5 reasons why Indians shouldn't complain about demonetisation

OPEN TO OPINION POLITICS ART & CULTURE LIFE SCI-TECH MONEY HUMOUR VARIETY VOICES Twitter Facebook Google Plus News Letter While there has been a lot of focus on the short-term hassles faced by the common people, thanks to the demonetisation of Rs 500 and Rs 1,000 notes and laments that the corrupt will find a way to offload money, a lot of people are missing the long term benefits of such a move. 1) The corrupt will lose money: How much black money is there in India? Nobody really knows though most estimates are in the tune of lakhs of crores of rupees. While some of that is in gold, benami property and foreign bank accounts, there is no doubt that quite a lot of it is hoarded in Rs 500 and Rs 1,000 bundles in households all across India. The corrupt will not be able to offload all the money. Some they will be able to convert themselves, some will be passed off for conversion to others and even given away (good for the recipients). But the rest will miss the deadline and have to be burnt or thrown away. This is already happening even though it's just been a few days since the announcement. Burnt notes are being discovered all over India and many sacks are being dumped in dustbins! If any person finds that, it will be a windfall of tens of thousands of rupees (an amount easily convertible) at least. But the corrupt will lose their black money in large numbers. That itself is a huge win from the scheme. It will take a few months for experts to figure the exact amount, which is likely to be quite huge. 2) Counterfeiting just became super difficult: The Rs 500 rupee note was introduced in 1997 and the Rs 1,000 note in 2000. Once counterfeiters mastered the art of duplicating them, it became a huge cash cow for them. The Indian government has failed to check this menace and in certain border areas, it has got so bad that people have no idea which are the real notes and which ones are fake. In fact, many small shops in small towns all over India don't accept high-denomination notes, which is a real pain for customers. Now come the new notes and counterfeiters will have to start from scratch. News reports said intelligence agencies have taken a look at the notes and declared them virtually impossible to duplicate. Let's hope they are right. card-embed_111116042124.jpg A cashless economy is easier to track for the government and discourages black money. (Photo credit: India Today) 3) Second surgical strike on Pakistan: While everyone knows of Pakistan's direct wars and terror group attacks, a little discussed fact is its policy of economic warfare. Pakistan prints fake Indian notes with impunity and one commentator even joked that now the Pakistani economy would crash! A bigger problem is that terror groups enter India with this fake currency. Those fake notes not only sponsor their terror operations but also destabilise the Indian economy, so it's a double whammy for us. Post-9/11, Pakistan was on the ascendant. It re-cemented ties with America and got flush with funds while America looked the other way. That's why it was quite easy for the ISI to run an elaborate fake Indian rupee operation. However, now the new notes are more difficult to counterfeit and US president-elect Donald Trump may not be that favourable to looking the other way to all of Pakistan's illegal activities. This is probably India's second surgical strike on Pakistan this year and they have been checkmated. 4) Bad notes will exit the market: Anyone who has studied basic economics will know that after the Gold Standard was cancelled internationally and thanks to fractional-reserve banking, any government can print as many currency notes as it likes. The only problem is that the more notes they flood into the market, the weaker the rupee becomes and problems like inflation come up. The counterfeit money flooding the market has the same effect. Well now, as discussed above, first a lot of money is going to be burnt and thrown out. Second counterfeit money will be eliminated and more won't come for some time. These "bad notes" will be taken out of the market and the spending power of the rupee will go up. 5) Forward step towards a cashless economy: A cashless economy is quite convenient, easier to track for the government and discourages black money. (I am not talking about Swiss banks for the rich but day-to-day activities of Indian citizens.) While a good chunk of India has embraced online banking, shopping, ticketing, taxis… a part of India is unwilling to try it out. However, this move will make them see it in a new light. For one, thanks to the great inconvenience due to demonetisation in the next few months, a lot of Indians will switch to cashless transactions for what they think is a temporary measure, but they could well get hooked to it. The Indian government has been pushing for the same and just received a fillip. Also read: New Rs 500/2,000 notes, how to spot real from fake Also read: Scrapping Rs 500/1,000 notes will hit the poor, not black money AlsoRead Modi, Black Money, Demonetisation Valson Thampu Valson Thampu Will Modi's black money-mukt Bharat make Indians poorer? BJP, Narendra Modi, Note, Rs 2000 DailyBite DailyBite New Rs 500/2,000 notes, how to spot real from fake Narendra Modi, Black Money, Demonetisation, Demonetisation Kamal Mitra Chenoy Kamal Mitra Chenoy @KamaIChenoy Scrapping Rs 500/1,000 notes will hit the poor, not black money img Black Money, Republicans, Demonetisation Bharat Shah Bharat Shah Demonetisation is great news for Indian economy (along with Republican victory) Demonetisation, Black Money Devina Gupta Devina Gupta @devinaguptanews Demonetisation of 500/1,000 notes: Why it's time to switch to plastic money Sponsored Links You May Like Top 5 Upcoming Scooters i… auto.ndtv.com Find Your Space at Rustomjee… Rustomjee Magnificent Township in Mumbai S… Runwal MyCity You Can Save up to Rs. 46,00… ICICI Prudential Mutual Fund U.S. Presidents Ranked fr… InsideGov — By Graphiq Ever Wondered Why Dona… Wizzed by Taboola #Cashless payment, #Demonetisation, #Black Money The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of DailyO.in or the India Today Group. The writers are solely responsible for any claims arising out of the contents of this article. Writer Sunil Rajguru Sunil Rajguru @sunilrajguru The author is a Bengaluru-based journalist and blogger. Comment Back to Home More from Sunil Rajguru | MONEY| Latest of the lot Why would Trump have a problem with Modi? There is bipartisan support for closer relations with India in the US Congress and the Senate. POLITICS | 5-minute read | 12-11-2016 Surendra Kumar @ambksurendra On the eve of elections in India, political parties routinely accuse each other of politicising and polarising certain issues of public interest to gain political advantage. But in the US, polarisation and divisive factors seldom decisively tilt the result of the Presidential race. The 2016 election is the exception to this rule and it will go down in American history as the most divisive. For the first time, election result has been greeted with protest marches in over two dozen American cities; protesters chanting that Trump isn’t their President! Statspeak 54 per cent women voted for Hillary, while 53 per cent men preferred Trump. 63 per cent of white men; 52 per cent white women and 33 per cent of Latinos voted for Trump, while nearly 80 per cent African-Americans and 66 per cent Latinos preferred Hillary. Interestingly, 94 per cent African women voted for Hillary, whereas the figure for Trump was embarrassingly low: 4 per cent. 55 per cent of voters in the age group of 18-29 chose Hillary, while 53 per cent of those aged 45 years and above voted for Trump. 59 per cent urban population supported Hillary, while 62 per cent rural voters preferred Trump.52 per cent college degree holders voted for Hillary against 52 per cent non-degree holders voting for Trump. 58 per cent Protestants and 52 per cent Catholics preferred Trump against 39 per cent Protestants and 45 per cent Catholics who chose Hillary. hillarybd_111216101126.jpg 94 per cent African women voted for Hillary, whereas the figure for Trump was embarrassingly low: 4 per cent. (Photo: AP) At the end of the day, the angry ageing white men and women, frustrated, uneducated white collar workers, rural and semi-urban residents feeling excluded, Protestants and Catholics and high earning upper middle class Americans formed the Trump support base that outnumbered the educated, urban, liberal, blue collar workers and anxious non-whites, including the Hispanic, African-Americans and other immigrants. During his campaign, Trump unabashedly played on the fears of the upper middle class about higher taxes and millions of immigrants pouring in USA if Hillary moved in to the White House. Yes, 20 million Americans benefited from Obamacare but millions were angered by higher insurance premiums. Polls projected that Trump was better suited than Hillary to handle the economy and create jobs. He also exploited the sentiments of millions of Americans who felt that the US was losing its international clout and was being pushed around; it wasn’t great anymore. While his outrageous remarks about Muslims and Mexicans might have horrified liberal Democrats, they resonated with right-wing Republicans. Disclosures Resurfacing of media reports about Bill Clinton’s sexual misdemeanours and controversial acceptance of donations for his foundation didn’t help Hillary’s cause either. Not until the very end of her campaign, her team didn’t take Trump seriously. If they had mobilised more Latino and women voters, the White House race could have ended differently. The entry in the Oval Office of a rank outsider billionaire businessman mired in endless controversies who has never held any elected post has proved pollsters and political pundits totally wrong like their counterparts in India who had predicted electoral defeat of Arvind Kejriwal. Trumps had asked white collar workers to give him a Brexit-like verdict and they evidently delivered. 51 per cent voters had decided much before the last month whom to vote for. So, disclosures by several women of Trump’s sexual misbehaviour, revelations about his non-payment of taxes for years, his threat to ban Muslims from entering the US and building a wall across the border with Mexico, derogatory remarks about immigrants, his reported loss in the Presidential debates didn’t seem to matter to his die-hard supporters. Immigration Expression of their disapproval by senior Republican leaders including the war veteran John McCain of many of Trump’ utterances and reluctance of the Speaker Paul Ryan to endorse him didn’t impede Trump's bulldozer. Many thought Trump was imploding the Republican Party. But come the election result, he not only won the Presidential race but helped the Republican Party regain control of both the Houses. Apparently, he isn’t just a successful business tycoon; he is an adventurous political gambler. Conventional wisdom suggests that the Oval office and the Presidential chair will transform him; he will try to unite the bitterly divided nation. America, the nation of immigrants can’t be anti-immigrant. Just because most of the terrorists happened to be Muslims, he can’t antagonise 1.5 billion Muslims in the world. While some NAFTA provision might warrant a relook, building walls can’t be a good neighbourly policy. He will soon learn that ruffling feathers in the European capitals and precipitating tensions in relations with China and dumping TPP in the dustbin won’t serve American national interests. Above all, he will realise that running a company is easier than running a nation; profit making isn’t the driving force. There is bipartisan support for closer relations with India in the US Congress and the Senate. Trump is likely to continue the positive momentum in relations with India generated by his predecessors in spite of differences about BIT, totalisation, IPR, Visa fee, H1B Visa, solar panel etc. So long as Modi ensures healthy growth of India’s economy and improves the ease of doing business and pursues business/investment friendly policies, Trump will have no problem in doing business with him. As a matter of fact, the plain-speaking US President may succeed in thawing relations with Putin and also put in some sense in the Pakistani Generals’ minds regarding their policy towards India and Afghanistan. (Courtesy of Mail Today.) Watch: AlsoRead Demonetisation, Paytm, Black Money Archana Venkat Archana Venkat @ArchVenkat Why Paytm is happy about cash crisis, not middle India Peace, Liberals, India-Pak Omair Ahmad Omair Ahmad @OmairTAhmad Elite liberals should have no say in India-Pakistan peace building Japan, Black Money, Narendra Modi, Pollution Koel Purie Rinchet Koel Purie Rinchet @koelscouch What PM Modi can take from Japan's clear blue sky and clean air img US Presidential Elections, Donald Trump Kaveree Bamzai Kaveree Bamzai @Kavereeb I thought the day'd never come when Obama would shake hands with Trump Corruption, Nawaz Sharif, Panama Papers Ali Malik Ali Malik Nawaz Sharif's attack on Imran Khan's party exposes Pakistan's misplaced priorities #Hillary Clinton, #Donald Trump The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of DailyO.in or the India Today Group. The writers are solely responsible for any claims arising out of the contents of this article. Writer Surendra Kumar @ambksurendra The writer is a retired diplomat and expert on strategic affairs. Comment