Why India wiped out 86% of its cash overnight

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http://www.bbc.com/news/world-asia-india-37974423

India is in the middle of an extraordinary economic experiment.

On 8 November, Prime Minister Narendra Modi gave only four hours’ notice thatvirtually all the cash in the world’s seventh-largest economy would be effectively worthless.

The Indian government likes to use the technical term “demonetisation” to describe the move, which makes it sound rather dull. It isn’t. This is the economic equivalent of “shock and awe”.

Do not believe reports that this is primarily about bribery or terror financing, the real target is tax evasion and the policy is very daring indeed.

You can see the effects outside every bank in the country. I am in Tamil Nadu in the south of India and here, as in every other state in the country, queues of people clutching wads of currency stretch halfway down the street.

Mr Modi’s “shock and awe” declaration meant that 1,000 and 500 rupee notes would no longer be valid.

These may be the largest denomination Indian notes but they are not high value by international standards – 1,000 rupees is only £12. But together the two notes represent 86% of the currency in circulation.

Think of that, at a stroke 86% of the cash in India now cannot be used.

What is more, India is overwhelmingly a cash economy, with 90% of all transactions taking place that way.

And that is the target of Mr Modi’s dramatic move. Because so much business is done in cash, very few people pay tax on the money they earn.

According to figures published by the government earlier this year, in 2013 only 1% of the population paid any income tax at all.

As a result huge numbers of Indians have stashes of tax-free cash hidden away – known here as “black money”.

Even the very poorest Indians have some cash savings – maybe just a few thousand rupees stored away for a daughter’s wedding, the kids’ school fees or – heaven forbid – an illness in the family.

———-

https://seeker401.wordpress.com/2016/11/11/india-scraps-500-and-1000-rupee-bank-notes-overnight/

“On 8 November, Prime Minister Narendra Modi gave only four hours’ notice thatvirtually all the cash in the world’s seventh-largest economy would be effectively worthless.

this was huge but was lost in the fog of an election..the best time to air dirty laundry..

“And that is the target of Mr Modi’s dramatic move. Because so much business is done in cash, very few people pay tax on the money they earn.”

401

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~ by seeker401 on November 17, 2016.

22 Responses to “Why India wiped out 86% of its cash overnight”

  1. Looks like the (((worldwide central banking cartel))) is not getting its protection money from India.
    For the cartel to steal a percentage of the sweat & toil of every Indian (while it sits on its fat, pimply ass and earns none of what it steals), the Indians must pay taxes. A country that has borrowed tons of money from the cartel and left the bill at the doorsteps of its citizens (who have gained nothing from the borrowing) needs to tax those citizens to pay the interest. “But why not just print the money from their treasury, debt free?” you may ask.
    The answer is that they have made criminal crony deals with the cartel, and the cartel is the enemy and enslaver of all mankind…the parasites that suck from the world’s life-blood, and return nothing.
    The entire world needs to free itself from this vile cartel, or it will find its yoke getting heavier and heavier as the bloated parasite grows larger and larger with its unearned, undeserved wealth.
    The issuance of every nation’s money should originate from their governments, and those governments should ultimately be under the control of the citizens.
    And usury should not ever be connected with that issuance.

  2. Jct: It can only push people into printing up their own time-based currency: http://SmartestManOnEarth.Ca/unilets is DIY P2P timemoney! Har har har har har har. Sure, get rid of government chips, we’ll print our own.

  3. Reblogged this on World Peace Forum.

  4. Bernanke ‘s helicopter cash drop has come to fruition.. except this is in India

    http://www.zerohedge.com/news/2016-11-21/india-uses-helicopters-air-force-planes-deliver-freshly-printed-cash

    • literally chopper money..

    • From that article posted by joeH:

      “In other words, the Indian “demonetization” was merely a quick and easy way to eliminate some tens of billions of sovereign debt, while at the same time “cleansing” the economy of cash whose source can not be documented. It is likely that should India’s experiment prove to be successful, it will be followed in many more cash-rich nations.”

  5. Meet the ‘money mules’ of India’s cash crisis

    http://www.bbc.com/news/world-asia-india-38011407

    The Indian government’s surprise decision to ban 500 and 1,000 rupee notes in a crackdown on corruption took 86% of money out of circulation in the largely cash economy. But some enterprising Indians are seeing opportunity amid the cash crisis, reports the BBC’s Vikas Pandey.
    “Are you looking to make your money legal?” a young man says, approaching me as I walk to a bank in Noida, a suburban area of Delhi.
    “It’s very easy and we can finish our transaction right here, now are you interested?”
    Mukesh Kumar, 28, is not standing in the long queue outside the doors to the bank.
    He is one among many of India’s “money mules” who have found ways to benefit from the cash crunch.

    • I heard today that gov’ts need to get money back into the banks (and the gov’t itself?) but are having a problem making that happen. The banks and gov’t need to get cash out of the market and burn it. It has to do with gov’t bonds. I am not that knowledge about those types of interrelated workings. Take what I say here with a grain of salt unless somebody else more knowledge about this may be able to chime in.

  6. So if India had all the money digitalized then they would not have to go through all these seemingly hard measures of disruption. It would have been more expedient, less materially imposing, and less physically disruptive. *sarcasm*

    That is Platonism (material is evil so the more ethereal the more pure)

  7. you want Cash..?? here take that!!

  8. Mobs Lock Up Bankers During India’s Cash Chaos

    https://www.bloomberg.com/news/articles/2016-11-30/mobs-lock-up-bankers-as-pay-day-turns-pain-day-in-cashless-india

    • http://www.investing.com/analysis/the-big-theme-for-2017:-a-global-cash-ban-200170828

      Put simply, 2016 was the year in which the 7th and 33rd largest nations by GDP went effectively cashless… and no one lost their jobs over it.
      You can imagine the glee the elites felt witnessing this, particularly in countries in which 50%+ of transactions no longer involve physical cash (60%+ in most developed nations).

      After all, the only thing these people do worry about is losing their jobs. Provided no one is kicked out of office as a consequence, any policy, no matter how terrible, is considered viable to this crowd.

      Which is why 2017 will shape up to be the year of the Global Cash Bans.

  9. wow , guess who was really behind the move to get rid of indian cash – no surprises

    http://norberthaering.de/en/home/27-german/news/745-washington-s-role-in-india#weiterlesen

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