Blackmoney: Govt. listened to us on Tipoff email id

On 15th November in our article titled "Blackmoney: Politics & Way Forward" we had suggested that "The Government can setup toll free numbers, email ids and fax numbers dedicated to unearthing black money where any person can send a mesage about instances of blackmoney generation".
http://arjunaubacha.blogspot.in/2016/11/blackmoney-politics-way-forward.html

The Government has in fact listened and created an email id blackmoneyinfo@incometax.gov.in where people can send email to tip off the authorities about blackmoney.

It is a good way for the tax authorities to get information on blackmoney. However, given the paucity of staff, whether they can really act on it or not is another question. The Government may try to find out the names from these tip offs and match with their database to see if they need to take action on these guys. If there is concrete information provided in the tip off email, then I think it would be easier for the Government to take action. Generally the informant is paid 20% of the amount recovered. However, whether Government will do so based on the tip off email is not known.

Technically, any undeclared wealth is blackmoney. So whether income tax authorities will be interested in the small blackmoney offenders or not is not known. For example, recently there was a petition by people saying that the landlords should be caught as they insist on house rent payments in cash. In many cities the house rent is completely in cash. In cities like Delhi, the house rent is divided into two parts and two cheques are taken often in the name of landlord and his wife. One is shown as rent and the other as rental for lighting and other fixtures. And a third part is taken in cash in lieu of water bills. Though Delhi Government charges a pittance for water, often the landlord has to run his motor pump to pump water from the municipal pipeline and fill his overhead tank. These charges are often 60,000 and above per year per flat. Will the IT department prosecute a landlord for couple of lakhs of undeclared income per year?

Remember that there are millions of such landlords throughout India. Brining them under the tax net will result in more income tax for the Government and that can help lower the tax net.

However, there is also a negative side to the story. These information on the hands of unscrupulous Income Tax officials will only result in extortion for personal benefits and can create an era of uncertainty due to raids. People can also send false information in the tipoff email to implicate someone. So the Income Tax authorities need to do a thorough job.

The main question before us is the blackmoney generation by various businesses which are outside the tax net. A tea stall owner in bangalore sells tea at 15 rupees per glass and sells about 500 glasses of tea in the evening. There are also other snacks. So this small tea seller earns minimum 20 lakhs per year just from tea. Add the income from snacks like biscuits, samosas etc. These are all sold in cash. Ofcourse they are starting with PayTM as well. A plainclothes taxman standing infront of the stall in an afternoon can give very accurate results for their assessments. Sending information about such businessess should be encouraged in the tip off email id blackmoneyinfo@incometax.gov.in . Unfortunately, people feel that these are small shops and they won't report against them. If such businesses can also be brought under the tax net then it would be good for the economy. So guys and gals keep on sending emails to the Government about blackmoney.

Demonetisation: Income Tax department faces massive challenge

The fact that Notes Ban is more work for the honest and an opportunity for others is being proved time and again.

The #NotesBan announced on 8th of November resulted in unprecedented chaos. People have waited in huge queues to deposit their old 500 and 1000 rupee notes. There were initially huge lines to exchange these notes till the Government rescinded on their promise and stopped the notes exchange. There is still a huge queue infront of ATMs whenever money is loaded in the ATMs as most of the times there is no cash in the ATMs as well as in the banks.

There were indeed some people who had undeclared income stored as cash and they were initially stunned. But later they found out easy route to exchange their old notes by giving commission. Overnight a cottage industry sprung up to exchange old notes. Unscrupulous bank employees and Income Tax commissioners have teamed up to exchange old notes. So the people pay anywhere between 30 to 35% to exchange their notes.

The Government came out with Scheme to penalise people by charging a tax of 50% on their unaccounted deposits in the banks and these money had to be locked for 4 years. Obviously people prefer to pay commission as it is cheaper and also no one now believes that the Income Tax authorities won't harass them later.

In the Income Tax department the honest employees and the lower level staff are not involved in these commission business. They find that there is much more work involved due to the #Demonetisation .  Two income tax staff associations have now written letters to the Prime Minister Mr. Narendra Modi. Income Tax Gazetted Officers Association and Income Tax Employees Federation have said that Personnel and Infrastructure are severely short.

They have written that "The entire department is totally demotivated due to the huge shortage of manpower in lower cadres and huge stagnation in officers's cadre. Must have adequate manpower, especially at key positions, be provided with proper infrastructure facilities so that the workforce stays motivated, committed and highly spirited at this moment".

Clearly it would be a tough task to inspect all the bank accounts. The Income Tax department can ofcourse generate and send queries to lot of people. However, following up their responses and deciding on those would be a massive challenge. That is not going to happen soon enough for the Prime Minister to get political mileage. So there is indeed lot of Psychological warfare inform of announcement threatening people of dire consequences if they don't announce their blackmoney. Read more: http://arjunaubacha.blogspot.com/2016/11/psychological-warfare-in-demonitisation.html

It seems to be strange that the team briefing the Prime Minister never thought about these issues before strongly suggesting the PM to go for demonetisation. 

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Demonetisation: Human behaviour is like War

Prime Minister Narendra Modi has equated demonetisation as war, a war against blackmoney. Recent events prove that people believe Mr. Modi that this is war and are behaving as such.

The ban on Rupees 500 and 1000 notes has indeed created a warlike situation. The huge inflation during the UPA days, when food inflation was around 18%, had resulted in greater requirement of 500 and 1000 rupee notes. So when the Government announced that all the 500 and 1000 rupee notes had to be deposited in the banks, people were forced to deposit those. And since new notes were not printed, the Government only allowed people to withdraw 2000 rupees per day from an ATM, if you were able to beat the queue.

The situation is very tough as people don't have cash in hand. Most of the economy runs in cash. People often stand in queue in front of the ATMs for hours and return empty handed when the ATMs run out of cash. So there are frequent fights, fisticuffs, hurling of abuses at each other and at bank staff that goes on. A recent report also brought out the further ugly side of people. One person in West Bengal while standing in a queue fainted and the people didn't care to pick him up. The person lay there for 20 minutes before police found and shifted him to a hospital where he was declared brought dead.

In a war zone people don't grieve over dead bodies as they don't have time to retreat in view of the approaching army. They just move on to save their lives. Their survival instincts take over and ensure that they can do anything to survive. In one instance of a airline crash, the survivors were known to have turned cannibals and ate the dead people.

Our present situation has become similarly bad. Scarcity has induced a warlike situation and now people don't care to help someone who is exhausted and falls down resulting in deaths that could have been avoided.

Life and death has no value for people today. Concern for life has vanished. The cash scarcity will continue for many more months as some reports say that the total capacity to print notes is only 300 crores a month whereas the total number of notes to be replaced is 2300 crores. Since this situation will remain for atleast six months, there may be longterm implications as people will henceforth get used to only thinking about themselves and not concerned about others. A community succeeds if it stays united. When people lift each other up, then society moves up. When people only mind their narrow selfish interests, it causes great harm to society as the society is torn apart. In such times, it is easy to sow seeds of conflict. Government should be worried that terrorists can take advantage of such conflicts.

Is Mr Modi soft on Blackmoney holders?

The Modi Government had run a Income Declaration Scheme (IDS) for people to declare their black money. The deadline for IDS 30th September. 64,275 people had declared black money under the IDS scheme totaling to Rs. 65,250 crores. The penalty under this scheme was fixed at 45%. So it was expected that the Government will get 29,362.5 crores under this scheme.

This had made the Modi Government tom-tom its success. It was said that this is much bigger than the Voluntary Disclosure of Income Scheme (VDIS) run by the Congress Govt. in 1997 as VDIS had got 33697 crores from 4.72 lakh people. At that time the Government had got tax of 9,729 crore under VDIS.

Though the Modi Government was declaring success vis-à-vis the previous VDIS, one should realise that the size of economy today is way bigger than in 1997 and the present value of 33,697 crore will be way much bigger.

Now, a series of events appear to blow a big hole in the IDS scheme.

First a person from Ahmedabad who was to pay a tax of 13860 crores declared that he didn’t have that money and had declared on behalf of others. However, other people didn’t give him the money to convert, so he can’t pay up. Next, a person in Hyderabad had declared 10,000 crores and it was found that he didn’t have even 1 crore and had just made up this story to get attention to his business.

This has resulted in the the total size of IDS declarations to drop by more than half and even smaller than the VDIS of 1997. It is to be seen how the Modi Government gives a positive spin to this disappointing news.

It should also be noted that last year, the Government had run a similar scheme for foreign blackmoney holders. There were only 644 declarations and only 2,428 crores of tax collection.

Now, the Modi Government has said that if anyone wants to declare their undeclared cash and deposits in the bank accounts then they will have to pay 49.9% tax. So this becomes the third disclosure scheme by Modi Government within a year.

Three voluntary disclosure of income schemes by the Government in such a short period of time is virtually unheard. People will lose their faith in the system and will feel that honest tax payers are being discriminated against. Blackmoney holders will feel that they will always get some more opportunity later and will be willing to take a chance.

This doesn't fit in with the narrative of a strong Government. The Government now appears to be begging before people. Mr Modi and his ministers should think hard why they are repeatedly failing.

Coercion to Go Cashless

The 9/11 moment of Modi Government banning Rs. 500 and Rs. 1000 notes from 9th November (mid night of 8th 00:00 hrs) not only paralysed the economy but also ensured social functions like marriages stopped due to lack of cash.

Since marriage is one of the most important social functions and Shri Narendra Modi was seen proudly claiming in Japan that even marriages have been stopped due to demonetisation, there was lot of brickbats and the Government then announced that any one person from a family having a marriage can withdraw Rs. 2.5 lakhs. However, that was not operational because banks had not got guidelines from the RBI to release funds for marriage. Currently people are only allowed 2000 rupees to draw from their savings accounts via ATM.

Now the RBI has sent its operational guidelines for dispensing RS. 2.5lakhs in cash and that has some shocking clauses.

being one an emotional The Modi Government with much fanfare announced that they are going to allow Rs. 2.5 lakhs withdrawal from your own bank accounts for marriage.

The person has to apply to the bank manager with proofs of advance payments already made towards the marriage for example booking of marriage hall along with the printed marriage invitation card etc. The marriage has to be on or before December 30th.

However, the most shocking clause is that the person has to mention whom the money will be paid and have to establish that those persons don't have bank accounts. So this cash expense can only be done to people who are out of the formal banking system.

If a person has a savings bank account, current account or Jan Dhan Yojana account, then money has to be paid by cheque or online transfer.

For example, if you are going to pay money for flower decoration, then you have to ask if the vendor has a bank account and then transfer money if he has. It is another matter that the vendor will have to pay cash for buying flowers from the women selling flowers on the street. Since the vendor have to pay cash to procure, he most likely won't accept the cheque from the person. Similarly there are many people who prefer to employ cooks to do the cooking themselves for the guests instead of giving the contract to caterers. So now visualise you buying paneer or cheese from the sweets stall who won't accept cheque. In some big cities, people the sweets stall owner may accept cheque but that is only in very few cases. You can create your own list and decide how difficult it will be for the person to do a marriage without cash.

The most important point here is that RBI is now clearly telling us that we are forced to use the banking system ie cheques, credit card, online transfer to make our payments and Cash is now pariah in this economy.

That is a very dangerous thing at this moment. US economy had credit cards since 1971. So people there use credit as second nature. In India, credit is seen as sin by many people and prefer to pay by cash. A minuscule portion of Indian economy is digital. Rest all is in cash. Insisting that we have to pay in cash is asking people to change their behaviour.

It would be easy for the educated people to do that. However, it would not be easy for others to do that.

Ethically it is not right to deny use of your own money. Government is the custodian of our money. So when you refuse to allow us to withdraw money from the banks, you are impinging on the rights of people. I can decide how to use my cash. The Government cannot just dictate that cash is bad. Unfortunately, that is precisely what the Government is doing.

Democracy doesn't run on coercion. Sanjay Gandhi realised it when he forcibly took people for vasectomy and tubectomy operations. That raised lot of hue and cry and India's family planning programme after that never made any progress. The Government should have understood that even good medicine cannot be forced down the throats of people, else they will rebel.

So what can Government do to increase use of e-wallet, online transactions?

1) The Government has to incentivise people to use online bank transfers, credit cards and cheques. When others see that there is an incentive in online transfers or cheque payments then they will prefer it.

2) Government has to do an e-wallet. Instead of allowing every bank to do one, it would be better if the Government comes out with an app. Instead of #PayTM which belongs to private companies with some 40% owned by Chinese (Alibaba is a chinese company), the Government has to encourage people to use a Government of India owned e-money app which can be named eRs . It would have all the security features and will also get the trust of people as it is Government owned. The Government can then tell people that they can get back say 1% as cash refunds if they use this app to buy and sell.

3) Ensure that first all property transactions have to be done through the above mentioned Government owned e-wallet say eRs. All highway toll booths to be only through the Government owned e-wallet. So the Government can immediately know the total income of each Toll vendor and hence the Toll vendor can't keep on charging forever. All railway travel bookings in AC classes to be started with e-wallets as well as all payments to Government to be done in the cashless mode. This will along with incentives for cashless mode will ensure adoption faster and help in smoothly moving to a cashless economy.

Psychological warfare in Demonitisation

The Government of India on 8th November night declared that the 500 and 1000 rupee notes are not legal tender from midnight that is effectively from 9th November. This 9/11 moment is as momentous in its impact on India as was the 9/11 attack on the twin towers of America.

If one looks at the messages emanating from the Government, much of it is warning to the public about the consequence of certain actions. It is a strange situation where the Government is consistently telling people to not to do certain things and if they don't listen then they will be prosecuted. If people are doing something wrong then they should be prosecuted. Lets analyse some of the warnings of the Government.

Since the Government announced that the Rs. 500 and Rs. 1000 notes are no longer legal tender and needs to be exchanged in the bank or deposited in the bank accounts, people have been depositing the money in the bank accounts. The Government then announced that any deposits in the bank accounts above Rs. 2.5 lakhs will be investigated. So some people started depositing only Rs. 2.5 lakhs in each account.

Then the Government warned that deposits in the name of housewives will be questioned ie the Government can question the source of funds.

It was reported that the Jan Dhan Yojana accounts that were opened and were lying dormant were being used to deposit upto the allowed Rs. 50,000. The Government warned that such deposits will be investigate.

Now the Income Tax department of Government of India has announced that if anyone is depositing cash in someone else's account, then these cases will be investigated under the Benami Transactions Act. The person whose account the money will be deposited will be treated as "benamidar" and the person who is the original owner of the money will be the termed as the "beneficial owner". Under the Benami Transactions Act all the persons involved are liable to be punished from anywhere between 1 to 7 years of rigorous imprisonment (R.I).

Why Govt. Creating Fear Psychosis:

The question that can come to mind is why the Government is trying to induce fear in people? Why this effort to create fear psychosis? The answer is two fold.

It Helps Political Narrative:

The first is the political narrative. The Modi Government hopes to utilise this as their big bang war on corruption and black money and use it to fight the UP and Punjab elections in early 2017. They believe, that the poor people will buy the argument that though they faced some inconvenience, they helped down in hunting the rich and the blackmoney holders. If a soldier can fight for the country, why can you not suffer this huge inconvenience for the betterment of the country, runs the argument. Since it gives the poor the vicarious pleasure of hunting the rich, it is a kind of a de-facto class warfare. Instead of directly proclaiming themselves as communists, Mr. Modi believes they can usurp the class struggle theme of the communists and get an entirely different class of voters cutting across caste and religious boundaries.

It is ofcourse a different matter that this chaos is resulting in a severe disruption of India's predominantly Cash only economy and the GDP is likely to contract. According to initial estimates the economy will take a year to come back to the days before demonitisation.

Income Tax Department will drown with work:

The Second reason for creating this fear psychosis is that the Income Tax department is not geared to handle this massive amount of work.

Only 2.87 crore Indians had filed personal income tax in the assessment year 2012-2013. Out of this 2.87 crores 1.62 crores didn't pay any income tax. So one can realise that the work of the Income Tax department is to analyse the data and work on this number.

Till last year there were some 31 crore bank accounts and then the Government is supposed to have added some 20 crore bank accounts under Jan Dhan Yojana. So roughly 50 crore savings bank accounts may be in India. Since the Government is forcing people to deposit the Rs. 500 and Rs. 1000 notes in the bank accounts, it is expected that the money will be deposited in many of these accounts. Due to computerisation it is easy to get data of high amounts of money deposited in the banks.

However, now the Income Tax department has to scan through data of deposits in atleast 50% of the bank accounts. I am assuming 50% because many of the Jan Dhan Yojana accounts are supposed to have been used by people to deposit money. So the workload of the Income Tax department is going to increase by atleast a massive 10-12 times. From roughly 2 crore plus accounts to some 25 or 30 crore accounts, the workload increase is going to be humongous. So it would be in their interest to discourage people to not deposit blackmoney in different accounts.

India with a population of 1.3 billion is much more than any other country except China. The sheer scale of work here is a challenge. To add to that challenge is this unprecedented action of the Government forcing people to deposit their cash in the bank accounts. One thing is for sure, neither the blackmoney holders can sleep in peace, nor the income tax guys will have any respite from work, work and more work.

Is possession of lot of old notes a crime?

Possession of lot of old notes a crime?

The Income Tax department is now conducting raids across the country based on tip-offs. In one case, in Delhi, a doctor was arrested when he was loading lot of cash in his car. A sum total of 69.86 lakhs was recovered from him in 100 rupee notes.

A man by the name Nazer-e-Alam was arrested in Delhi on Nov 18th with Rs. 1000 notes worth 96 lakhs. Alam was arrested under Section 103 of Delhi Police Act which is about possession of property for which no satisfactory explanation can be provided.

Though the above two cases appear to be same, however there is a big difference.

Technically, all our notes are legal tender. However, the Government on 8th November declared that Rs. 500 and Rs. 1000 are no longer legal tender. It is not known under what act this declaration was made. Though some may consider that Government declaring the notes not being legal tender is akin to Government reneging on its promise. Every currency note is a promissory note and is guaranteed by the Central Government. Nevertheless, that is not a point of discussion for this article.

When the notes are no longer legal tender, these notes are just pieces of paper. So When a man possesses a large amount of these notes like Nazer-e-Alam, technically he cannot be charged for possession of assets disproportionate to his known income. Neither can he be charged for possession of property for which no satisfactory explanation is provided because the notes he is in possession off is no longer legal tender. Since it is no longer currency and is worthless, unless and until deposited in a bank, technically any lawyer can successfully argue and rescue him.

The sudden declaration by the Government has caught many small time traders and businessmen with cash which has not been declared to the Income Tax authorities. So they are expected to use people couriers to transport such cash from one place to another. It is expected that some of them will get caught and will be tried under various sections. However, it would be interesting to watch how the prosecution will unfold.

However, when people are found with Rs. 100 notes which are perfectly valid legal tender, there would be no respite from the income tax authorities from prosecuting the arrested persons.

Indian economy predominantly runs on cash. Demonitisation cannot happen overnight. It would take sufficient effort by the Government to move much of this to digital cash. Not many people understand how to use e-wallets. Not many trust those as well. It would help if the Government of India comes out with an e-wallet which would be readily acceptable in all places. There would be trust factor if the Government steps in as the Government would be responsible for security. The Government though at the moment seems to be letting the PayTMs of the world run with the ball.

Notes Ban: Terrible Implementation shows no Planning

The Government of India order to declare the current Rs. 500 and Rs. 1000 notes as not legal tender has initially said as a well planned move against black money. Shri Arun Jaitley, Union Finance Minister as well as Shri Rajnath Singh, Union Home Minister has reiterated the Government stand that the Government had thought through the move and implemented it. However that appears to be complete hogwash.

It seems that the number of Rs. 500 notes withdrawn are 1570 crores. And 630 crores of Rs. 1000 notes were withdrawn by the Government order. The total capacity of Government of India's currency press is 300 crore notes a month. So it would have taken some 7 odd months to print replacement of Rs. 500 and Rs. 1000 notes. So the Government decided to print Rs. 2000 notes in lieu of Rs. 1000 notes. Nevertheless, it appears that it will take some 3-4 months atleast for the Government to fully print replacement currency. So the queues will last for a long time.

The Government initially said that people will be able to draw RS. 2000/- from their ATMs per day and from 19th onwards they will be able to draw Rs. 4000. However, the Govt. again raised the limit to Rs. 2500 and dropped the promise of raising the limit to Rs. 4000/- per day. Clearly they realise that it is impossible.

The initial order said that people will be able to exchange Rs. 4000 worth of old Rs. 500 and Rs. 1000 notes by filling a form. Now that limit has been reduced to Rs. 2000. People will old currencies can however deposit all the money in their bank accounts. However despite the Jan Dhan Yojana accounts not many in India have bank accounts. So that makes it very difficult for people.

The Government has also allowed people to withdraw Rs. 2.5Lakhs if a family has a marriage. This appears to be a fallout of Mr. Modi sarcastically saying in Japan that even marriages have been stopped and the people were heard laughing. The Government has now decided to fight that negative image by ensuring that anyone in the family having a marriage can draw Rs. 2.5L. So this again shows that the Government had not thought about this before ordering its implementation.

The Government realised that many people are going to exchange notes. Some of the people are visiting again and again. So to stop it the banks were asked to put indelible ink on the finger of people while exchanging old notes.  However, there was shortage of such ink, so the banks were advised to use the ink that dhobi's use to mark clothes. Now the Election commission has written to the finance ministry that that since this ink is only for use in elections, the finance ministry ask the banks to stop using it. This again shows how this Government is grappling with a bad idea which was implemented without planning. The Government is moving from one knee-jerk solution to another.

Mr. Modi had come to power by promising efficiency and development. Certainly this muddle headed idea and its poor implementation has left his carefully crafted image in tatters. If this impasse continues for some more days, which it is likely to be, the anger against the Government will rise and no amount of giving it a positive spin will suffice.

His past actions tell us that he will try some other big bang announcement to make people talk about it and forget the pain of notes ban. We haven't heard the last word yet on this issue.

Read the previous article: http://arjunaubacha.blogspot.in/2016/11/blackmoney-politics-way-forward.html

BlackMoney, Politics & Way Forward:

In the 2014 Lok sabha elections, you all would have seen the unprecedented money power. 20,000 crores was spent by BJP. Do you know how much is the official income of BJP in 2014-15? It is 1475.44 crores. So you guys think that the election was fought with “white” money?

According to grapevine, Mukesh Ambani is supposed to have given some 4000 crores. Do you think he gave all that in cheque?

Wake up guys!

Many years ago, Ratan Tata had proposed State funding of elections. It was rejected. Without adequate funding, good guys can never contest elections. Only the rich, corrupt can contest elections. Today they spend anywhere between 6 crore rupees to 10 crores for an assembly election and it varies according to the importance of the seat. That is way more than the stipulated amount that is shown to the election commission as election expenses. Majority of the money spent in elections is black money. During elections when the blackmoney comes out and is pumped into the economy, it becomes legitimate earnings for some and gives rise to a boost to the economy as it has a multiplier effect.

Nevertheless, funding of elections have to be streamlined, else politicians will continue to have a reason to generate blackmoney.

And don’t think the black money is generated only by rich.

Many of you would be paying house rent by cash. Any money that is not accounted for ie declared to the income tax is black. In Delhi, people pay part of the house rent as cash. This is because the owner insists on payment in lieu of pumping water to fill the overhead tank. Much of delhi is like that.

And if you every paid money to the traffic cop for a traffic violation, then that would have been without bill and it is a blackmoney. Did you request the TTE to allot you a berth in the train and given him some money. That is blackmoney. Next time run after the TTE and record video and see what he does. :)

A road side food vendor earns much more than many salaried employees. A TV report suggests a chaat wala in Bhubaneshwar earns 32000 profit per day. That is after paying the mandatory haafta to the police. How many common men and women earn that much money after tax? And all that is black. In Bombay, road side eateries have declared some Rs. 50 crores income. http://economictimes.indiatimes.com/news/economy/policy/roadside-eatery-owners-declare-rs-50-crore-under-black-money-scheme-in-mumbai/articleshow/54618396.cms

The generation of black money is relentless. Modi Govt. has done nothing to stop the generation. Neither it has done anything to hunt the super rich who have already converted their black money to white.

The gems and jewellery industry had grown by 97.1% in FY 2015-2016. Most of that is due to the cash getting converted to gems and jewellery. Govt. mandated the use of PAN card for high value transaction. However, people know how to bypass it by breaking the purchases into instalments as well as lot of those not being shown in the books and through fake id proofs.

The people who are hit by the Rs. 500 and 1000 notes ban are the poor and small time traders. In Delhi when a maid goes to convert her 1500 rupees which she had got as salary by giving it to the sabji wala, the sabjiwala thela guy gives 300 worth of sabji for each 500 note.

An industrialist has got 80 employees. He signed contract with all his employees and gave them 5L each to be deposited in their account as well as their wifes account (2.5L each). So he made some 4 crores white. This is one of the methods adopted. People are ingenious and can figure out a loophole to deposit their notes in the bank accounts.

The challenge is the significant loss in sales in the markets. The economy is hit. There is partial impact of this on some guys who had blackmoney. However for a large economy like India, this is way too less. We order food/groceries online paying through card to tide over the problem. The poor cannot afford to do that. In smaller towns the number of banks are too less and due to lack of media coverage we don't get to know the suffering of the people.

Note ban is More to do with Politics:

There is so much of data these days. The Government should have put people to analyse it. This kind of data analytics is called “big data”. However, the Government decided to create fear in the minds of people to benefit politically.

Else, there was no reason to say that any deposit over Rs. 2.5L in bank will be taxed. What was the point in making that announcement? Let people deposit all their money and then the Government could have just gone and caught the people who had deposited huge amounts and asked them to justify it.

What was the need to announce that the Government is tracking the Jan dhan yojana accounts where money is being deposited. It is simple politics my friend to tell you guys that the Government is actually hunting down the people with blackmoney. It wants you all to have vicarious pleasure in participating in that blackmoney hunt. Remember the Roman era where people used to applaud the bloody man vs animal sports? The psyche is the same. The Govt. makes the aam aadmi feel the same about hunting blackmoney guys. Unfortunately, due to the poor implementation, the poor people instead of applauding the Government have become collateral damage. The Supreme Court has rightly said that it is Carpet bombing.

Citizens can help unearth BlackMoney:

The Government can setup toll free numbers, email ids and fax numbers dedicated to unearthing black money where any person can send a message about instances of blackmoney generation.

Some bhakts say that banning Rs. 500 and Rs. 1000 will lead to more PayTM which is good. Tell me why going with a Chinese company is good?

Govt. App for e-money:

I would prefer that all buying and selling be done via an app linked with mobile and that app should be owned by the Government. It should have voice assisted features, so that even a layman can understand how to use it.

If there is any hacking then the Government should be responsible. When it comes with sovereign guarantee, people will definitely use it.

And the Government will then know all the users using the app to buy and sell even small things like samosa in the road side. Let the Government take the lead. It would be the biggest e-money payment mechanism in the world.

Why bow before chinese and use PayTM? If that can be done, then the entire India will stand up and applaud Modi. No amount of tears can move me. Only visionary work can. I still have hopes that Mr. Modi can do good things based on his mandate, without disrupting lives of common man and making him/her collateral damage in his politics.

Edit: Readers have emailed that there is a National Payments Corporation of India with its UPI (Unified Payments Interface) gateway, where some 30 banks are linked. So one can directly pay from your account. It was done during Raghuram Rajan's time and hasn't got much publicity. May be the Hon'ble Prime Minister can promote it instead of being shown in PayTM advts. However, we are not sure if this UPI will work in toll booths and other places.

Read the Next article: http://arjunaubacha.blogspot.in/2016/11/notes-ban-terrible-implementation-shows.html