization process. But as I see the rich who had tonnes of cash were able to exchange most of the cash without lot of issues. I am sure there were long lines, it was inconvenient, it was stressful - but most of the cash got exchanged. I heard about a lot of people who used the 2 lakh tax-free income limit to deposit the cash and get it back (basically if I have 1 crore in black money, all I have to do is find 50 poor people and deposit 2 lakhs each into their accounts. Once deposited the rich person can get the money back in new bills and they pay the poor guy some cash for his trouble - trust me it's not hard to find poor people who are willing to take this trouble). The government can't question the poor guy because he's within his 2 lakh limit and need to have to show any proof where it came from. The rich is happy and the poor guy is also happy.
Now, people lost trust in the banking system, there are limits on withdrawals, ATMs out of cash, no one wants to deposit the money back - everyone wants to hold on to their cash. If people don't deposit cash, banks can't lend (btw, banks are writing off crores of money as NPAs already, that's another problem) and ultimately the economy will stagnate.
Personally I think this experiment was done with good intention to curb all black money and move over everyone into banking system - but not thoroughly thought out and it's a failure.
Not denying your or anyone’s right to opine about whether NYT , NPR are biased or propaganda based not. You are certainly entitled to your opinion about their biases (so am I). I was just giving more perspective about how I view the issue and the reporting related to the issue in the international media, specifically liberal / pro democrats media in the US.
“Most people lost trust in banking after demonetization” seems to be widely reported, but hardly supported by reliable data. Though I believed such reports during the initial days of demo, anecdotal evidence (based on friends, relatives, ex colleagues and contractors I have worked with) seems to be that the trust seems to be strong enough for those who never evaded taxes or those who wanted to pay taxes honestly, but never bothered to deposit cash in account.
If anyone says demo was a success in solving the black money problem I’d say that’s not true. But demo, combined with GST, RERA and a bunch of other initiatives have really pushed India towards a less tax evading future, which can only mean lesser taxes in the near future since the tax net cast is much wider.
> But the main -ve point of this whole process is that one round of demonetization is not enough.
1.5 million jobs were lost during the first four months after demonetisation. And you'd like to see it repeated a few times for the sadistic pleasure of seeing a few rich people suffer. But even that will not happen because the rich people I know have converted their cash to gold bars and more real estate.
I know a few construction contractors who were paid up for all the dues of previous years and were paid for the next few years projects in advance. Now, these are the kind of stories that won’t come up in the news, but in this case specifically many many jobs were saved because people with cash were clearing past dues and paying up for future.
Number of jobs lost is always a debatable number, so I’d prefer not to argue on the specifics.
Converting to gold bars and real estate is good. Makes sleazy transactions painful and inefficient. Easier to track.
That demonetisation was a huge negative for the Indian economy is not up for debate anymore.
Your anecdotal accounts of people getting paid in advance count for nothing against the millions of people who didn't get paid for past work and the millions of people who didn't get work that was scheduled to happen because nobody could pay. Markets were deserted, no goods were selling. This shit went on for months. Everybody who actually lived in India during the time saw this happen.
My anecdotal evidence is not acceptable but your generalized statements (without even an anecdotal evidence) is acceptable?
I agree it was a shock to the system in the short term, and that it wasn’t as effective as everyone expected it to be. But it has certainly brought many many people into the tax fold. This means better tax compliance and more money available for infra.
I don't know if you know what constitutes 'evidence'. Saying you know a few people to whom it happened does not make it evidence of any sort. I also know people who stopped getting construction work, and shopkeepers who had dismal sales for months. Now is what I said backed by evidence?
Bringing people into the tax fold means nothing if most people are added to the bottom tier where they pay nothing or very little tax. The IT department does not have the resources to audit and pursue everyone who filed nominal taxes in the financial year following demonetisation and is now reporting income below the taxable threshold.
And growth in actual direct tax collection this year up to July 31 has been dismal.
We'll soon see what the extension up to August 31 netted. Unless there is a miraculous jump in collections in August, the entire 'we ended up collecting more income tax because of demonetisation' shtick will have fallen flat.
>I personally know many who stashed illegal unaccounted money in gunny bags, and have suffered a blow to their wealth (as I wished)
I'm sorry, but the RBI data counters precisely this point.
As you know, 99.3% of the cash has returned. Almost no one suffered any blow to their wealth in terms of "losing cash stuffed in gunny bags" as per the RBI; it's all back.
I believe the current govt and RBI are being dishonest (probably for the good of the country) and are lying about the 99.3%, because there are enough strong rumors that the earlier regime resulted in unaccounted duplicate numbered currency notes. Which means, even if banks received more than 100% of genuine notes back, they cannot report it saying so.
And if that rumor is not true, then there is enough data to track how many in India became overnight lakhpatis (those with more than 100,000 in their account). Now if RBI has enough tech chops to crunch that data and keep an eye on it, they can easily find the top 1K or 10K evaders and go after them. Are they doing it? I'm not sure. But they have enough evidence in hand.
As the data shows 99.3% of the cash returned. This doesn't include Grameen banks. So the number maybe more. Percentage of black money has increased. The amount of cash transactions with respect to digital transactions has also increased. Demonetization is a total disaster and I can't forgive Modi for making the country suffer like this and taking 100 lives for nothing.
Man, I don’t know about the damn thing itself, but all the Indian comments on the Internet have been close to conspiracy theory. Everyone is biased and telling lies, if we only listened to X y Z. Etc etc
Why say bhakti and not, for example, devotion (which is what bhakti means in Hindi).
Because bhakti is not an English word. And one of the things which congress followers mock is the use of local language, which is what the BJP leaders tend to use. After all, their own leaders usually struggle to speak any local language at all, being more comfortable in English, being mostly Cambridge and Oxford educated, or out of Doon school. Another St Stephen's alumnus, Mani Shankar Aiyar, famously called Modi a chaiwala. Modi of course, had very little education and is mostly self taught, not having been born with a silver spoon in his mouth.
So by using Hindi words in a mocking manner, the intention is to mock those leaders who use Hindi or other vernacular languages for communication. Whether this is a way to win hearts and minds remains to be seen.
Must say, with what I have known about the medium and long term after affects of demonetization, I found NPR / Planet Money's research / info in the podcast terribly biased. This bias is sort of ironic since it is from a radio station that is very pro-democrat from a country that keeps harping about "Trump won because Russia" even though the process was as democratic as it could be.
Like NPR, NYT is also extremely biased against the current Indian administration, while simultaneously being subtly (sometimes overtly) anti-Hindu / anti India.
I sincerely listened to the Planet money episodes hoping to find some genuine shortcomings of the demonetization process, but was totally disappointed at the kind of propaganda based content they came up with! Sadly, NYT does the same with this piece of writeup.
There are many, many +ve effects (short, medium term) that I can talk about. But the main -ve point of this whole process is that one round of demonetization is not enough. A few more rounds of demo, and crooks will have enough fear in even accepting cash for bribes and probably will need to resort to barter system.
I personally know many who stashed illegal unaccounted money in gunny bags, and have suffered a blow to their wealth (as I wished) and I know a few who have had their black money stash replenished partially after a year of demo.
In either case, it was very heartening to see those who slept on mattresses made of cash suffer and struggle.