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Comment Re:It seems like they acted too fast. (Score 1) 216

Fair point, but I think you massively underestimate the scale of corruption in almost every sphere of life in India. Any additional time allowed to ease people's inconvenience would also have meant higher chances of leaks and reduced the effectiveness of the exercise as a whole. It's really a choice between the lesser of two evils here. By the way, I live in India and the on-ground situation is not been quite so cataclysmic as the media would have you believe. Sure, there are minor inconveniences but that's pretty much the norm here. Just means you need to plan a little better.

Comment Re:gov't trust [Re:What's the rush?] (Score 2) 216

The fear of government "Taking away your guns" is uniquely American. The rest of the world has solved the problem far upstream by not making firearms and ammunition freely available to the general public. Ethnic profiling is done anyway, through various other means. They're not depending on cashless payment systems for this. And finally, very few people are worried about being deported FROM India.

Comment Re:India just tried to go almost completely cashle (Score 1) 258

This isn't intended to be a panacea for every social ill. It isn't even a solution to curb all forms of corruption. It's just one measure by which the government aims to reduce the size of the shadow economy, widen the tax base and flush counterfeit currency out of circulation. Corruption is, to a large extent facilitated by the existence of a large parallel economy. One of the reasons bribery is so widespread is that it's relatively easy to convert all that accumulated cash into other forms such as real-estate, gold etc. Does it eventually become part of the legitimate economy? sure. Thats kinda the point of money laundering!.

Comment Re:India just tried to go almost completely cashle (Score 1) 258

Do the municipal and state/district governments not record sales of land and vehicles/vessels? Such large assets require registration in other countries: Does India refuse to do this?

Yes and no. They do record sales and purchases, in turn levying registration charges and stamp duties on the buyer. But since these levies are a percentage of the property value, there's usually an agreement between the buyer and seller to reduce the transaction value to a minimum. The discrepancy between the value of the property on paper and the amount of money actually changing hands is usually no less than 40% and could be up to 95% in extreme cases. The reason this is possible is because a) people are accustomed to dealing in large amounts of physical cash and b) the clerk in the registry office is happy to accept a bribe and look the other way. Less physical cash in the system means more barriers to this sort of behaviour.

Yes, idle money is a bad thing but a banking system is not strictly necessary, it's just easier to regulate a savings and loans service. Money lying around must be attracting thieves: How can people justify holding onto cash, or losing interest from investing?

Prior to economic reforms in the 1990s India had extortionate levels of taxation. In the 60s and 70s tax rates were as high as 97%. This naturally made a lot of people seek to avoid having anything to do with banks and these habits persist. In other cases it's just resistance to change - people were uncomfortable when ATM machines were introduced around 20 years ago. Now they're ubiquitous. People will eventually get used to transacting through cards, digital wallets and online. As for S&L, I'm not sure there is a direct equivalent of this in India, although there are payments banks, co-operative banks (more like credit unions I guess) and housing finance lending companies. All these come within the purview of the regulated economy however and tend to be shunned by those who favour cash payments.

Comment Re:India just tried to go almost completely cashle (Score 2) 258

Every assertion you have made is lacking the critical thinking 'Why?'

Why is a 97% cash based economy "just ridiculous?"

What is ridiculous and why is it bad?

It's bad because it facilitates corruption on multiple levels. Go to a store to buy something and inevitably the question pops up of whether you want a bill. The vendor offers you a discount if you pay cash and don't ask for a bill because that way he evades sales tax on that transaction. Most people would gladly pay cash and take the discount. With a card swipe the vendor has no choice but to account for the transaction and pay the tax on it. Multiply this across every store in the market, add gas stations, hospitals, basically anywhere money changes hands in cash and imagine the scale of tax evasion. Many people feel a sense of unfairness at the prospect of their income tax being deducted at source (@marginal 30%) when traders and business owners are getting by paying only a fraction of what they're supposed to.

Why should people not be allowed to purchase specific items with cash? Who decides that and why?

The majority of those paying cash aren't doing so just for the pleasure of it. They're doing it for a very specific purpose - to evade taxes. If the indirect tax net is broadened by discouraging these "off the books" transactions the government would be able (in theory at least) to rationalise direct taxes for the middle class who currently bear a good share of the income tax burden. Consider that over 50% of total tax revenues come from direct taxes (i.e. income tax) which are paid by less than 5% of the population. Note: this isn't the top 5% either.

Why is India an "annoying neighbor?" Why does that matter? Why is that relevant to what they do within their borders with their own currency system?

Okay, I'll count this one as a reading comprehension fail. My point was that India has an annoying neighbour that actively counterfeits Indian currency.

Why does it matter if people "can't be bothered to use the banking system?"

It matters because the promotion of a shadow economy has several drawbacks including rising tax rates, constraints on public sector spending and making econometric figures unreliable

Why is the banking system better? What does it provide that cash does not to the people that prefer cash?

How about security from theft and opportunities to earn interest?

Why do you believe interests rates dropping would be a good thing for people that can't take advantage of it?

It doesnt matter what I believe. The fact is lower interest rates are a significant factor in promoting and sustaining overall economic growth and economic growth leads to reduction in poverty levels

Why do you think that interest rates dropping would naturally lead to better infrastructure?

Not interest rates but increased tax revenues means more public funds available for infrastructure projects.

Why should someone that has cash let other people make money off of their work?

Oh I don't know - maybe because they benefit from public services like roads, sanitation and public healthcare?

Your post is just a series of claims. No critical thought. No logic. Just how you want the world to conform to your views without any convincing arguments.

and yours is a bit of a rant.

Comment Re:India just tried to go almost completely cashle (Score 1) 258

Explain to me exactly how anything becomes 'worthless'? INR 500 or 1000 still has the same value. No one's trying to take money away from people. It's just the physical instrument (i.e. banknote) that is useless. All this move does is encourage more people to use the banking system where their hard-worked-for money is:

1. Safer than sitting around in a poorly secured house
2. Able to earn them interest @ a minimum of 4% p.a. instead of sitting idle

No one is suggesting anybody go into debt to buy a house. They can still write a cheque or use a bank draft to buy that house 'in cash' if they wish. Do they really need to do this using bundles of banknotes in a briefcase / duffel bag? I agree there's a lot of inconvenience and confusion but the scale of the problem is immense. IMHO the long-term net losers in this are either people who have exploited the system intentionally, or those who are unwilling / unable to accept the transition to modernity.

Comment Re:India just tried to go almost completely cashle (Score 2) 258

To describe it as a disaster is a bit much. Yes there are long queues outside banks and a lot of ATMs weren't functioning for a while, but a 97% cash based economy in the 21st century is just ridiculous. I'm certainly no fan of the present government but this is the one good idea they've managed to come up with. There's a lot of considered opinion for and against the move, but here's my first person view.

1. You absolutely should not be able to buy a house or a car in cash - yet this is pretty much the norm across much of the country, more so in the secondary market where the amounts changing hands are larger. This means widespread tax evasion at every level, and an unfair burden on those who are part of the 'organised' economy and pay income tax (around 3% of the population).

2. India happens to have a rather annoying neighbour who has set up currency presses for the sole purpose of generating counterfeit Indian currency. Sure, they'll probably start printing the new notes as easily after a while but if the overall cash portion of the economy reduces, the impact of fake currency also does

3. People have inordinate amounts of cash lying around - and I'm talking regular average people. It's not because they have some lofty ideals about anonymity or government interference, just because they can't be bothered to use the banking system. If all that idle money (we're talking 10s of billions of dollars here) were put to work interest rates would drop, more resources for infrastructure building would be available and so on

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