In unvanquishable number –
Shake your chains to earth like dew
Which in sleep had fallen on you –
Ye are many - they are few. - Percy Bysshe Shelley
Do you know?..
1) Debit Cards charge between 0.5% to 1% to the retailer or money receiver for every transaction.
2) Credit Cards charge between 1.5%-2.5% to the retailer of the money receiver for every transaction
3) PayTM/Freecharge/Jio Money and other E-wallets charger 2.5% -3.5% when you want to transfer your e-wallet money into your bank account.
RBI data shows every month around 2.25 lakh crore (Anually Rs 25 -30 lakh crores) is withdrawn from ATM’s across India. And it is estimated that along with bank withdrawals a total of Rs 75 lakh crore is withdrawn ( both banks and ATMs) on a yearly basis All this is accounted/tax payed money which is withdrawn from banks..Currently just 3% of transactions are in electronic mode..
If this 75 lakh crore is converted to a #cashlesseconomy look at how much the companies will earn..(75 lakh crores * 2% average) Rs 1.5 lakh crore per year .. NO KIDDING!
This is the biggest Open Scam. Direct Benefit for Corporates like Reliance, PayTM, Banks etc of Rs 1.5 lakh crore per year..
Which makes me wonder was Demonetization done to end black money or was it done to benefit Corporates?
(New Delhi, Dec 12, IANS)
In the second stage they didn’t have money to pay suppliers, transporters, loaders and labourers. Payments to them constitute a large percentage of expenditure. No money because they had deposited it and banks didn’t give money in return. Worse, rules regarding withdrawal and deposit of money were being changed all the time. It sent the message that demonetisation hadn’t been thoughtfully planned. For instance, the bulk of black money is in property and gold. To eradicate black money, the government should have gone after benami property. Since that wasn’t the case, businessmen thought it was a blunder. Chemotherapy in cancer treatment is opted as a last resort. This is because chemotherapy also kills healthy cells. But here to eradicate black money, the micro, small and medium enterprises were thus first hit badly.The brass industry of Moradabad, UP. The raw material for brass is supplied by people who deal in scrap. They sell scrap to the consolidator who buys it in cash. The consolidator is the one who combines three to four activities. The scrap is melted. It is turned into brass silli (slab or bar). The next stage involves making moulds – for instance, of a flower vase or a tap. The brass is melted and poured into these moulds. After this stage, there are craftsmen who make designs on it, then comes the stage of polishing, then of lacquering. Each of these stages is based exclusively on cash. Thereafter, the brass products come into the distribution network. That, too, works on cash. Only brass exporters don’t rely on cash and, therefore, escaped the blow of demonetisation. Nearly 60-65% of this sector which earns Rs 6000 a year is starved of cash and closed.
Workers in micro, small and medium enterprises are migrants. They are paid piecemeal, in cash, not cheque. Their number is enormous. About 7% to 8% of people are employed in government and corporate sectors. Of the remaining 92%, take out 60% of those who are farmers or linked to the rural economy, though they too work on cash and not cheques. So, the remaining 32% or a little more are employed in our enterprises and depend on cash. About eighty per cent of them are afected badly.
.... The banning of Rs 500 and Rs 1000 notes have wrecked rural economy. Here are some sample reports. Scroll.in quoted a wholesale vegetable dealer in Bihar, “Cauliflower was selling for Rs 12 a kilo just before the announcement on November 8. It is now selling for one or two rupees.”The Hindustan times reported of a cabbage farmer of Ahmednagar district in Maharashtra who got just Rs 6,000 for his entire one acre of produce instead of Rs 80,000, the market price he could have got earlier. A kilo of onion from neighborhood store costs Rs 10, which used to cost Rs 40 or more. You can imagine how much the farmer who produced it would have got. Yes, the prices are falling. At last the consumers can get things at a cheaper price. Is it that simple an equation? Or is there something more sinister and devastating lurking behind falling prices?
John Maynard Keynes writes in his 1923 classic ”A Tract on Monetary Reform” “......to every merchant and every manufacturer, that for some time to come his stock and his raw materials will steadily depreciate on his hands, and to every one who finances his business with borrowed money that he will, sooner or later, lose 100 per cent on his liabilities (since he will have to pay back in terms of commodities twice as much as he has borrowed).” Think of the tomato farmer who has to sell a kilo of tomato for 50 paise, or the cauliflower, cabbage or onion farmer who has to sell at above mentioned prices. Did he get back what he invested in terms of money or energy? How will he sustain the family? Imagine if he had borrowed money to plant his crop, god forbid he did not, how will he pay back his debt? He is falling into a spiral of debt trap from which he may never escape. That’s the real reason behind lakhs of farmer’s suicide.
3,00,000 farmers have committed suicide in the last 20 years. That’s the result of 20 years of neo-liberalist experiment in Indian economy. Here comes the shock doctrine of Narendra Modi’s demonetization or note ban of November 8. How many more farmers will have to follow those of the 3 lakh listed above? Many more will follow. Is it a case of rural economy only? India being a predominantly agricultural economy the symptoms of demonetization will start showing in rural India first. And it is showing. The government has to read the signs. The symptoms are a classic case of economic deflation. These are some of the symptoms of deflation: Reduced Business Revenues; Wage Cutbacks and Layoffs; Changes in Customer Spending; Reduced Stake in Investments; Reduced Credit And it’s all happening in many parts of India, especially in rural India.
What about urban India? People are holding onto their cash like proverbial straw of the sinking man. The thinking is, what if someone in the family falls sick and if I don’t have cash? Nobody will lend me money. Everybody is hoarding cash. The trust has been lost. Everybody is looking for his/her own survival. People are not willing to spend. Everybody is postponing their purchases of ‘luxury’ items, not even necessary items like vegetables. This is adversely affecting the vegetable producer back in the village. He can’t store his perishable items. Therefore he is dumping it on road to show his desperation.
All businesses have come to a standstill. This will adversely affect the tax revenue of the governments, both state and central. Government of India depends heavily on petrol/diesel tax revenue. In India taxes exceed the real cost of petrol/diesel. In the financial year 2014-15 total tax revenue Government of India earned from petrol/diesel was Rs 75,441 Crore. If people stop travelling or goods movement slows down, which is already happening, the government revenue will plummet. Since business has slowed considerably, tax revenue will fall. In that scenario, how will the government run? Print more money? They can’t. Since the currency presses are running full throttle and can’t bring out enough cash into banks.
A greater than ‘Great Depression’ or worse is staring down on India. The only option on the table for the government is to shed down its false ego, admit that they made a mistake, apologise to the people and bring back the old currencies. Otherwise, floods! That will sink all of India.
“We have yet not received any cash. Some of our branches are completely out of currency notes. But, we plan to request for cash from some other branches,” said Ravi Kant Singh, district coordinator for State Bank of India, Meerut. The official told The Indian Express that the production of currency by the government and the RBI press was between Rs 12,000 crore and Rs 15,000 crore a day. At the upper end of this estimate, new currency of Rs 2.85 lakh crore is estimated to be printed, and at the lower end Rs 2.28 lakh crore, from December 12 till December 30. “This will be good to meet the demands of the economy,” said the official.
But in actual terms, the Rs 9 lakh crore to Rs 10 lakh crore that will be available by the end of December would be just 51-57 per cent of the total value of currency in circulation — Rs 17.5 lakh crore — before the demonetisation decision was announced. Officials said that average deposits per day have trickled down to Rs 12,000 crore from about Rs 45,000 crore per day previously. On the other hand, withdrawal of currency per day has gone up to about Rs 16,000 crore. The government expects that a significant percentage of the money that returns to the system will be captured by the recent amendments to the Income-Tax Act. Banks have been asked to furnish details of deposits of over Rs 50,000 in Jan Dhan accounts, over Rs 2.5 lakh in savings bank accounts and Rs 12.5 lakh in current accounts to the revenue department. The I-T department is also preparing to send notices and issue summons after January 1, 2017, in cases of “suspicious” transactions in accounts that are red-flagged during data analysis.
(Kabir Agarwal, TNN, Dec 3, 2016)
Earlier, cash was deposited at the bank and transferred directly to the state government’s accounts. This year, banks have asked seed centres to deposit the money in their own accounts and then transfer them electronically to the state government. However, such accounts do not exist and opening them would require meandering through a maze of paperwork.
“This is the best time for sowing. Wheat is usually cultivated over 1.20 lakh hectares in the district, but so far only 22,000 hectares have been sown and the numbers are just not picking up. It seems the total area on which wheat will be grown this season will be far lower than usual,” an agriculture dept. official said.
On November 21, the Centre allowed farmers to purchase seeds with demonetised notes, after which the seed department of Bijnor sold 2,500 quintals of seeds, half of their total stock, to farmers, garnering Rs 80 lakh in old currency. But the agriculture department is not providing wheat seeds to farmers against old currency, while the government had announced that farmers can purchase seeds with old currency. So seed purchase has fallen. Deputy director of agriculture said, “Earlier we used to sell seeds to the farmers and deposit the cash through challans directly into government bank accounts. But SBI has refused to take old notes from us after November 24. Bank officials suggested we could deposit seed sale money into our departmental account and then transfer it into a government account. But the seed department does not have an account of its own. To open a new one will take months, considering all the paperwork and permissions needed. So the department has stopped selling seed to farmers, who in turn have reduced the total land being sown.”
(Harveer Dabas, TNN, December 4, 2016)
Twenty-three-year-old Avinash Kumar is planning to postpone his sister’s marriage. The money he had saved, working at a sweatshop in New Delhi’s Mongolpuri, is all but gone. Kumar lost his job in about two weeks from the time Prime Minister Narendra Modi announced a ban on Rs 500 and Rs 1,000 notes, in a move that he termed as the biggest-ever offensive against black money. Kumar was among the millions of underclass Indians who cheered Modi for what they saw as a decision that may cause temporary disruptions but would benefit the nation’s longer-term interests. They were willing to weather the inconvenience and stand by their leader. Lately though, people like Kumar are having rethink. Within days of the November 8 announcement, fresh orders dried up at the garment factory where Kumar worked; where most transactions, including payment of his wages, were in cash. A few days later, “my manager asked me to leave as he had no money to pay,” said Kumar who has since returned to Laxmipur, his native village in Gorakhpur, that counts among one India’s most impoverished.
“My manager asked me to leave as he had no money to pay. My sister’s wedding is planned for January, but I don’t see it happening.” “My sister’s wedding is planned for January, but I don’t see it happening. All my savings are gone and no one will give a loan to a jobless youth,” said Kumar who is the sole bread winner in a family of four. Villages across Uttar Pradesh, Bihar, Bengal, Jharkhand and Odisha are seeing a steady spike in migrant workers returning home, according to dispatches from HT’s national network of journalists. They are returning from Kerala where the construction sector has come to a grinding halt; from Surat and other parts of Gujarat where diamond polishing mostly runs on cash; from Delhi and Mumbai and Punjab where labour-intensive businesses such as real estate and retail trade have been hit hard.
For those returning home, the narrative is slowly changing from temporary inconvenience to insecurity over livelihood. Umesh Sahni, a resident of Pakri Sahni Tola in the Muzaffarpur district of Bihar, has been calling his employer at a fish packaging company in Udaipur, to know when he can resume work. “They say wait until the cash flow normalizes,’ said Sahni, who had come home on holiday just before demonetization was announced. Anxious and confused, he asks, “When do you think, things will get normal?”
In a November 13 speech, the prime minister assured the people of the country that normalcy would return in 50 days. Cash flows through the financial system may largely stabilize by the time we step into the new year, but no one is sure how long will it take to overcome the economic disruptions and dislocations caused by what now appears to be a highly flawed approach to tackling black money. It was said demonetization would help destroy dodgy cash, ease inflation, lower interest rates and accelerate economic growth. But what is happening is just the opposite.
(The report published in Hindustan Times)