Two topics of discussion as we run into the heat of politics in the heat of the climate also are the demonetization and unemployment. Nobody talks of corruption like in earlier govt. that linked politicians to middlemen and money trails. Everyone in India knows that Modi does not need money even after retirement given the frugal living. Cannot be said of the opposition politicians like Akhilesh, lallu's children, mayavati etc who live in palatial building and want more. Can they also attempt to live like Modi. The only link they are trying is to bring in Anil Ambani, which has been selected by Dassault and no letter/link is there from govt. to grant it to him so far.
Coming to demonetization, when it happened it sucked out the money from the cash dealings that was the norm. It showed that 80% of our economy was run on cash and implying that 80% of the economy was run on black money. It needed great courage to attack this black money economy even at the cost of creating problems for the lowest of the earners. It is surprising that the poor took the demonetisation very well suffering but giving it a thumbs up. It was only politicians who were against it or those whose basic business was dependent on black money. With the fear of demonetisation many of the people would now think twice about doing business in cash and would prefer to file the income tax. This no doubt has generated more filing and thus bringing the filers of tax from a meagre 2-3% to a higher level. This will go up if the govt. does not change as otherwise it would be back to status quo of people doing business in black money.
The negative effect of demonetisation that caused unemployment was purely because most of our business was in black and it got stopped like the real estate business. Every Indian knows that BLACK MONEY is related to CASH as every illegal transaction takes place not through wire transfer but cash transfers. EG. How many of us would have paid cash as speed money to get things done. Did we pay by credit card or bank transfer? How many of us would have paid 60% in Cash to builders or buying from others (70%) to avoid paying tax and thus generate Black money. Was it paid as cheque/card/transfer - the answer is NO. Thus implying Cash and blackmoney are hand in hand.
I still remember coming to Middle east and wanting to buy a DDA flat in Delhi in the secondary market. I was told i would have to pay 75% in black money. I had to lose the deal as the bank would not lend me money as the deal would be registered on 25% value and payment 25% in cheque and my loan a %age of 25% value. Where would I suddenly get cash?
Today, nearly everyone be it builders, sellers are seeking 100% by draft/check. Thus black money area is reduced to a large extent in the real estate. If a a new govt comes possibly it could reverse to the earlier blackmoney percentage.
Demonetisation has been made to a Demon by politicians and certain section of media. As a principle it is a good move that should be done every 10 years. However we have to take care of the jugaadoo people who used some of the corrupt bankers and some of the CA's to bypass and convert their cash to bank account. But the one advantage is that most of the money is now routed through banks. Data Analytics can do the magic of finding whose account was used to convert blackmoney and then action taken.
Coming to demonetization, when it happened it sucked out the money from the cash dealings that was the norm. It showed that 80% of our economy was run on cash and implying that 80% of the economy was run on black money. It needed great courage to attack this black money economy even at the cost of creating problems for the lowest of the earners. It is surprising that the poor took the demonetisation very well suffering but giving it a thumbs up. It was only politicians who were against it or those whose basic business was dependent on black money. With the fear of demonetisation many of the people would now think twice about doing business in cash and would prefer to file the income tax. This no doubt has generated more filing and thus bringing the filers of tax from a meagre 2-3% to a higher level. This will go up if the govt. does not change as otherwise it would be back to status quo of people doing business in black money.
The negative effect of demonetisation that caused unemployment was purely because most of our business was in black and it got stopped like the real estate business. Every Indian knows that BLACK MONEY is related to CASH as every illegal transaction takes place not through wire transfer but cash transfers. EG. How many of us would have paid cash as speed money to get things done. Did we pay by credit card or bank transfer? How many of us would have paid 60% in Cash to builders or buying from others (70%) to avoid paying tax and thus generate Black money. Was it paid as cheque/card/transfer - the answer is NO. Thus implying Cash and blackmoney are hand in hand.
I still remember coming to Middle east and wanting to buy a DDA flat in Delhi in the secondary market. I was told i would have to pay 75% in black money. I had to lose the deal as the bank would not lend me money as the deal would be registered on 25% value and payment 25% in cheque and my loan a %age of 25% value. Where would I suddenly get cash?
Today, nearly everyone be it builders, sellers are seeking 100% by draft/check. Thus black money area is reduced to a large extent in the real estate. If a a new govt comes possibly it could reverse to the earlier blackmoney percentage.
Demonetisation has been made to a Demon by politicians and certain section of media. As a principle it is a good move that should be done every 10 years. However we have to take care of the jugaadoo people who used some of the corrupt bankers and some of the CA's to bypass and convert their cash to bank account. But the one advantage is that most of the money is now routed through banks. Data Analytics can do the magic of finding whose account was used to convert blackmoney and then action taken.
No comments:
Post a Comment