its a good decision to curtail black money and/or fake currency. However, with most people recieving their payday just recently, I dont know...
Demonetisation and its Aftermath
- Thread starter psyph3r
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Many elderly people who have their accounts in nationalized banks won't have either credit or debit cards. I know because even my mom, uncles and aunts all have only ATM cards. Such people do keep some cash in the reserve, but that cash becomes invalid all of a sudden tonight. There are also lot of such people who live alone without anybody nearby who can lend them a credit card. In fact, both my maternal aunt and a uncle have no children and live with just their spouses. I agree that there is a 72 hour relaxation window for hospitals, but after that, hospitals won't accept these notes and banks/ATM's have withdrawal limit of 20k/week. What if somebody like that has to deal with an emergency at a time when all the money they have in reserve is invalid and they could not withdraw sufficient amount from bank/ATM due to the withdrawal limits.
psyph3r
Skilled
You aren't affected either but you're making a lot of assumptions there including the number of people who'll be adversely affected by the move, I'd say the number of tax evaders who are stressing out atm are greater than the people with genuine problems.
Maybe there was a reason to do it like this considering how messed up things are in our country, it's either silly or frightening to assume that the govt. is this incompetent to not take all of these concerns into consideration before pulling off such a drastic move.
Some have friends and family so they'll manage, the poor don't even have money in the hundreds so they won't be affected. No one's denying the amount of inconvenience for the next week or two (again depending on how it'll all work out) but you can't expect smooth transitions with things like this, I couldn't believe this was actually going down but I personally know a lot of tax evaders so it makes me happy that this came out of the blue.
Definitely not a good time for people going through problems but they'll make it through.
Apparently RBI had issued circulars well in advance but let's wait and watch, we'll all chime in if sh*t goes down.
This is obviously gonna have a lot of implications including one on the upcoming UP elections, those rogue politicians cannot move loads of cash this time around to buy out poor uneducated voters.
Maybe there was a reason to do it like this considering how messed up things are in our country, it's either silly or frightening to assume that the govt. is this incompetent to not take all of these concerns into consideration before pulling off such a drastic move.
Some have friends and family so they'll manage, the poor don't even have money in the hundreds so they won't be affected. No one's denying the amount of inconvenience for the next week or two (again depending on how it'll all work out) but you can't expect smooth transitions with things like this, I couldn't believe this was actually going down but I personally know a lot of tax evaders so it makes me happy that this came out of the blue.
Definitely not a good time for people going through problems but they'll make it through.
Apparently RBI had issued circulars well in advance but let's wait and watch, we'll all chime in if sh*t goes down.
This is obviously gonna have a lot of implications including one on the upcoming UP elections, those rogue politicians cannot move loads of cash this time around to buy out poor uneducated voters.
It is an inconvenience, but I'm sure people can find their way around. I wholeheartedly welcome the move. If people do not panic, everything should be alright. Banks like SBI have already assured to work round the clock to help cope the transition.
eternoMind
Skilled
No matter when it was done, some level of problems would have been inevitable simply because of the nature of the change. I remember my father recounting a tale of how a similar number was done on 1000 rs. notes back in the late 70s or 80s and there wasn't enough time for most people to even know about it. Of course, 1000rs. back then was huge and most of the general populace didn't even have access to those kinds of denominations.
No amount of preparation is going to help with long lines and crowds. A greater window till actual implementation would have allowed people with unaccounted money to salvage as much as possible by whatever means.
First income declaration scheme and now this; seems logical now. Interesting to see what next.
Also, even I don't buy that the gov/RBI took this decision without factoring in all situations.
@Lord Nemesis pessimistic and fatalistic as usual. People with not even a quarter of your brains can come up with the many more possibilities debunking this move. I grant some of them seem like a real worry as of now but I'd wait before passing judgement.
No amount of preparation is going to help with long lines and crowds. A greater window till actual implementation would have allowed people with unaccounted money to salvage as much as possible by whatever means.
First income declaration scheme and now this; seems logical now. Interesting to see what next.
Also, even I don't buy that the gov/RBI took this decision without factoring in all situations.
@Lord Nemesis pessimistic and fatalistic as usual. People with not even a quarter of your brains can come up with the many more possibilities debunking this move. I grant some of them seem like a real worry as of now but I'd wait before passing judgement.
Yeah, I may not be affected, but lets not ignore the severity of impact that some people may have to face because of this silliness of not giving enough notice. You cannot generalize and say the impact would be minor just because its minor for you and a few other people around you.
I myself live alone (presently) and have been sick for last few days and just recovering. I have no cash on me right now (only have 2500 Rs in 500 notes and another Rs 70 in change) and I was supposed to buy medicines and few provisions tomorrow for which the change I have left (apart from 500 notes) is not sufficient. I am not sure if the medical stores and the kirana stores are covered under the 72 hour relaxation since only hospitals and co-operative stores are mentioned for that. If they don't accept 500 notes, I will have to go to a bigger medical shop and super market that accept credit card and buy enough stuff to cross the minimum limit.
You would be surprised by how unplanned and haphazard manner things are done in our country even when a topic has been under discussion for years. I am not going to hold my breath in hopes that this would be drastically different.
Being practical minded to consequences of a stupid decision does not equate to pessimism. Mind you, I am not saying that removing these currency notes is a bad move, but the way its being done before being ready is a serious concern. What is the need to close ATM's for 2 days and bank for one day if they are so ready for it? If they were ready, they should have replaced all the invalid tenders in the ATM's last week itself and get the banks ready before announcing the same to the public.
People with not even a quarter of my brains would still be able to grasp the potential consequences of reverting over night the validity of one of the most common denominations of currency people get from ATM's and banks across the country without enough prior preparedness and then closing the ATM's and banks for next couple of days. They would not think its such a good idea.
As I said, the best outcome that I can see is that this is squashed by the courts tomorrow and ask the govt to do it once they are ready without having to close banks and ATMs or severely limiting the withdrawal limits.
psyph3r
Skilled
https://www.reddit.com/r/india/comments/5btv1v/eli5_what_the_abolition_of_500_and_1000_rupee/[DOUBLEPOST=1478634854][/DOUBLEPOST]
Again you're just assuming they haven't taken any of it into consideration, they've already played the National Security issue card on this one.
Chaoseater
Adept
I am happy about the master move by Modi Ji. I feel happy to have voted for him. But another dark side would be where all politicians especially the UPA government would suffer for the next elections as far spending is concerned w.r.t Campaigning. Also, this move would be brownie points (advertisement) to Modi Government gaining votes for next elections except in some cases business class people. Thereby, securing his next tenure as a PM.
Also, ban is imposed now. What would be situation after one year, by then we ll have Rs.500 and Rs.2000 notes and people may have paid bribes by then and Public authorities wiould have hoarded black money. Then again he pulls a card imposing ban on same Rs.500 and Rs.2000 notes. This would not faciliate any business or any foreign investments. Just my thoughts on this decision.
Also, ban is imposed now. What would be situation after one year, by then we ll have Rs.500 and Rs.2000 notes and people may have paid bribes by then and Public authorities wiould have hoarded black money. Then again he pulls a card imposing ban on same Rs.500 and Rs.2000 notes. This would not faciliate any business or any foreign investments. Just my thoughts on this decision.
Yeah, its meant to punish the black money hoarders as they would not be able to go to banks and deposit.
But also at the same time, this gives the additional opportunity/possibility for taxing the tax payers again on money for which they already paid their taxes.
For instance, I pay all my taxes. From my savings after the taxes, lets say that an year or two ago, I withdrew 1 Lac to keep as reserve cash for emergencies. Over this period, this cash is stagnant and unlike a bank deposit does not generate any interest, so there is no additional tax to pay. But now, I have to deposit that amount in the bank again. How do I prove that this amount is already tax cleared and not new income generated this year or income from an unknown/undeclared source? So, theoretically, the IT dept can demand tax on this amount again. Not sure if they are going to go that route, but they could if they want to.
BTW, did anybody else get the certification of appreciation from CBDT for paying taxes fully and on time? That's another gimmick this year. Apparently, 8.43 lac certificates were sent out which makes up 6.5% of the 1% tax payers in the country.
But also at the same time, this gives the additional opportunity/possibility for taxing the tax payers again on money for which they already paid their taxes.
For instance, I pay all my taxes. From my savings after the taxes, lets say that an year or two ago, I withdrew 1 Lac to keep as reserve cash for emergencies. Over this period, this cash is stagnant and unlike a bank deposit does not generate any interest, so there is no additional tax to pay. But now, I have to deposit that amount in the bank again. How do I prove that this amount is already tax cleared and not new income generated this year or income from an unknown/undeclared source? So, theoretically, the IT dept can demand tax on this amount again. Not sure if they are going to go that route, but they could if they want to.
BTW, did anybody else get the certification of appreciation from CBDT for paying taxes fully and on time? That's another gimmick this year. Apparently, 8.43 lac certificates were sent out which makes up 6.5% of the 1% tax payers in the country.
Pharmacies and hospitals can accept 500 & 1000 notes ; it seems like a planned move. Most essential services seems to have been exempted which is good.
We need to do our part to support the Watchman, Driver & Maids etc who have recently received a salary in those denominations ; we need to educate and support financially for the time being if need be. We may not be fighting on the border but not doing our bit to support such a great nation building step is unpardonable.
The element of surprise was very much needed, else hoarders would have planned and circumvented the impact. The way it has been kept a secret till D-day is really remarkable achievement in itself, Full marks for the government.
BJP is actually hitting its own voting base ; the mid and small traders, I don't know how bad that is going to affect the elections. Its truly putting the Nation First by the PM, irrespective the impact on his party's image, 3 cheers.
Finally, Samsung is not the only one who's recalling the NOTES this year !!
We need to do our part to support the Watchman, Driver & Maids etc who have recently received a salary in those denominations ; we need to educate and support financially for the time being if need be. We may not be fighting on the border but not doing our bit to support such a great nation building step is unpardonable.
The element of surprise was very much needed, else hoarders would have planned and circumvented the impact. The way it has been kept a secret till D-day is really remarkable achievement in itself, Full marks for the government.
BJP is actually hitting its own voting base ; the mid and small traders, I don't know how bad that is going to affect the elections. Its truly putting the Nation First by the PM, irrespective the impact on his party's image, 3 cheers.
Finally, Samsung is not the only one who's recalling the NOTES this year !!
kidrow
Adept
Thanks for replying. I thought as much, but was confused by all the brouhaha. It made me wonder if there is some long term impact that I'm ignorant to.[DOUBLEPOST=1478663354][/DOUBLEPOST]
Thanks for replying. Unfortunately, I couldn't really get a concrete enough answer like you usually do on ELI5. It's more of a discussion at this point, rather than a succinct explanation (unless I missed something).
If you can remember, when/where/how you withdrew that amount (of course you would have, since it is white), you can show that transaction on your bank account details. Would not that clear it up...?
saumilsingh
Skilled
I was thinking the same. A surprise move that didn't allow much room for planning seems like the entire point.
Otherwise what's the use if the big time hoarders can slowly convert their black wealth over months via their hundreds of lackeys each armed with an individual Aadhar card.
rdst_1
Skilled
So, I live in a rural area where it is quite hard to find shops which accept cards. Yet, I think, since the banks are only closed for only one day, this is going to be a smooth transition. For today, the day the banks are closed, shopkeepers are not going to say no to accepting 500 and 1000 notes. They can get them exchanged the next day themselves.
As for the Rs. 20000/wk ATM limit, I think LN, you are forgetting that you can also walk into the branch and make a cash withdrawal just like old times.
Actually, I think that we should phase out old notes at regular intervals as that will definitely discourage hoarding of black money.
As for the Rs. 20000/wk ATM limit, I think LN, you are forgetting that you can also walk into the branch and make a cash withdrawal just like old times.
Actually, I think that we should phase out old notes at regular intervals as that will definitely discourage hoarding of black money.
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