In a significant development, the reserve bank of India, RBI, announced an extension of the deadline to return the country's highest denomination 2,000-rupee currency notes. Originally, the deadline was set for September 30th, but it has now been pushed to October 7th.

India’s central bank extends deadline for 2,000-rupee note return

<p>In a sudden development, the Reserve Bank of India on Friday announced the withdrawal of 2,000-rupee&nbsp;notes. India's central bank said that the move is a part of its 'clean note policy', which entails the withdrawal of soiled notes in circulation. People in India can deposit their 2,000-rupee notes with banks until September 30, 2023, starting Tuesday.</p>

<blockquote class="twitter-tweet">
<p dir="ltr" lang="en">₹2000 Denomination Banknotes – Withdrawal from Circulation; Will continue as Legal Tender<a href="https://t.co/2jjqSeDkSk">https://t.co/2jjqSeDkSk</a></p>
— ReserveBankOfIndia (@RBI) <a href="https://twitter.com/RBI/status/1659548576010354690?ref_src=twsrc%5Etfw">May 19, 2023</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

<p>&nbsp;</p>

<p>However, the latest move by India's central bank is unlikely to have the same impact as the 2016 demonentisation, when the Indian economy came to a grinding halt after about 86 percent of the cash in circulation became invalid overnight.&nbsp;&nbsp;This time around, however, a number of factors may help cushion the impact on the Indian economy. &nbsp;</p>

<p><b>A temporary measure&nbsp;</b></p>

<p>First things first. The 2,000-rupee note never really took off in the market. Introduced after the 2016 demonetisation, which invalidated 500-rupee and 1,000-rupee notes, the 2000-rupee note has always had a sense of 'temporariness' attached to it. &nbsp;</p>

<p>Just weeks after the 2016 demonetisation, S Gurumurthy, who later became a Board Member of RBI, had indicated that the 2000-rupee note was a “bridge” to cover the gap in cash flow after the withdrawal of 500-rupee and 1000-rupee notes.&nbsp;</p>

<p>Gurumurthy had hinted about its eventual withdrawal during an interview with an Indian news channel in December 2016: "…Banks will be told that when you get Rs 2,000 notes, you don't return them. Slowly, banks will accumulate Rs 2,000 notes and replace them with lower denomination.” &nbsp;</p>

<p>According to the RBI, 89 percent of the notes were issued before March 2017 and are well past their estimated life span of 4-5 years. The printing of 2,000-rupee notes ceased in 2018-19, clearly pointing to its decline after the new 500-rupee notes and other denominations became adequately available. &nbsp;</p>

<p>In fact, speculation about the future of the 2,000-rupee note began surfacing in 2020, when several banks started to re-calibrate their ATMs to accommodate more 500-rupee notes. &nbsp;</p>

<p><b>Not a popular denomination&nbsp;</b></p>

<p>The 2021-22 RBI report shows that the 100-rupee note remains the most-preferred denomination in day-to-day cash transactions. On the other hand, the report showed that 500-rupee note is the most widely-used currency, constituting nearly 35 percent of the total cash volume. &nbsp;</p>

<p>Clearly, 2,000-rupee notes are not the preferred choice for daily transactions. The 2,000-rupee note has limited use as a medium of exchange as the denomination is too high to be used for daily transactions like buying groceries. It comes as no surprise that the total number of 2,000-rupee notes in circulation stood at just 214 crores in 2022, down from 273 crores in 2020. That’s less than 2 percent of the total cash volume. &nbsp;</p>

<p>The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore (approximately $82 billion in 2023) in March 2018 to Rs 3.62 lakh crore (about $44 billion in 2023) in March 2023. When expressed in the form of percentages, its value in the total notes in circulation has fallen from 37.3 at its peak in March 2018 to just about 11 percent in March 2023. &nbsp;</p>

<p>There is also growing anecdotal evidence that the 2,000-rupee note is mostly used for storing 'black money', a term used in India to mean unaccounted income. Supporters of the RBI’s latest move have linked it to the fight against corruption. Former RBI deputy governor Rama Subramaniam Gandhi has called the withdrawal a standard practice, telling an Indian business portal&nbsp;that it will “discourage black money accumulation”. &nbsp;</p>

<p>To make matters worse, the latest RBI annual report shows a 54&nbsp;percent rise in counterfeits of 2,000-rupee notes between 2021 and 2022.&nbsp;</p>

<p><b>Rise of digital payments&nbsp;</b></p>

<p>When demonetisation was announced in November 2016, digital payments were in their infancy. In October that year, there were over 710 million digital transactions. One of the stated goals of the demonetisation drive was to promote a ‘less cash economy’ through online transactions. &nbsp;</p>

<p>Six months after demonetisation, digital transactions rose to over 1.11 billion and has been rising ever since.</p>

<p>Digital payments, especially via India’s flagship Unified Payment Interface (UPI) system, have grown from 0.10 million transactions worth about $6 million in October 2016 to nearly 8.9 billion transactions worth $172.4 billion in April 2023. &nbsp;</p>

<p>E-commerce has been playing a huge role in accelerating&nbsp;the push towards UPI payments. According to the '2023 Global Payments Report', cash's transaction value is expected to fall by 34 percent by 2026, while UPI transaction value is expected to rise by 88 percent by 2026.&nbsp;</p>

<p>While cash is still the king in India, it may soon lose its crown. According to UK-based data analytics firm GlobalData, the volume of cash in transaction declined from 90 percent in 2017 to about 59 percent in 2021.</p>

<p>There is no direct link between the withdrawal of 2,000-rupee notes and the rising online payments. But it will be safe to assume that the ease of transactions on UPI and other digital payment platforms&nbsp;nullify&nbsp;the need to use the 2,000-rupee note. In short, the note’s weakness as a medium of exchange became its biggest undoing. &nbsp;</p>


In a sudden development, the Reserve Bank of India on Friday announced the withdrawal of 2,000-rupee notes. India's central bank said that the move is a part of its 'clean note policy', which entails the withdrawal of soiled notes in circulation.

In a sudden development, the Reserve Bank of India on Friday announced the withdrawal of 2,000-rupee notes. India's central bank said that the move is a part of its 'clean note policy', which entails the withdrawal of soiled notes in circulation. People in India can deposit their 2,000-rupee notes with banks until September 30, 2023, starting Tuesday. ₹2000 Denomination Banknotes – Withdrawal from Circulation; Will continue as Legal Tenderhttps://t.co/2jjqSeDkSk — ReserveBankOfIndia (@RBI) May 19, 2023 However, the latest move by India's central bank is unlikely to have the same impact as the 2016 demonentisation, when the Indian economy came to a grinding halt after about 86 percent of the cash in circulation became invalid overnight. This time around, however, a number of factors may help cushion the impact on the Indian economy. A temporary measure First things first. The 2,000-rupee note never really took off in the market. Introduced after the 2016 demonetisation, which invalidated 500-rupee and 1,000-rupee notes, the 2000-rupee note has always had a sense of 'temporariness' attached to it. Just weeks after the 2016 demonetisation, S Gurumurthy, who later became a Board Member of RBI, had indicated that the 2000-rupee note was a “bridge” to cover the gap in cash flow after the withdrawal of 500-rupee and 1000-rupee notes. Gurumurthy had hinted about its eventual withdrawal during an interview with an Indian news channel in December 2016: "…Banks will be told that when you get Rs 2,000 notes, you don't return them. Slowly, banks will accumulate Rs 2,000 notes and replace them with lower denomination.” According to the RBI, 89 percent of the notes were issued before March 2017 and are well past their estimated life span of 4-5 years. The printing of 2,000-rupee notes ceased in 2018-19, clearly pointing to its decline after the new 500-rupee notes and other denominations became adequately available. In fact, speculation about the future of the 2,000-rupee note began surfacing in 2020, when several banks started to re-calibrate their ATMs to accommodate more 500-rupee notes. Not a popular denomination The 2021-22 RBI report shows that the 100-rupee note remains the most-preferred denomination in day-to-day cash transactions. On the other hand, the report showed that 500-rupee note is the most widely-used currency, constituting nearly 35 percent of the total cash volume. Clearly, 2,000-rupee notes are not the preferred choice for daily transactions. The 2,000-rupee note has limited use as a medium of exchange as the denomination is too high to be used for daily transactions like buying groceries. It comes as no surprise that the total number of 2,000-rupee notes in circulation stood at just 214 crores in 2022, down from 273 crores in 2020. That’s less than 2 percent of the total cash volume. The total value of these banknotes in circulation has declined from Rs 6.73 lakh crore (approximately $82 billion in 2023) in March 2018 to Rs 3.62 lakh crore (about $44 billion in 2023) in March 2023. When expressed in the form of percentages, its value in the total notes in circulation has fallen from 37.3 at its peak in March 2018 to just about 11 percent in March 2023. There is also growing anecdotal evidence that the 2,000-rupee note is mostly used for storing 'black money', a term used in India to mean unaccounted income. Supporters of the RBI’s latest move have linked it to the fight against corruption. Former RBI deputy governor Rama Subramaniam Gandhi has called the withdrawal a standard practice, telling an Indian business portal that it will “discourage black money accumulation”. To make matters worse, the latest RBI annual report shows a 54 percent rise in counterfeits of 2,000-rupee notes between 2021 and 2022. Rise of digital payments When demonetisation was announced in November 2016, digital payments were in their infancy. In October that year, there were over 710 million digital transactions. One of the stated goals of the demonetisation drive was to promote a ‘less cash economy’ through online transactions. Six months after demonetisation, digital transactions rose to over 1.11 billion and has been rising ever since. Digital payments, especially via India’s flagship Unified Payment Interface (UPI) system, have grown from 0.10 million transactions worth about $6 million in October 2016 to nearly 8.9 billion transactions worth $172.4 billion in April 2023. E-commerce has been playing a huge role in accelerating the push towards UPI payments. According to the '2023 Global Payments Report', cash's transaction value is expected to fall by 34 percent by 2026, while UPI transaction value is expected to rise by 88 percent by 2026. While cash is still the king in India, it may soon lose its crown. According to UK-based data analytics firm GlobalData, the volume of cash in transaction declined from 90 percent in 2017 to about 59 percent in 2021. There is no direct link between the withdrawal of 2,000-rupee notes and the rising online payments. But it will be safe to assume that the ease of transactions on UPI and other digital payment platforms nullify the need to use the 2,000-rupee note. In short, the note’s weakness as a medium of exchange became its biggest undoing.

India withdraws 2,000-rupee notes: Why the decision won’t have major impact on economy

<p>The government Friday indicated that printing of Rs 2,000 bank notes, introduced post-demonetisation in November 2016, has been stopped for now as there is enough stock in circulation.</p>

<p>In a tweet, Economic Affairs Secretary Subhash Chandra Garg said printing of notes is planned as per the projected requirement.</p>

<p>"We have more than adequate notes of Rs 2,000 in the system with over 35 per cent of notes by value in circulation being of Rs 2,000.</p>

<p>"There has been no decision regarding 2,000 rupee note production recently," the Secretary said.</p>

<p>Soon after the sudden decision to ban old Rs 500/1,000 currency notes by the government, the Reserve Bank had come out with the 2,000 rupee note along with a new look 500 rupee note as part of its massive remonetisation exercise.</p>

<p>The old 500/1,000 bank notes that were scrapped in November 2016 accounted for around 86 per cent of the total currency in circulation at that time.</p>


The government Friday indicated that printing of Rs 2,000 bank notes, introduced post-demonetisation in November 2016, has been stopped for now as there is enough stock in circulation.

The government Friday indicated that printing of Rs 2,000 bank notes, introduced post-demonetisation in November 2016, has been stopped for now as there is enough stock in circulation. In a tweet, Economic Affairs Secretary Subhash Chandra Garg said printing of notes is planned as per the projected requirement. "We have more than adequate notes of Rs 2,000 in the system with over 35 per cent of notes by value in circulation being of Rs 2,000. "There has been no decision regarding 2,000 rupee note production recently," the Secretary said. Soon after the sudden decision to ban old Rs 500/1,000 currency notes by the government, the Reserve Bank had come out with the 2,000 rupee note along with a new look 500 rupee note as part of its massive remonetisation exercise. The old 500/1,000 bank notes that were scrapped in November 2016 accounted for around 86 per cent of the total currency in circulation at that time.

Government indicates printing of Rs 2000 note stopped for now; sufficient currency in circulation

<p><strong>Stockholm Syndrome or Spiral of Silence?</strong></p>

<p>Right after demonetisation, we started a series of tracking polls to gauge the public sentiment around it. First things first: while in November 2016, as many as 85 per cent Indians believed that the troubles they faced during demonetisation were absolutely worth the fight against black money. As of today, that number has come crashing down to just 63 per cent. That's a huge drop of 22 per cent in support for the drastic move within a gap of 24 months.</p>

<p>While this number could fancy any Modi-baiter to say that the public has finally said what it wanted to say, it is equally important to note that even after so much of hardship and shine coming off the (mis)adventure, two out of three Indians still support demonetisation as of today. Yes, this is down from four out of five in 2016, but 2 out of 3 is not small a number. Certainly, in a FPTP democracy where Parties tend to get a majority with just over 33 per cent votes this figure matters.</p>

<p>However, this statement becomes interesting in light of 43 per cent Indians considering it a personal setback. Why does demonetisation still enjoy public support of a two-third majority despite negatively impacting more people? Seems PM Modi has hijacked the narrative on the debate on 'national interest'.</p>

<p>If that is true, one probability can be that a large part of the populace is struck with Stockholm Syndrome. They are in awe of the government taking such a drastic measure and pulling it off in no time. Hence, they seek to be on the side of their tormentor and sympathize with the mission of cash eradication!<br />
<br />
Demonetisation as a policy move is akin to major surgery of the body - it has beneficial impacts and side-effects that become apparent over time. When this policy was implemented in 2016, there were two questions lingering in public discourse:<br />
<br />
&nbsp; &nbsp; &nbsp;a) What will be the actual impacts of this move on nation, in the long run?<br />
&nbsp; &nbsp; &nbsp;b) How will people perceive the move today and tomorrow, given that this move was bound to generate some pain?</p>

<p>At Cvoter, we have tracked the public sentiment on this important issue since 2016 and have concluded the 7th wave of demonetisation tracker.<br />
<br />
The other probability is of stigmatisation of criticism. Prime Minister Modi in his rallies has repeatedly stated that "those hurt the most, are crying out the loudest". In other words, the critics of the policy are the ones who were hoarding the money in cash and now they were trying to vent their frustration. Thus, people could go in a spiral of silence and give socially acceptable replies when asked survey questions. If it is the former than electoral advantage will lie with the NDA but if it is the latter case, then it is advantage opposition.</p>

<p>Time has tempered the support and positive sentiment enjoyed by demonetisation. Demographic groups like middle-aged citizens, rural populace and poor have begun to wonder about the move. Although net sentiment among the population is positive, the shrinkage of support for demonetisation is consistent and an ongoing trend.</p>

<p><strong>To answer the questions asked above:</strong></p>

<p>&nbsp; &nbsp; &nbsp;a) People largely view demonetisation as a positive move and support its implementation, however, there is a distinct decline in the number of people doing so.</p>

<p>&nbsp; &nbsp; &nbsp;b) Increasing number of citizens have begun to view demonetisation as a negative event. Especially the fence sitters have begun to migrate towards the negative territory. In other words, former supporters are turning into critics and former neutrals are also turning critical regarding demonetisation.&nbsp;<br />
<br />
<strong>The Demonetisation Tracker details stand unpacked as follows:<br />
<br />
Demonetisation at a personal level</strong></p>

<p><img alt="Demonetisation" data-entity-type="file" data-entity-uuid="7279bfaf-f9d7-4bb9-a20c-86e784c95da5" src="/sites/default/files/inline-images/Demonetisation1_0.jpg" /></p>

<p>Treating of demonetisation as a setback at personal level, the support for demonetisation has now fallen to its lowest level of 56.5 per cent in wave 7 after an all-time high of 76 per cent in wave 2. The positive sentiment for demonetisation hovered in the early 70s through wave 3-5. From wave 6 onwards there has been a stark decline in support for demonetisation. Perhaps indicative of headwinds in the local economy or a brewing unemployment crisis, post-facto people have begun to increasingly identify demonetisation as a personal setback of sorts. Semi-urban population and middle-aged citizens are two demographic segments who are more negative in their sentiments towards demonetisation.</p>

<p><strong>Worth it?</strong></p>

<p><img alt="Demonetisation2" data-entity-type="file" data-entity-uuid="3d098afa-cc07-499d-893f-8c6d33323a83" src="/sites/default/files/inline-images/demonetisation2.jpg" /></p>

<p>An exercise like demonetisation was fraught with troubles for common citizens. It was the goodwill of the Union government and Prime Minister Narendra Modi that carried the day in 2016. Today, the net sentiment of demonetisation being worth it has touched an all-time low of 30%. Meaning, the difference between the yay-sayers and nay-sayers is down to just 30 per cent in wave 7, this figure was 82 per cent in wave 2. Somewhere, we have seen more and more people defecting from the yay camp to nay camp between wave 2 and wave 7. Senior citizens are still mostly in favour of the policy at a net sentiment of 54 per cent while middle-aged citizens are the least supportive, with a net sentiment of 17 per cent. Also, worth mentioning are the middle-income group and rural citizens with respective net sentiments of 22 per cent and 26.7 per cent. These voters are high on priority for PM Modi and disaffection among them should be a cause of concern.</p>

<p><br />
<strong>Was the implementation sound?<br />
<br />
<img alt="Demonetisation 3" data-entity-type="file" data-entity-uuid="23ea565a-e02d-4825-8f21-aafeb1dee673" src="/sites/default/files/inline-images/demonetisation3.jpg" /></strong></p>

<p>While economists and intelligentsia were in a different mood with respect to the implementation of demonetisation in 2016, they were pushed back by a solid 85 per cent of Indians who believed that demonetisation was implemented in a satisfactory to good manner. Today, the number of those with positive sentiment has not exactly crashed in wave 7, a 66 per cent positive sentiment still constitutes a significant decline. In other words, from more than 4 out of 5 Indian finding the implementation satisfactory, today only 2 out of 3 support its implementation mechanism. Freshers (those below 35 years of age) are more satisfied with the implementation at 72 per cent approval while higher income group is least positive and understandably so.</p>

<p><strong>How about a rollback?<br />
<br />
<img alt="Demonetisation 4" data-entity-type="file" data-entity-uuid="5671d419-1e84-4541-acea-a17b3d777479" src="/sites/default/files/inline-images/demonetisation-4.jpg" /></strong></p>

<p>India has a history of governments backtracking on unpopular policies or reforms, therefore demonetisation was considered fit for a rollback by some sections. The support for a rollback has increased between 2016-18, although the majority still supports no-rollback or backtracking. Nearly 63 per cent respondents support staying firm on the policy while 33% supported a rollback either in practice or principle. The support for staying firm is down from 84 per cent in 2016 a significant decline. Major declines have happened in the middle-aged and lower income group demographics.<br />
<br />
<strong>Who was hurt more, rich or the poor?<br />
<br />
<img alt="Demonetisation 5" data-entity-type="file" data-entity-uuid="6f7e3bba-9acc-49d7-9273-c9673ad26aa0" src="/sites/default/files/inline-images/demonetisation_5.jpg" /></strong></p>

<p>Politically, demonetisation was a safe policy as it hurt the proverbial 'haves' of a corrupt system. Surprisingly, while the perception of demonetisation has shifted across the board on this metric, the perception of demonetisation has remained largely stable. 48.5 per cent believe that demonetisation has hit the poor more, while 35.5% believe that rich were hurt more. Despite apparent stability, it is worth noting that poor continue to believe that they sacrificed more for implementation of this policy measure. Therefore, they may seek more political entitlement and an absence of such measure may trigger discontent against the government.<br />
<br />
<strong>Does living through demonetisation change your views?</strong><br />
<br />
<img alt="Demonetisation 6" data-entity-type="file" data-entity-uuid="456bc763-bfb6-4012-baa4-81011ea3ea22" src="/sites/default/files/inline-images/demonetisation_6.jpg" /></p>

<p>Fewer respondents (44 per cent) supported demonetisation after having experienced it in 2016. In 2018, 59 per cent people supported demonetisation having experienced the aftermath. However, the people who oppose it and intend to punish BJP by voting against it have risen from 13 per cent in 2016 to 20 per cent in 2018. Politically, this signifies a deep and rising polarisation over the question of demonetisation - supporters and detractors are firming up their positions.<br />
<br />
<strong>The aftershocks of demonetisation?<br />
<br />
<img alt="Demonetisation 7" data-entity-type="file" data-entity-uuid="62df15d9-c7dd-4475-8884-afdef171133f" src="/sites/default/files/inline-images/demonetisation7.jpg" /></strong></p>

<p>A majority 51 per cent people say that there is no persistent problem post-demonetisation in 2018, a huge rise when compared to 11 per cent in 2016. This is a heartening statistic for the government as it signifies that there are fewer long-term implications of demonetisation on citizens and some of the anger on ground is indicative of the memory of instantaneous events in 2016. The only statistic of concern is 18.5 per cent respondents saying that their problems have increased - this is a rise over the 12.3 per cent in 2016.&nbsp;<br />
<br />
<strong>Prime Minister's popularity? </strong><br />
<br />
<img alt="Demonetisation 8" data-entity-type="file" data-entity-uuid="9a761be7-a7f2-40ab-bf50-60ef90549440" src="/sites/default/files/inline-images/demonetisation8.jpg" /></p>

<p>Demonetisation left 17 per cent of the population in limbo and they professed no opinion in 2016 on its impact on PM Modi's popularity. Worryingly for the PM, roughly 13 per cent of these have migrated to the decreased popularity column by 2018. The column for respondents who thought this might result in increased popularity has undergone a mild decline from 52 per cent in 2016 to 49 per cent in 2018. Although PM Modi's stock remains high, the high conversion rate of neutrals to critics is a cause of concern. Perhaps the loyalists have stuck it out with the PM but the fence sitters are choosing otherwise.<br />
<br />
<strong>Sentiment on </strong><strong>economy</strong><strong>?<br />
<br />
<img alt="Demonetisation 9" data-entity-type="file" data-entity-uuid="bec9ec54-b816-4d11-8e18-7bd4313bf773" src="/sites/default/files/inline-images/demonetsaition9.jpg" /></strong></p>

<p>The dominant and almost-majority sentiment of respondents in 2016 predicted a recovery after short-term blip for the economy. 49&nbsp; per cent respondents averred that economy may dip for a while and then recover strongly. This sentiment has crashed down to 29.5 per cent now, whereas the bearish sentiment of a long-lasting recession has strengthened from 12 per cent in 2016 to 28 per cent in 2018. Interestingly, the bullish sentiment has also strengthened from 19.5 per cent in 2016 to 29 per cent in 2018. This is yet another indicator of the deep vertical divide that come to occupy Indian polity in all matters of national discourse.<br />
<br />
<strong>Conclusion: Good idea or bad idea?<br />
<br />
<img alt="Demonetisation 10" data-entity-type="file" data-entity-uuid="4102bc7f-4e1b-44c1-9fd0-261fbb86a4f0" src="/sites/default/files/inline-images/demonetisation-10.jpg" /></strong></p>

<p>In 2016, 27 per cent respondents thought that demonetisation was a good step but poorly implemented. This figure declined to 17 per cent by 2018 and most of the migration of opinion occurred towards the option of "bad step which is poorly implemented". The respondents who believed in it rose from 5 per cent in 2016 to 28.5 per cent in 2018, this indicates yet again the trend of fence sitters migrating towards the critics' category. The supporters of the demonetisation in toto declined from 66 per cent in 2016 to 51 per cent in 2018. In other words, demonetisation has lost supporters and managed to drive the fence sitters away, something somewhere has not clicked with sections of society.<br />
<br />
Although the net sentiment continues to be positive, the presence of pain in politically significant sections of society is undeniable and salient. Whether that will the have mild or huge impact on upcoming Lok Sabha election 2019 is a matter of conjecture.</p>

<p><em>(This article was originally published on The <a href="http://zeenews.india.com/blogs/63-of-indians-still-support-demonetisation-but-that-number-has-fallen-2163127.html">Zeenews</a>. Read the original article)</em></p>

<p><em>(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)</em></p>


Stockholm Syndrome or Spiral of Silence? Right after demonetisation, we started a series of tracking polls to gauge the public sentiment around it. First things first: while in November 2016, as many as 85 per cent Indians believed that the troubles they faced during demonetisation were absolutely worth the fight against black money.

Stockholm Syndrome or Spiral of Silence? Right after demonetisation, we started a series of tracking polls to gauge the public sentiment around it. First things first: while in November 2016, as many as 85 per cent Indians believed that the troubles they faced during demonetisation were absolutely worth the fight against black money. As of today, that number has come crashing down to just 63 per cent. That's a huge drop of 22 per cent in support for the drastic move within a gap of 24 months. While this number could fancy any Modi-baiter to say that the public has finally said what it wanted to say, it is equally important to note that even after so much of hardship and shine coming off the (mis)adventure, two out of three Indians still support demonetisation as of today. Yes, this is down from four out of five in 2016, but 2 out of 3 is not small a number. Certainly, in a FPTP democracy where Parties tend to get a majority with just over 33 per cent votes this figure matters. However, this statement becomes interesting in light of 43 per cent Indians considering it a personal setback. Why does demonetisation still enjoy public support of a two-third majority despite negatively impacting more people? Seems PM Modi has hijacked the narrative on the debate on 'national interest'. If that is true, one probability can be that a large part of the populace is struck with Stockholm Syndrome. They are in awe of the government taking such a drastic measure and pulling it off in no time. Hence, they seek to be on the side of their tormentor and sympathize with the mission of cash eradication! Demonetisation as a policy move is akin to major surgery of the body - it has beneficial impacts and side-effects that become apparent over time. When this policy was implemented in 2016, there were two questions lingering in public discourse: a) What will be the actual impacts of this move on nation, in the long run? b) How will people perceive the move today and tomorrow, given that this move was bound to generate some pain? At Cvoter, we have tracked the public sentiment on this important issue since 2016 and have concluded the 7th wave of demonetisation tracker. The other probability is of stigmatisation of criticism. Prime Minister Modi in his rallies has repeatedly stated that "those hurt the most, are crying out the loudest". In other words, the critics of the policy are the ones who were hoarding the money in cash and now they were trying to vent their frustration. Thus, people could go in a spiral of silence and give socially acceptable replies when asked survey questions. If it is the former than electoral advantage will lie with the NDA but if it is the latter case, then it is advantage opposition. Time has tempered the support and positive sentiment enjoyed by demonetisation. Demographic groups like middle-aged citizens, rural populace and poor have begun to wonder about the move. Although net sentiment among the population is positive, the shrinkage of support for demonetisation is consistent and an ongoing trend. To answer the questions asked above: a) People largely view demonetisation as a positive move and support its implementation, however, there is a distinct decline in the number of people doing so. b) Increasing number of citizens have begun to view demonetisation as a negative event. Especially the fence sitters have begun to migrate towards the negative territory. In other words, former supporters are turning into critics and former neutrals are also turning critical regarding demonetisation. The Demonetisation Tracker details stand unpacked as follows: Demonetisation at a personal level Treating of demonetisation as a setback at personal level, the support for demonetisation has now fallen to its lowest level of 56.5 per cent in wave 7 after an all-time high of 76 per cent in wave 2. The positive sentiment for demonetisation hovered in the early 70s through wave 3-5. From wave 6 onwards there has been a stark decline in support for demonetisation. Perhaps indicative of headwinds in the local economy or a brewing unemployment crisis, post-facto people have begun to increasingly identify demonetisation as a personal setback of sorts. Semi-urban population and middle-aged citizens are two demographic segments who are more negative in their sentiments towards demonetisation. Worth it? An exercise like demonetisation was fraught with troubles for common citizens. It was the goodwill of the Union government and Prime Minister Narendra Modi that carried the day in 2016. Today, the net sentiment of demonetisation being worth it has touched an all-time low of 30%. Meaning, the difference between the yay-sayers and nay-sayers is down to just 30 per cent in wave 7, this figure was 82 per cent in wave 2. Somewhere, we have seen more and more people defecting from the yay camp to nay camp between wave 2 and wave 7. Senior citizens are still mostly in favour of the policy at a net sentiment of 54 per cent while middle-aged citizens are the least supportive, with a net sentiment of 17 per cent. Also, worth mentioning are the middle-income group and rural citizens with respective net sentiments of 22 per cent and 26.7 per cent. These voters are high on priority for PM Modi and disaffection among them should be a cause of concern. Was the implementation sound? While economists and intelligentsia were in a different mood with respect to the implementation of demonetisation in 2016, they were pushed back by a solid 85 per cent of Indians who believed that demonetisation was implemented in a satisfactory to good manner. Today, the number of those with positive sentiment has not exactly crashed in wave 7, a 66 per cent positive sentiment still constitutes a significant decline. In other words, from more than 4 out of 5 Indian finding the implementation satisfactory, today only 2 out of 3 support its implementation mechanism. Freshers (those below 35 years of age) are more satisfied with the implementation at 72 per cent approval while higher income group is least positive and understandably so. How about a rollback? India has a history of governments backtracking on unpopular policies or reforms, therefore demonetisation was considered fit for a rollback by some sections. The support for a rollback has increased between 2016-18, although the majority still supports no-rollback or backtracking. Nearly 63 per cent respondents support staying firm on the policy while 33% supported a rollback either in practice or principle. The support for staying firm is down from 84 per cent in 2016 a significant decline. Major declines have happened in the middle-aged and lower income group demographics. Who was hurt more, rich or the poor? Politically, demonetisation was a safe policy as it hurt the proverbial 'haves' of a corrupt system. Surprisingly, while the perception of demonetisation has shifted across the board on this metric, the perception of demonetisation has remained largely stable. 48.5 per cent believe that demonetisation has hit the poor more, while 35.5% believe that rich were hurt more. Despite apparent stability, it is worth noting that poor continue to believe that they sacrificed more for implementation of this policy measure. Therefore, they may seek more political entitlement and an absence of such measure may trigger discontent against the government. Does living through demonetisation change your views? Fewer respondents (44 per cent) supported demonetisation after having experienced it in 2016. In 2018, 59 per cent people supported demonetisation having experienced the aftermath. However, the people who oppose it and intend to punish BJP by voting against it have risen from 13 per cent in 2016 to 20 per cent in 2018. Politically, this signifies a deep and rising polarisation over the question of demonetisation - supporters and detractors are firming up their positions. The aftershocks of demonetisation? A majority 51 per cent people say that there is no persistent problem post-demonetisation in 2018, a huge rise when compared to 11 per cent in 2016. This is a heartening statistic for the government as it signifies that there are fewer long-term implications of demonetisation on citizens and some of the anger on ground is indicative of the memory of instantaneous events in 2016. The only statistic of concern is 18.5 per cent respondents saying that their problems have increased - this is a rise over the 12.3 per cent in 2016. Prime Minister's popularity? Demonetisation left 17 per cent of the population in limbo and they professed no opinion in 2016 on its impact on PM Modi's popularity. Worryingly for the PM, roughly 13 per cent of these have migrated to the decreased popularity column by 2018. The column for respondents who thought this might result in increased popularity has undergone a mild decline from 52 per cent in 2016 to 49 per cent in 2018. Although PM Modi's stock remains high, the high conversion rate of neutrals to critics is a cause of concern. Perhaps the loyalists have stuck it out with the PM but the fence sitters are choosing otherwise. Sentiment on economy? The dominant and almost-majority sentiment of respondents in 2016 predicted a recovery after short-term blip for the economy. 49 per cent respondents averred that economy may dip for a while and then recover strongly. This sentiment has crashed down to 29.5 per cent now, whereas the bearish sentiment of a long-lasting recession has strengthened from 12 per cent in 2016 to 28 per cent in 2018. Interestingly, the bullish sentiment has also strengthened from 19.5 per cent in 2016 to 29 per cent in 2018. This is yet another indicator of the deep vertical divide that come to occupy Indian polity in all matters of national discourse. Conclusion: Good idea or bad idea? In 2016, 27 per cent respondents thought that demonetisation was a good step but poorly implemented. This figure declined to 17 per cent by 2018 and most of the migration of opinion occurred towards the option of "bad step which is poorly implemented". The respondents who believed in it rose from 5 per cent in 2016 to 28.5 per cent in 2018, this indicates yet again the trend of fence sitters migrating towards the critics' category. The supporters of the demonetisation in toto declined from 66 per cent in 2016 to 51 per cent in 2018. In other words, demonetisation has lost supporters and managed to drive the fence sitters away, something somewhere has not clicked with sections of society. Although the net sentiment continues to be positive, the presence of pain in politically significant sections of society is undeniable and salient. Whether that will the have mild or huge impact on upcoming Lok Sabha election 2019 is a matter of conjecture. (This article was originally published on The Zeenews. Read the original article) (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL)

Support remains strong for both demonetisation and PM Narendra Modi

<p>The demonetisation of high-value currency notes in November 2016 resulted in a widening of taxpayers&#39; base and rise in household savings, said the Economic Survey 2017-18 tabled in Parliament today.</p>

<p>The pre-budget survey further said policy priorities over the short term focused on reviving investments by mobilising savings and encouraging the conversion of gold into financial savings.</p>

<p>&quot;The share of financial saving is already rising in aggregate household saving - with a clear shift visible towards market instruments&nbsp;a phenomenon that has been helped by demonetisation,&quot; said the document authored by a team led by Chief Economic Advisor Arvind Subramanian.</p>

<p>Taking into account the pre-existing trend growth in new tax filers through regression analysis, the survey carried out a rigorous assessment of the impact of demonetisation.</p>

<p>&quot;Taking seasonality into account it is found that there is a 0.8 per cent monthly trend increase in new tax filers (annual growth of nearly 10 per cent). The level of tax filers by November 2017 was 31 per cent greater than what this trend would suggest, a statistically significant difference,&quot; said the Economic Survey 2017-18 released by the government today.</p>

<p>&quot;This translates roughly into about 18 lakh (1.8 million) additional taxpayers due to demonetisation-cum-GST, representing 3 per cent of existing taxpayers,&quot; it said.</p>

<p>Prime Minister Narendra Modi through a television address to the nation on November 8, 2016 had announced scrapping of the high value Rs 500 and Rs 1,000 banknotes to counter the menace of black money and terror funding.</p>

<p>As per the Economic Survey analysis, new filers reported an average income, in many cases, close to the income tax threshold of Rs 2.5 lakh, limiting the early revenue impact.</p>

<p>&quot;As income growth over time pushes many of the new tax filers over the threshold, the revenue dividends should increase robustly,&quot; it added.</p>

<p>Besides, the survey said one of the main aims of demonetisation and the Goods and Services Tax (GST) was to increase the formalisation of the economy and bring more Indians into the income tax net, which includes only about 5.93 crore individual taxpayers (filers and those whose tax is deducted at source in 2015-16).</p>

<p>It is equivalent to 24.7 per cent of the estimated non- agricultural workforce who pays tax.</p>

<p>After November 2016, 1.01 crore (10.1 million) filers were added compared to an average of 62 lakh (6.2 million) in the preceding six years.</p>

<p>After demonetisation, the Reserve Bank had scaled up its liquidity absorption operations using a mix of both conventional and unconventional instruments.</p>


The pre-budget survey further said policy priorities over the short term focused on reviving investments by mobilising savings and encouraging the conversion of gold into financial savings

The demonetisation of high-value currency notes in November 2016 resulted in a widening of taxpayers' base and rise in household savings, said the Economic Survey 2017-18 tabled in Parliament today. The pre-budget survey further said policy priorities over the short term focused on reviving investments by mobilising savings and encouraging the conversion of gold into financial savings. "The share of financial saving is already rising in aggregate household saving - with a clear shift visible towards market instruments a phenomenon that has been helped by demonetisation," said the document authored by a team led by Chief Economic Advisor Arvind Subramanian. Taking into account the pre-existing trend growth in new tax filers through regression analysis, the survey carried out a rigorous assessment of the impact of demonetisation. "Taking seasonality into account it is found that there is a 0.8 per cent monthly trend increase in new tax filers (annual growth of nearly 10 per cent). The level of tax filers by November 2017 was 31 per cent greater than what this trend would suggest, a statistically significant difference," said the Economic Survey 2017-18 released by the government today. "This translates roughly into about 18 lakh (1.8 million) additional taxpayers due to demonetisation-cum-GST, representing 3 per cent of existing taxpayers," it said. Prime Minister Narendra Modi through a television address to the nation on November 8, 2016 had announced scrapping of the high value Rs 500 and Rs 1,000 banknotes to counter the menace of black money and terror funding. As per the Economic Survey analysis, new filers reported an average income, in many cases, close to the income tax threshold of Rs 2.5 lakh, limiting the early revenue impact. "As income growth over time pushes many of the new tax filers over the threshold, the revenue dividends should increase robustly," it added. Besides, the survey said one of the main aims of demonetisation and the Goods and Services Tax (GST) was to increase the formalisation of the economy and bring more Indians into the income tax net, which includes only about 5.93 crore individual taxpayers (filers and those whose tax is deducted at source in 2015-16). It is equivalent to 24.7 per cent of the estimated non- agricultural workforce who pays tax. After November 2016, 1.01 crore (10.1 million) filers were added compared to an average of 62 lakh (6.2 million) in the preceding six years. After demonetisation, the Reserve Bank had scaled up its liquidity absorption operations using a mix of both conventional and unconventional instruments.

'Note ban led to wider taxpayers' base,more household savings'

<p>In&nbsp;a joint raid, the National Investigation Agency (NIA) and Uttar Pradesh police recovered demonetised currency notes worth nearly Rs 100 crore from an under-construction house in Kanpur, late Tuesday.&nbsp;</p>

<p>Old notes of Rs 1000 and Rs 500 were banned in November 2016 to curb corruption and black money.</p>

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<p dir="ltr" lang="en"><a href="https://twitter.com/hashtag/WATCH?src=hash&amp;ref_src=twsrc%5Etfw">#WATCH</a> Police seized demonetized currency worth crores from a residential premises in Kanpur. <a href="https://t.co/Hh7sLrWwoG">pic.twitter.com/Hh7sLrWwoG</a></p>
&mdash; ANI UP (@ANINewsUP) <a href="https://twitter.com/ANINewsUP/status/953498273557311489?ref_src=twsrc%5Etfw">January 17, 2018</a></blockquote>
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<p>At least 17 people also have been arrested in&nbsp;connection with the case.</p>

<p>The notes were found stacked under a bed in three rooms of the under-construction house of builder Anand Khatri in Swarup Nagar.&nbsp;</p>

<p>The police also raided&nbsp;seventeen other places including two hotels in Gumti, Jarnailganj to seize the old currency which amounted to Rs 100 crores.</p>

<p>As per media reports, the money was kept for exchange through hawala and NRI transactions in Dubai and other countries.</p>

<p>Since the demonetisation was implemented, a large part of the money has been illegally channelled into the banking system.</p>

<p>Earlier NIA recovered 36 crores of the scrapped notes in November 2017.</p>

<p>In August&nbsp;last year, the Reserve Bank of India informed that 99% of the old currency returned after demonetisation.</p>


17 people have been arrested in this regard

In a joint raid, the National Investigation Agency (NIA) and Uttar Pradesh police recovered demonetised currency notes worth nearly Rs 100 crore from an under-construction house in Kanpur, late Tuesday. Old notes of Rs 1000 and Rs 500 were banned in November 2016 to curb corruption and black money. #WATCH Police seized demonetized currency worth crores from a residential premises in Kanpur. pic.twitter.com/Hh7sLrWwoG — ANI UP (@ANINewsUP) January 17, 2018 × At least 17 people also have been arrested in connection with the case. The notes were found stacked under a bed in three rooms of the under-construction house of builder Anand Khatri in Swarup Nagar. The police also raided seventeen other places including two hotels in Gumti, Jarnailganj to seize the old currency which amounted to Rs 100 crores. As per media reports, the money was kept for exchange through hawala and NRI transactions in Dubai and other countries. Since the demonetisation was implemented, a large part of the money has been illegally channelled into the banking system. Earlier NIA recovered 36 crores of the scrapped notes in November 2017. In August last year, the Reserve Bank of India informed that 99% of the old currency returned after demonetisation.

Rs 100 crore found stacked under a bed in Kanpur home

<p>The Indian economy is at a crossroads. The economic restructuring that began with the November 8 announcement of demonetisation, now faces the risk of being derailed by parties with vested interests. The process of demonetisation and the implementation of the Goods and Services Tax are important economic disruptions that can go a long way in overhauling the dilapidated structures of Indian economy.</p>

<p>Critics have suggested that demonetisation could not achieve its declared goal and are, therefore, quick to pronounce it as a monumental failure. The former prime minister even went to the extent of calling the process a &#39;legalised plunder&#39;. It is, however, important to highlight why demonetisation was a critically important disruption that unveiled the depths of the black economy in India.</p>

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<h5>Post-demonetisation, one of the major successes of the exercise has been the identification of additional 56 lakh taxpayers who filed e-ITRs between 1 April and 5 August 2017</h5>
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<p>Post-demonetisation, one of the major successes of the exercise has been the identification of additional 56 lakh taxpayers who filed e-ITRs between 1 April and 5 August 2017, while for the entire period of 2016-17, a staggering 91 lakh new taxpayers were added to the list. The number is expected to rise further with the implementation of complementary tax reforms. An estimated one crore new taxpayers will be contributing to the country&#39;s kitty by 2018.</p>

<p>For those who questioned the rationale of the process on the grounds that 99 per cent of the money came back into the system, it becomes important to highlight that while this may have gone against the government&#39;s initial calculations, the return of currency into the system was not as big a failure as is being made out. On the contrary, as previously unaccounted for money was deposited into the system, a large part of it was taxed, making major contributions to the government&#39;s kitty. The currency trail was, therefore, significant in the identification of the aforementioned pool of new taxpayers, who remained previously untaxed.</p>

<p>The exercise also helped in identifying a remarkable 3 lakh shell companies that were used for diverting funds and committing tax frauds. A crackdown on such companies was an effective anti-money laundering steps that was made possible by the currency trail identified post-demonetisation. While the usual narrative against the exercise uses the benchmark of &ldquo;99% cash returned&rdquo; to chastise the government, the actual benefits accrued from the disruption are brushed aside.</p>

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<h5>The GST helped widen the government&#39;s tax net to incorporate the previously un-taxed business enterprises.</h5>
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<p>8 months after demonetisation, the implementation of the GST as an indirect tax reform measure is another very important economic reform taken by the government. The GST helped widen the government&#39;s tax net to incorporate the previously un-taxed business enterprises. The self-corrective mechanisms incorporated in the GST structure, namely, the input tax credits against double taxation helps squeeze the noose around those who used to pass the tax burden onto the customers/consumers but did not pass on the benefits to the government.</p>

<p>Not only has the implementation of the GST acted as a stepping stone towards the creation of a unified market structure, it has also helped the government identify direct taxpayers. It has expanded the indirect tax base to 6.6 lakh new business agents, previously outside the tax net. Besides, the GST has helped in a greater formalisation of the economy; a process that will ensure minimum wages for workers as well as formal work contracts for labourers that will go a long way in mitigating the evil of labour exploitation.&nbsp;</p>

<p>A greater formalisation of the economy will also help small businessmen keep a real-time record of their tax payments, and help them gain greater access to formalised credit options, thus, ending a previously faced constraint on credit-access. A digital record on the financial health of companies will also streamline investments and ultimately work to the benefit of consumers.</p>

<p>It is no surprise then that through the implementation of demonetisation and GST, within a year the government has announced three major capital-intensive schemes: the Saubhagya scheme to provide last mile electric connectivity to rural households, the Bharatmala scheme to upgrade the infrastructure of the country on a mission mode basis, and the bank recapitalisation scheme to improve the health of ailing public sector banks. While none of these schemes are &#39;populist&#39; in the true sense, they still cater to the needs of those on the lowest rung of our socio-economic ladder.</p>

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<h5>The government&#39;s emphasis on long-term economic reforms and socio-economic restructuring will go a long way in ushering in the idea of clean money.</h5>
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<p>To further deepen and widen its tax net, the government now must address the issue of high rates of taxes and bring them down to further encourage a voluntary filing of tax returns. The GST structures will need to be worked out so that filing of returns can be done effectively and easily. The government must be credited for putting a robust feedback mechanism in place. This must be used pro-actively to streamline the financial system by the end of this financial year.</p>

<p>For the rest, it must be remembered that no country can survive on an economic model that rests on a parallel system of white and black money. The unhindered flow from white-to-black-to-white has worked to hollow out our economic system. The government&#39;s emphasis on long-term economic reforms and socio-economic restructuring will go a long way in ushering in the idea of clean money. It has also instilled fear among those who choose to evade taxation and boost the morale of those who sustain on purely white incomes. This in itself, is an important moral victory for many.</p>


Demonetisation has instilled fear among those who choose to evade taxation and boost the morale of those who sustain on purely white incomes

The Indian economy is at a crossroads. The economic restructuring that began with the November 8 announcement of demonetisation, now faces the risk of being derailed by parties with vested interests. The process of demonetisation and the implementation of the Goods and Services Tax are important economic disruptions that can go a long way in overhauling the dilapidated structures of Indian economy. Critics have suggested that demonetisation could not achieve its declared goal and are, therefore, quick to pronounce it as a monumental failure. The former prime minister even went to the extent of calling the process a 'legalised plunder'. It is, however, important to highlight why demonetisation was a critically important disruption that unveiled the depths of the black economy in India. Post-demonetisation, one of the major successes of the exercise has been the identification of additional 56 lakh taxpayers who filed e-ITRs between 1 April and 5 August 2017 × Post-demonetisation, one of the major successes of the exercise has been the identification of additional 56 lakh taxpayers who filed e-ITRs between 1 April and 5 August 2017, while for the entire period of 2016-17, a staggering 91 lakh new taxpayers were added to the list. The number is expected to rise further with the implementation of complementary tax reforms. An estimated one crore new taxpayers will be contributing to the country's kitty by 2018. For those who questioned the rationale of the process on the grounds that 99 per cent of the money came back into the system, it becomes important to highlight that while this may have gone against the government's initial calculations, the return of currency into the system was not as big a failure as is being made out. On the contrary, as previously unaccounted for money was deposited into the system, a large part of it was taxed, making major contributions to the government's kitty. The currency trail was, therefore, significant in the identification of the aforementioned pool of new taxpayers, who remained previously untaxed. The exercise also helped in identifying a remarkable 3 lakh shell companies that were used for diverting funds and committing tax frauds. A crackdown on such companies was an effective anti-money laundering steps that was made possible by the currency trail identified post-demonetisation. While the usual narrative against the exercise uses the benchmark of “99% cash returned” to chastise the government, the actual benefits accrued from the disruption are brushed aside. The GST helped widen the government's tax net to incorporate the previously un-taxed business enterprises. × 8 months after demonetisation, the implementation of the GST as an indirect tax reform measure is another very important economic reform taken by the government. The GST helped widen the government's tax net to incorporate the previously un-taxed business enterprises. The self-corrective mechanisms incorporated in the GST structure, namely, the input tax credits against double taxation helps squeeze the noose around those who used to pass the tax burden onto the customers/consumers but did not pass on the benefits to the government. Not only has the implementation of the GST acted as a stepping stone towards the creation of a unified market structure, it has also helped the government identify direct taxpayers. It has expanded the indirect tax base to 6.6 lakh new business agents, previously outside the tax net. Besides, the GST has helped in a greater formalisation of the economy; a process that will ensure minimum wages for workers as well as formal work contracts for labourers that will go a long way in mitigating the evil of labour exploitation. A greater formalisation of the economy will also help small businessmen keep a real-time record of their tax payments, and help them gain greater access to formalised credit options, thus, ending a previously faced constraint on credit-access. A digital record on the financial health of companies will also streamline investments and ultimately work to the benefit of consumers. It is no surprise then that through the implementation of demonetisation and GST, within a year the government has announced three major capital-intensive schemes: the Saubhagya scheme to provide last mile electric connectivity to rural households, the Bharatmala scheme to upgrade the infrastructure of the country on a mission mode basis, and the bank recapitalisation scheme to improve the health of ailing public sector banks. While none of these schemes are 'populist' in the true sense, they still cater to the needs of those on the lowest rung of our socio-economic ladder. The government's emphasis on long-term economic reforms and socio-economic restructuring will go a long way in ushering in the idea of clean money. × To further deepen and widen its tax net, the government now must address the issue of high rates of taxes and bring them down to further encourage a voluntary filing of tax returns. The GST structures will need to be worked out so that filing of returns can be done effectively and easily. The government must be credited for putting a robust feedback mechanism in place. This must be used pro-actively to streamline the financial system by the end of this financial year. For the rest, it must be remembered that no country can survive on an economic model that rests on a parallel system of white and black money. The unhindered flow from white-to-black-to-white has worked to hollow out our economic system. The government's emphasis on long-term economic reforms and socio-economic restructuring will go a long way in ushering in the idea of clean money. It has also instilled fear among those who choose to evade taxation and boost the morale of those who sustain on purely white incomes. This in itself, is an important moral victory for many.

Demonetisation and GST are not the 'demons' as some argue

<p>Congress vice-president Rahul Gandhi has said that demonetisation was a &quot;tragedy&quot; and a &quot;thoughtless act&quot; by the government.</p>

<p>&quot;Demonetisation is a tragedy. We stand with millions of honest Indians, whose lives &amp; livelihoods were destroyed by PM&rsquo;s thoughtless act,&quot; he said in a tweet posted on Wednesday, on the first anniversary of demonetisation.</p>

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<p dir="ltr" lang="en">Demonetisation is a tragedy. We stand with millions of honest Indians, whose lives &amp; livelihoods were destroyed by PM&rsquo;s thoughtless act.</p>
&mdash; Office of RG (@OfficeOfRG) <a href="https://twitter.com/OfficeOfRG/status/928073578733387776?ref_src=twsrc%5Etfw">November 8, 2017</a></blockquote>
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<p>He also used a Hindi couplet to attack the central government.</p>

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<p dir="ltr" lang="en">Demonetisation is a tragedy. We stand with millions of honest Indians, whose lives &amp; livelihoods were destroyed by PM&rsquo;s thoughtless act.</p>
&mdash; Office of RG (@OfficeOfRG) <a href="https://twitter.com/OfficeOfRG/status/928073578733387776?ref_src=twsrc%5Etfw">November 8, 2017</a></blockquote>
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<p>Gandhi will visit Surat in Gujarat today to participate in a candle-light vigil there as part of the Opposition parties&#39; &quot;Black Day&quot; protest.</p>

<p>Congress and other Opposition parties have decided to observe November 8, the date when Prime Minister Narendra Modi last year announced demonetisation, as &quot;Black Day&quot;.</p>

<p>Gandhi&#39;s decision to take part in the protest in Gujarat is significant as the state is going to polls next month.</p>

<p>On the eve of the demonetisation anniversary, former prime minister <a href="http://www.wionews.com/india-news/i-repeat-was-organised-loot-and-legalised-plunder-manmohan-singh-on-demonetisation-23656">Manmohan Singh attacked the&nbsp;BJP-led central government</a> on Tuesday, terming the note ban&nbsp;as &quot;organised loot&quot; and &quot;legalised plunder&quot;.</p>

<p>Hitting out at the Congress for observing the Demonetisation anniversary as Black Day, Haryana minister Anil Vij has said, &quot;only those parties which have black money left with them&quot; will observe November 8, the first anniversary of demonetisation, as &quot;black day&quot;.</p>

<p>He added that November 8 can be observed as &quot;black day&quot; for the Congress which was involved in scams of around Rs 12 lakh crore.&nbsp;</p>

<p>He praised his government for implementing Demonetisation and said that the &quot;revolutionary step&quot; can only be taken by a strong government.&nbsp;</p>

<p>He claimed that Demonetisation has not only promoted cashless payment system but it has also led to an increase in the number of taxpayers.&nbsp;</p>

<p>&nbsp;</p>


Gandhi will visit Surat in Gujarat today to participate in a candle-light vigil there as part of the Opposition parties' 'Black Day' protest

Congress vice-president Rahul Gandhi has said that demonetisation was a "tragedy" and a "thoughtless act" by the government. "Demonetisation is a tragedy. We stand with millions of honest Indians, whose lives & livelihoods were destroyed by PM’s thoughtless act," he said in a tweet posted on Wednesday, on the first anniversary of demonetisation. Demonetisation is a tragedy. We stand with millions of honest Indians, whose lives & livelihoods were destroyed by PM’s thoughtless act. — Office of RG (@OfficeOfRG) November 8, 2017 × He also used a Hindi couplet to attack the central government. Demonetisation is a tragedy. We stand with millions of honest Indians, whose lives & livelihoods were destroyed by PM’s thoughtless act. — Office of RG (@OfficeOfRG) November 8, 2017 × Gandhi will visit Surat in Gujarat today to participate in a candle-light vigil there as part of the Opposition parties' "Black Day" protest. Congress and other Opposition parties have decided to observe November 8, the date when Prime Minister Narendra Modi last year announced demonetisation, as "Black Day". Gandhi's decision to take part in the protest in Gujarat is significant as the state is going to polls next month. On the eve of the demonetisation anniversary, former prime minister Manmohan Singh attacked the BJP-led central government on Tuesday, terming the note ban as "organised loot" and "legalised plunder". Hitting out at the Congress for observing the Demonetisation anniversary as Black Day, Haryana minister Anil Vij has said, "only those parties which have black money left with them" will observe November 8, the first anniversary of demonetisation, as "black day". He added that November 8 can be observed as "black day" for the Congress which was involved in scams of around Rs 12 lakh crore. He praised his government for implementing Demonetisation and said that the "revolutionary step" can only be taken by a strong government. He claimed that Demonetisation has not only promoted cashless payment system but it has also led to an increase in the number of taxpayers.

Demonetisation a tragedy, thoughtless act: Rahul Gandhi

<p>Ten months after currency notes of Rs. 500 and Rs. 1,000 were scrapped on November 8 last year, the ghost of demonetisation continues to haunt Deepak Badavne.</p>

<p>In early November, Badavne had harvested 31 quintals of cotton from his 2.5-acre farm. He expected good returns on it. &ldquo;The trader arranged for the truck and loaded the cotton from my house,&rdquo; he says. But just then, the demonetisation-induced cash crunch hit the farm sector. The payment for Deepak&rsquo;s cotton didn&rsquo;t materialise. &lsquo;The trader is now saying he will pay by Diwali [by mid-October 2017],&rdquo; he says.</p>

<p>The trader owes Badavne Rs. 178,483 for his cotton yield. A cheque he received for this amount on March 24 bounced&ndash; thrice. &nbsp;&ldquo;I am not the only one,&rdquo; says Deepak, 31, sitting under a tree in Karajgaon village on the outskirts of Aurangabad city in Marathwada, Maharashtra. &ldquo;There are others in my village who have been similarly duped.&rdquo;</p>

<p>Badavne, who lives in a joint family and has two children, has gathered some of them in this village of 1,300 people &ndash; people who are also waiting for their dues or have received cheques that bounced. In April, nearly six months after the demonetisation, Deepak&rsquo;s brother Jeetendra, 38, got a nearly two lakh rupees for 34 quintals of cotton. That too bounced. &ldquo;What am I supposed to do with this if I cannot have cash in hand?&rdquo; he asks. &ldquo;I need cash to buy inputs for the cropping season [that started in mid-June].&rdquo;</p>

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<p>Deepak Badavne holds up the cheque he received in return for his cotton &ndash; it bounced three times (Others)</p>
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<p>On the morning of our visit in June, the trader in question had left the village to avoid reporters. So he was unavailable to give his version of the events, and is therefore not named in this story.</p>

<p>When the angry group barged into his house, his mother threatened that they would be responsible if her son committed suicide. &ldquo;The trader said the cash crunch was responsible for the delays in payment,&rdquo; says Deepak, &ldquo;but the sowing season does not wait for us. We have filed an FIR [at the Karmad police station, around four kilometres away, on charges of cheating].&rdquo;</p>

<p>In Hasanabadwadi village on the Aurangabad-Jalna highway, Atul Antarai, 28, was also struggling in June, months after the demonetisation. He has 1,000 mosambi trees on five acres. &ldquo;I have a private well and borewell,&rdquo; he says, &ldquo;so I manage to water the orchard better than many farmers cultivating mosambi around me.&rdquo;</p>

<p>In the first week of November, a trader had approached Antarai and offered him Rs. 6.5 lakhs for the entire produce. &ldquo;I had planned on harvesting around February,&rdquo; he says. &ldquo;And going by the rate of Rs. 30-35 per kilo, I expected to make Rs. 10 lakhs from the crop. I told the trader I would get back to him.&rdquo;</p>

<p>On November 8, however, after the government&rsquo;s &lsquo;notebandi&rsquo; order, the same trader did not have the cash anymore, and rates plummeted. &ldquo;I eventually got Rs. 1.25 lakh for the entire yield,&rdquo; says Atul. &ldquo;Where I had expected Rs. 30&ndash;35 a kilo, I ended up selling the fruit at Rs. 3 a kilo.&rdquo;</p>

<p><strong>Watch video</strong>: &lsquo;<em>I got 3 rupees a kilo instead of 30-35 for my </em><em>mosambi</em><em>&rsquo; after the demonetisation last November, says Atul Antarai of Hasanabadwadi village</em></p>

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<p>Every year, the transactions for crops in Marathwada are made in cash. Relatively larger amounts than those for food crops get exchanged for cotton and mosambi &ndash; so after the demonetisation, when cash was in short supply, the impact on cotton and mosambi farmers was especially severe. November is when Marathwada&rsquo;s farmers harvest cotton, and it&rsquo;s just a few months before the year&rsquo;s first mosambi harvest of February-March (the second one is usually in August-September).</p>

<p>The rates plummeted and traders did not have cash to buy stock from farmers. The cashless future that demonetisation promised never came, and many in rural Marathwada scoff at the idea. &ldquo;ATMs are concentrated in cities,&rdquo; says Ashok Yedhe, a farmer in Anjanvati village of Beed district, who cultivates soyabean and jowar. &ldquo;Just to get to a bank or an ATM takes kilometres of travel for us.&rdquo;</p>

<p>ATMs in rural areas are few and far between. &nbsp;Of the 222,762 ATMs in the entire country, according to Reserve Bank of India (RBI) data (till June 2017) only 40,997 are in rural centres &ndash; this means less than 20 per cent of the ATMs in India are available for the 69 per cent of the population that is classified as rural (by Census 2011).</p>

<p>Devidas Tuljapurkar, joint secretary of the All India Bank Employees Association, points out that it is also important to note the run time of ATMs. &quot;In cities, the cash is replenished almost every day,&quot; he says. &quot;That is not the case in rural areas, where the run time of ATMs is about 20 per cent what it is in cities.&quot; &nbsp;</p>

<p>Besides, Yedhe points out, online transactions cost more, and a farmer cannot afford to pay extra money for every such transaction. In any case, he explains, cash is central to any transaction in a rural economy. &ldquo;We cannot Paytm 250 rupees to an agriculture labourer,&rdquo; he laughs. &ldquo;Most of the time, a farmer gets cash and uses it immediately to buy inputs or rations or fodder. The entire trade chain in rural India is cash-based.&rdquo;</p>

<p>To add to the cash crunch after November 2016, banks in rural areas were the last to get the new currency notes. For months, the RBI did not even accept the old notes deposited with the district cooperative banks, where most farmers have their accounts. Hanumant Jadhav, managing director of the Latur District Cooperative Bank, says, &ldquo;For 7-8 months we continued to struggle when district banks were not remonetised and all our ATMs were dry.&rdquo;</p>

<p><i><strong>Watch video</strong>:&nbsp;</i><i>&#39;</i><i>A farmer can&#39;t go cashless&#39;, insists Deepak Badavne of Karajgaon village</i></p>

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<p>In Karajgaon too, farmers say the push towards a cashless economy is city-centric, ignoring the majority living in the villages. &ldquo;We usually use cash the same day we get it from any source,&rdquo; says Deepak. &ldquo;If we start going to the bank to withdraw cash for each transaction, can you imagine the amount of money and time we would be spending? Cashless sounds fine in Mumbai and Delhi, but it is a farce in rural India.&rdquo;</p>

<p>Deepak has been unable to repay the 2016-17 agricultural season&rsquo;s bank loan. &ldquo;I owe the Bank of Maharashtra in Karmad Rs. 1.5 lakhs,&rdquo; he says. &ldquo;I have been repaying every year, so I am eligible for a new crop loan. But this year, I have been a defaulter.&rdquo;</p>

<p>Deepak has now borrowed Rs. 240,000 from a private moneylender at 3 per cent interest per month. He already has a debt of Rs. 2 lakhs from a private moneylender. He has used the new loan for the ongoing kharif season and repaid a part of his bank loan. But he remains worried. &ldquo;The harvest does not look promising this year due to intermittent rainfall,&rdquo; he says.</p>

<p>And in Hasanabadwadi village, Atul is wondering if he will have to phase out his mosambi orchard. &ldquo;The well has run dry. Rainfall has not been great. The harvest [the year&rsquo;s second, of August-September] could be mediocre. And because I lost a lot of money after demonetisation, it is difficult to purchase water to keep the plants alive.&quot;</p>

<p>This&nbsp;<a href="https://ruralindiaonline.org/articles/the-ghost-of-demonetisation" rel="nofollow" target="blank">article</a>&nbsp;was originally&nbsp;published on 15/ 09/ 2017 on the&nbsp;<a href="https://ruralindiaonline.org/" rel="nofollow" target="blank">People&#39;s Archive of Rural India.</a></p>

<p>Photos Credit:&nbsp;Shrirang Swarge</p>


In rural Marathwada, where the agrarian trade chain is cash-based, farmers are still reeling from the effects of the November 2016 demonetisation ? with bounced cheques, poor access to banks, and falling crop prices

Ten months after currency notes of Rs. 500 and Rs. 1,000 were scrapped on November 8 last year, the ghost of demonetisation continues to haunt Deepak Badavne. In early November, Badavne had harvested 31 quintals of cotton from his 2.5-acre farm. He expected good returns on it. “The trader arranged for the truck and loaded the cotton from my house,” he says. But just then, the demonetisation-induced cash crunch hit the farm sector. The payment for Deepak’s cotton didn’t materialise. ‘The trader is now saying he will pay by Diwali [by mid-October 2017],” he says. The trader owes Badavne Rs. 178,483 for his cotton yield. A cheque he received for this amount on March 24 bounced– thrice. “I am not the only one,” says Deepak, 31, sitting under a tree in Karajgaon village on the outskirts of Aurangabad city in Marathwada, Maharashtra. “There are others in my village who have been similarly duped.” Badavne, who lives in a joint family and has two children, has gathered some of them in this village of 1,300 people – people who are also waiting for their dues or have received cheques that bounced. In April, nearly six months after the demonetisation, Deepak’s brother Jeetendra, 38, got a nearly two lakh rupees for 34 quintals of cotton. That too bounced. “What am I supposed to do with this if I cannot have cash in hand?” he asks. “I need cash to buy inputs for the cropping season [that started in mid-June].” Deepak Badavne holds up the cheque he received in return for his cotton – it bounced three times (Others) × On the morning of our visit in June, the trader in question had left the village to avoid reporters. So he was unavailable to give his version of the events, and is therefore not named in this story. When the angry group barged into his house, his mother threatened that they would be responsible if her son committed suicide. “The trader said the cash crunch was responsible for the delays in payment,” says Deepak, “but the sowing season does not wait for us. We have filed an FIR [at the Karmad police station, around four kilometres away, on charges of cheating].” In Hasanabadwadi village on the Aurangabad-Jalna highway, Atul Antarai, 28, was also struggling in June, months after the demonetisation. He has 1,000 mosambi trees on five acres. “I have a private well and borewell,” he says, “so I manage to water the orchard better than many farmers cultivating mosambi around me.” In the first week of November, a trader had approached Antarai and offered him Rs. 6.5 lakhs for the entire produce. “I had planned on harvesting around February,” he says. “And going by the rate of Rs. 30-35 per kilo, I expected to make Rs. 10 lakhs from the crop. I told the trader I would get back to him.” On November 8, however, after the government’s ‘notebandi’ order, the same trader did not have the cash anymore, and rates plummeted. “I eventually got Rs. 1.25 lakh for the entire yield,” says Atul. “Where I had expected Rs. 30–35 a kilo, I ended up selling the fruit at Rs. 3 a kilo.” Watch video: ‘I got 3 rupees a kilo instead of 30-35 for my mosambi’ after the demonetisation last November, says Atul Antarai of Hasanabadwadi village × Every year, the transactions for crops in Marathwada are made in cash. Relatively larger amounts than those for food crops get exchanged for cotton and mosambi – so after the demonetisation, when cash was in short supply, the impact on cotton and mosambi farmers was especially severe. November is when Marathwada’s farmers harvest cotton, and it’s just a few months before the year’s first mosambi harvest of February-March (the second one is usually in August-September). The rates plummeted and traders did not have cash to buy stock from farmers. The cashless future that demonetisation promised never came, and many in rural Marathwada scoff at the idea. “ATMs are concentrated in cities,” says Ashok Yedhe, a farmer in Anjanvati village of Beed district, who cultivates soyabean and jowar. “Just to get to a bank or an ATM takes kilometres of travel for us.” ATMs in rural areas are few and far between. Of the 222,762 ATMs in the entire country, according to Reserve Bank of India (RBI) data (till June 2017) only 40,997 are in rural centres – this means less than 20 per cent of the ATMs in India are available for the 69 per cent of the population that is classified as rural (by Census 2011). Devidas Tuljapurkar, joint secretary of the All India Bank Employees Association, points out that it is also important to note the run time of ATMs. "In cities, the cash is replenished almost every day," he says. "That is not the case in rural areas, where the run time of ATMs is about 20 per cent what it is in cities." Besides, Yedhe points out, online transactions cost more, and a farmer cannot afford to pay extra money for every such transaction. In any case, he explains, cash is central to any transaction in a rural economy. “We cannot Paytm 250 rupees to an agriculture labourer,” he laughs. “Most of the time, a farmer gets cash and uses it immediately to buy inputs or rations or fodder. The entire trade chain in rural India is cash-based.” To add to the cash crunch after November 2016, banks in rural areas were the last to get the new currency notes. For months, the RBI did not even accept the old notes deposited with the district cooperative banks, where most farmers have their accounts. Hanumant Jadhav, managing director of the Latur District Cooperative Bank, says, “For 7-8 months we continued to struggle when district banks were not remonetised and all our ATMs were dry.” Watch video: 'A farmer can't go cashless', insists Deepak Badavne of Karajgaon village × In Karajgaon too, farmers say the push towards a cashless economy is city-centric, ignoring the majority living in the villages. “We usually use cash the same day we get it from any source,” says Deepak. “If we start going to the bank to withdraw cash for each transaction, can you imagine the amount of money and time we would be spending? Cashless sounds fine in Mumbai and Delhi, but it is a farce in rural India.” Deepak has been unable to repay the 2016-17 agricultural season’s bank loan. “I owe the Bank of Maharashtra in Karmad Rs. 1.5 lakhs,” he says. “I have been repaying every year, so I am eligible for a new crop loan. But this year, I have been a defaulter.” Deepak has now borrowed Rs. 240,000 from a private moneylender at 3 per cent interest per month. He already has a debt of Rs. 2 lakhs from a private moneylender. He has used the new loan for the ongoing kharif season and repaid a part of his bank loan. But he remains worried. “The harvest does not look promising this year due to intermittent rainfall,” he says. And in Hasanabadwadi village, Atul is wondering if he will have to phase out his mosambi orchard. “The well has run dry. Rainfall has not been great. The harvest [the year’s second, of August-September] could be mediocre. And because I lost a lot of money after demonetisation, it is difficult to purchase water to keep the plants alive." This article was originally published on 15/ 09/ 2017 on the People's Archive of Rural India. Photos Credit: Shrirang Swarge

The ghost of demonetisation

<p>When Indian Prime Minister Narendra Modi announced the withdrawal of ?500 (US$7.40) and ?1,000 (US$15) banknotes from circulation in November 2016, the government said its demonetisation drive would curb India&rsquo;s shadow economy and suppress the use of illicit and counterfeit cash in the economy.</p>

<p>If there&rsquo;s one sector that&rsquo;s done particularly well as a result of government&rsquo;s move, it&rsquo;s the banking sector.</p>

<p>Banks received deposits worth ?6 trillion (US$88 billion) and overall banking deposits with the Reserve Bank of India reached a record high of ?4.3 trillion (US$63.1 billion) within two weeks of the currency ban.</p>

<p>So the demonetisation was a well-planned move in terms of the health of the Indian banking system. Five months before the drive, the total amount of gross non-performing assets (loans are classified like this after 90 days of non-payment of interest or principal) for public and private sector banks was around ?6lakh crore (US$88 billion).</p>

<p>To understand how big this problem was, one needs to see the figure against the total loans given out by India&rsquo;s banking system. That ratio corresponded to 11.8 per cent of total credit advanced in September 2016, and it&rsquo;s expected to reach 12.5 per cent by March 2017.</p>

<p>The bulk of these non-performing assets are from public sector banks, and were mainly lent to finance the basic metal and metal products sector, the textile industry and the beverages sector.</p>

<p>In its December 2016 Financial Stability Report, the Reserve Bank noted that the asset quality of public sector banks had deteriorated further between March and September 2016. This reflected the failing health of the Indian banking system, which is a major provider of credit to industry and business. If not checked in time, it can have serious repercussions for the economy.</p>

<p><strong>Bringing currency back</strong></p>

<p>So calling the demonetisation drive a complete failure, as many economists and financial analysts have done then, is to fail to respect this well thought-out strategy for saving India&rsquo;s banks. Demonetisation has fulfilled the objective of bringing currency back into the banking system.</p>

<p>Within the first month, practically all demonetised currency notes in the country were back in the bank vaults. The sudden flow of cash to public sector banks gave them an instant lifeline clearly visible across the banking system.</p>

<p>Enriched by these higher deposits, the country&rsquo;s largest lender, the State Bank of India, slashed its benchmark lending rate by 0.9 per cent. In other words, after difficulty dealing with bad loans, after demonetisation banks are now able to provide cheap financing.</p>

<p>Not only did lending rates get slashed, the overnight marginal cost of funds-based lending rate (the minimum interest rate below which a bank cannot lend) fell to 7.75 per cent from 8.65 per cent. Meanwhile, three-year loan rates came down to 8.15 per cent from 9.05 per cent. While these percentages may seem small, it was a huge turnaround, which were reeling under the pressure of the bad loans.</p>

<p><strong>Another winning sector</strong></p>

<p>Amid the frenzy after demonetisation, another sector that got a big boost was that of financial technology start-ups, including digital wallet and other mobile payment companies. Due to the cash crunch, many people turned to digital wallets that can be used in conjunction with mobile payment systems, allowing them to pay for purchases with their smartphones.</p>

<p>Digital wallet companies saw an unprecedented surge in the number of people signing up for their services and adding money to their wallets after demonetisation.</p>

<p>Among mobile wallet companies, Paytm was the biggest beneficiary. We can gauge the impact of the demonetisation drive on its business by looking at the company&rsquo;s user base, which has reached 160 million &ndash; a fourfold increase since May 2016. Paytm&rsquo;s traffic rose by 435 per cent, app downloads grew by 200 per cent, and the company saw a 250 per cent rise in overall transaction value.</p>

<p>In fact, &ldquo;Paytm karo&rdquo; (literally, &ldquo;do Paytm&rdquo;) became one of the most common phrases during the early parts of the demonetisation drive, and sectors that have been traditionally cash-based, for example, small shopkeepers and public transport, such as taxis and auto-rickshaws, started accepting Paytm.</p>

<p>Such was a stardom of Paytm that it featured in a Harvard Business School case study of the company&rsquo;s transformation from online recharge platform to India&rsquo;s largest mobile payments platform.</p>

<p><strong>Ultimate failure</strong></p>

<p>The demonetisation drive, then, could be seen as a blessing for India&rsquo;s move towards a cashless economy and for encouraging consumers to use digital payment platforms. It also supports the government&rsquo;s Digital India initiative, which aims to encourage cashless payment solutions across the country by putting technological infrastructure in place.</p>

<p>But it&rsquo;s difficult to assess whether India is ready for a cashless economy. Traders tend not to reveal their actual income to avoid taxes and people are so used to paying for services in cash that for them to shift to new mode of payments requires a big habitual change.</p>

<p>The government&rsquo;s demonetisation drive, then, can be seen as an effort to curb the corruption and the flow of black money as stated, but also to force the general population to embrace digital payment options.</p>

<p>Unfortunately, it seems to have failed in both aspirations. Even though the main stated aim of demonetisation was to curb the extent of black money in the economy, during the first two months of the drive, almost 90 per cent of the scrapped and demonetised notes were back in the banking system. This stands in contrast to the government&#39;s expectation that roughly ?3 lakh crore (US$44 billion) of the scrapped notes would never return because they would be part of black money hoards.</p>

<p>The second consequence of moving towards a cashless economy may also be a failure. When cash returns to the system, many Indians are likely going back to the cash-based transactions given the over-dependence on cash-based transactions in the country due to limited connectivity and privacy issues related to transactions.</p>

<p>Ultimately, the demonetisation drive has been successful in making the banking sector healthier, but not what it was projected to do in terms of bringing in &ldquo;black money&rdquo; and turning the country into &ldquo;digital India&rdquo;.</p>

<p>This article was originally published on <a href="http://theconversation.com" rel="nofollow" target="blank">The Conversation</a>. Read the <a href="https://theconversation.com/indias-demonetisation-drive-has-boosted-banks-and-start-ups-but-its-still-a-failure-71704" rel="nofollow" target="blank">original article</a>.</p>


The demonetisation drive has made the banking sector healthier but failed to curb 'black money'

When Indian Prime Minister Narendra Modi announced the withdrawal of ?500 (US$7.40) and ?1,000 (US$15) banknotes from circulation in November 2016, the government said its demonetisation drive would curb India’s shadow economy and suppress the use of illicit and counterfeit cash in the economy. If there’s one sector that’s done particularly well as a result of government’s move, it’s the banking sector. Banks received deposits worth ?6 trillion (US$88 billion) and overall banking deposits with the Reserve Bank of India reached a record high of ?4.3 trillion (US$63.1 billion) within two weeks of the currency ban. So the demonetisation was a well-planned move in terms of the health of the Indian banking system. Five months before the drive, the total amount of gross non-performing assets (loans are classified like this after 90 days of non-payment of interest or principal) for public and private sector banks was around ?6lakh crore (US$88 billion). To understand how big this problem was, one needs to see the figure against the total loans given out by India’s banking system. That ratio corresponded to 11.8 per cent of total credit advanced in September 2016, and it’s expected to reach 12.5 per cent by March 2017. The bulk of these non-performing assets are from public sector banks, and were mainly lent to finance the basic metal and metal products sector, the textile industry and the beverages sector. In its December 2016 Financial Stability Report, the Reserve Bank noted that the asset quality of public sector banks had deteriorated further between March and September 2016. This reflected the failing health of the Indian banking system, which is a major provider of credit to industry and business. If not checked in time, it can have serious repercussions for the economy. Bringing currency back So calling the demonetisation drive a complete failure, as many economists and financial analysts have done then, is to fail to respect this well thought-out strategy for saving India’s banks. Demonetisation has fulfilled the objective of bringing currency back into the banking system. Within the first month, practically all demonetised currency notes in the country were back in the bank vaults. The sudden flow of cash to public sector banks gave them an instant lifeline clearly visible across the banking system. Enriched by these higher deposits, the country’s largest lender, the State Bank of India, slashed its benchmark lending rate by 0.9 per cent. In other words, after difficulty dealing with bad loans, after demonetisation banks are now able to provide cheap financing. Not only did lending rates get slashed, the overnight marginal cost of funds-based lending rate (the minimum interest rate below which a bank cannot lend) fell to 7.75 per cent from 8.65 per cent. Meanwhile, three-year loan rates came down to 8.15 per cent from 9.05 per cent. While these percentages may seem small, it was a huge turnaround, which were reeling under the pressure of the bad loans. Another winning sector Amid the frenzy after demonetisation, another sector that got a big boost was that of financial technology start-ups, including digital wallet and other mobile payment companies. Due to the cash crunch, many people turned to digital wallets that can be used in conjunction with mobile payment systems, allowing them to pay for purchases with their smartphones. Digital wallet companies saw an unprecedented surge in the number of people signing up for their services and adding money to their wallets after demonetisation. Among mobile wallet companies, Paytm was the biggest beneficiary. We can gauge the impact of the demonetisation drive on its business by looking at the company’s user base, which has reached 160 million – a fourfold increase since May 2016. Paytm’s traffic rose by 435 per cent, app downloads grew by 200 per cent, and the company saw a 250 per cent rise in overall transaction value. In fact, “Paytm karo” (literally, “do Paytm”) became one of the most common phrases during the early parts of the demonetisation drive, and sectors that have been traditionally cash-based, for example, small shopkeepers and public transport, such as taxis and auto-rickshaws, started accepting Paytm. Such was a stardom of Paytm that it featured in a Harvard Business School case study of the company’s transformation from online recharge platform to India’s largest mobile payments platform. Ultimate failure The demonetisation drive, then, could be seen as a blessing for India’s move towards a cashless economy and for encouraging consumers to use digital payment platforms. It also supports the government’s Digital India initiative, which aims to encourage cashless payment solutions across the country by putting technological infrastructure in place. But it’s difficult to assess whether India is ready for a cashless economy. Traders tend not to reveal their actual income to avoid taxes and people are so used to paying for services in cash that for them to shift to new mode of payments requires a big habitual change. The government’s demonetisation drive, then, can be seen as an effort to curb the corruption and the flow of black money as stated, but also to force the general population to embrace digital payment options. Unfortunately, it seems to have failed in both aspirations. Even though the main stated aim of demonetisation was to curb the extent of black money in the economy, during the first two months of the drive, almost 90 per cent of the scrapped and demonetised notes were back in the banking system. This stands in contrast to the government's expectation that roughly ?3 lakh crore (US$44 billion) of the scrapped notes would never return because they would be part of black money hoards. The second consequence of moving towards a cashless economy may also be a failure. When cash returns to the system, many Indians are likely going back to the cash-based transactions given the over-dependence on cash-based transactions in the country due to limited connectivity and privacy issues related to transactions. Ultimately, the demonetisation drive has been successful in making the banking sector healthier, but not what it was projected to do in terms of bringing in “black money” and turning the country into “digital India”. This article was originally published on The Conversation. Read the original article.

India's demonetisation drive has boosted banks and start-ups, but it's still a failure

<p>Lashing out at the Centre, Congress vice president Rahul Gandhi on&thinsp;Wednesday said note ban and GST rollout have broken the legs of Surat as he observed a &ldquo;black day&rdquo; in the country&rsquo;s textile and diamond hub.</p>

<p>Gandhi interacted with industry representatives and workers at Nirman Industries&rsquo; loom factory in Katargam industrial development area after he arrived in the Surat city of the poll-bound Gujarat.</p>

<p>&ldquo;There was an attack on India&rsquo;s economy one year back,&rdquo; he said.</p>

<p>&ldquo;I interacted with the people here and they told me that notebandi (demonetisation) and then GST have broken Surat&rsquo;s legs. The industry has been finished by the twin blows not only here, but in the entire country,&rdquo; Gandhi said.</p>

<p>&ldquo;The people said that they have been threatened. But truth cannot be suppressed, it will come out,&rdquo; the Congress leader told reporters.</p>

<p>He said, &ldquo;Surat is the place which can compete with China and has been doing it. Jobs will either come to India or China. But instead of helping them, the government has destroyed their strength.&rdquo;</p>

<p>Hitting out at the new tax regime rolled out by the NDA government on July 1 this year, Gandhi said, &ldquo;We had told (Prime Minister) Narendra Modiji and (Union Finance Minister) Arun Jaitleyji not to implement the GST in this way.&rdquo;</p>

<p>He said, &ldquo;This is not a political thing, this is not between the Congress and the BJP. This is about India&rsquo;s competitiveness, we have to compete with China. You please do not kill our industries and businesses. But they said that we are going to implement it at 12 midnight,&rdquo; he said.</p>

<p>&ldquo;You press (media) people were asking us, why we are not allowing GST to be implemented, because we wanted to save Surat and the country,&rdquo; he said.</p>

<p>&ldquo;GST means one nation, one tax. But this GST, implemented by Modiji, which has five layers will not work. We had said that maximum cap on taxes should be 18 per cent but they did not listen to us,&rdquo; the Congress leader said.</p>

<p>Gandhi is expected to have a formal interaction with traders in Adajan area of the city this evening.</p>

<p>He is also likely to participate in a candle light vigil, to mark the &ldquo;black day&rdquo;, near Vivekanand statue in Chowk Bazar area of Surat.</p>

<p>The prime minister had announced demonetisation of Rs 1,000 and Rs 500 notes as a measure to fight black money, corruption, fake currency and terror funding on this day last year.</p>

<p>The opposition is observing a &ldquo;black day&rdquo; today.</p>


The opposition is observing a ?black day? today.

Lashing out at the Centre, Congress vice president Rahul Gandhi on Wednesday said note ban and GST rollout have broken the legs of Surat as he observed a “black day” in the country’s textile and diamond hub. Gandhi interacted with industry representatives and workers at Nirman Industries’ loom factory in Katargam industrial development area after he arrived in the Surat city of the poll-bound Gujarat. “There was an attack on India’s economy one year back,” he said. “I interacted with the people here and they told me that notebandi (demonetisation) and then GST have broken Surat’s legs. The industry has been finished by the twin blows not only here, but in the entire country,” Gandhi said. “The people said that they have been threatened. But truth cannot be suppressed, it will come out,” the Congress leader told reporters. He said, “Surat is the place which can compete with China and has been doing it. Jobs will either come to India or China. But instead of helping them, the government has destroyed their strength.” Hitting out at the new tax regime rolled out by the NDA government on July 1 this year, Gandhi said, “We had told (Prime Minister) Narendra Modiji and (Union Finance Minister) Arun Jaitleyji not to implement the GST in this way.” He said, “This is not a political thing, this is not between the Congress and the BJP. This is about India’s competitiveness, we have to compete with China. You please do not kill our industries and businesses. But they said that we are going to implement it at 12 midnight,” he said. “You press (media) people were asking us, why we are not allowing GST to be implemented, because we wanted to save Surat and the country,” he said. “GST means one nation, one tax. But this GST, implemented by Modiji, which has five layers will not work. We had said that maximum cap on taxes should be 18 per cent but they did not listen to us,” the Congress leader said. Gandhi is expected to have a formal interaction with traders in Adajan area of the city this evening. He is also likely to participate in a candle light vigil, to mark the “black day”, near Vivekanand statue in Chowk Bazar area of Surat. The prime minister had announced demonetisation of Rs 1,000 and Rs 500 notes as a measure to fight black money, corruption, fake currency and terror funding on this day last year. The opposition is observing a “black day” today.

Note ban, GST have broken textile hub Surat's legs: Rahul Gandhi

<p>Ministers in the Modi government will fan across the country on Tuesday and Wednesday to highlight the crackdown on black money to mark the first anniversary of demonetisation on November 8 which the BJP will observe as &#39;anti-black money day&#39; and Congress as &#39;black day&#39;.</p>

<p>Many of them will speak to media on Tuesday in major cities, while BJP leaders, including ministers, MPs and MLAs, will hold several events to highlight the Modi dispensation&#39;s policies to curb illicit money, party sources said.</p>

<p>Finance Minister Arun Jaitley will interact with journalists in the national capital on Tuesday, while Law Minister Ravi Shankar Prasad and Bihar Deputy Chief Minister Sushil Kumar Modi will speak in Bhopal and Patna respectively.</p>

<p>On November 8, Union ministers Nitin Gadkari, Ananth Kumar, Nirmala Sitharaman, Mukhtar Abbas Naqvi, Suresh Prabhu and Smriti Irani will speak in Mumbai, Hyderabad, Chennai, Chandigarh, Jaipur and Lucknow respectively.</p>

<p>Prakash Javadekar will speak to media in Bengaluru and Piyush Goyal in Ahmedabad. Union minister Jayant Sinha has also been drafted for the exercise, sources said.</p>

<p>BJP chief Amit Shah will be in Gujarat that day.</p>

<p>With the BJP and the Congress involved in a war of words over demonetisation&#39;s implications, Prime Minister Narendra Modi has turned up the heat on the opposition party over the issue of black money and corruption during his election rallies.</p>

<p>The Congress too has planned a nation-wide exercise to project demonetisation as a &quot;failure&quot;.&nbsp;</p>


Ministers in the Modi government will fan across the country on Tuesday and Wednesday to highlight the crackdown on black money to mark the first anniversary of demonetisation on November 8.

Ministers in the Modi government will fan across the country on Tuesday and Wednesday to highlight the crackdown on black money to mark the first anniversary of demonetisation on November 8 which the BJP will observe as 'anti-black money day' and Congress as 'black day'. Many of them will speak to media on Tuesday in major cities, while BJP leaders, including ministers, MPs and MLAs, will hold several events to highlight the Modi dispensation's policies to curb illicit money, party sources said. Finance Minister Arun Jaitley will interact with journalists in the national capital on Tuesday, while Law Minister Ravi Shankar Prasad and Bihar Deputy Chief Minister Sushil Kumar Modi will speak in Bhopal and Patna respectively. On November 8, Union ministers Nitin Gadkari, Ananth Kumar, Nirmala Sitharaman, Mukhtar Abbas Naqvi, Suresh Prabhu and Smriti Irani will speak in Mumbai, Hyderabad, Chennai, Chandigarh, Jaipur and Lucknow respectively. Prakash Javadekar will speak to media in Bengaluru and Piyush Goyal in Ahmedabad. Union minister Jayant Sinha has also been drafted for the exercise, sources said. BJP chief Amit Shah will be in Gujarat that day. With the BJP and the Congress involved in a war of words over demonetisation's implications, Prime Minister Narendra Modi has turned up the heat on the opposition party over the issue of black money and corruption during his election rallies. The Congress too has planned a nation-wide exercise to project demonetisation as a "failure".

One year of demonetisation: Ministers to highlight govt's fight against black money

<p>Finance Minister Arun Jaitley has called November 8, 2016, the day when the BJP government banned the existing currency notes and replaced them with new ones a &ldquo;watershed moment in the history of Indian economy&rdquo;.</p>

<p>In a blog post on the first anniversary of demonetisation, Jaitley said, &ldquo;November 8, 2016 would be remembered as a watershed moment in the history of Indian economy.&nbsp;This day signifies the resolve of this Government to cure the country from &lsquo;dreaded disease of black money&rsquo;.&rdquo;</p>

<p>Highlighting his government&rsquo;s resolve to cleanse the economy and strengthen its foundations, Jaitley wrote in his blog that the process was started soon after the BJP came to power in 2014. &ldquo;This Government took decisions and implemented the earlier provisions of law in a well-considered and planned manner over three years to meet the objective of fight against black money.&nbsp; These decisions span from setting up of SIT to passing of necessary laws for foreign assets to demonetisation and to implementation of GST,&rdquo; Jaitley said.</p>

<p>The government has made elaborate plans to celebrate the first anniversary of demonetisation and has <a href="http://www.wionews.com/business-economy/one-year-of-demonetisation-ministers-to-highlight-govts-fight-against-black-money-23637">deployed many Union ministers</a> to highlight government&rsquo;s fight against black money. The government is celebrating November 8, 2017, as &lsquo;anti-black money day&rsquo;.</p>

<p>The opposition has hit back at the government saying the entire exercise has been a failure. In his blog post, Jaitley highlights the positive outcome of demonetisation to counter opposition charge. &ldquo;RBI has reported in their Annual Accounts that Specified Bank Notes (SBNs) of estimated value of Rs.15.28 lakh crore have been deposited back as on 30.6.2017.&nbsp;The outstanding SBNs as on 8th November, 2016 were of Rs.15.44 lakh crore value.&nbsp; The total currency in circulation of all denominations as on 8th November, 2016 was 17.77 lakh crore. One of the important objective of demonetisation was to make India a less cash economy and thereby reduce the flow of black money in the system.&nbsp; The reduction in currency in circulation from the base scenario reflects that this intended objective has been met,&rdquo; the finance minister says in his blog post.</p>

<p><strong>READ JAITLEY&#39;S ENTIRE BLOG:</strong></p>

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<p>&nbsp;</p>


Finance Minister Arun Jaitley has called November 8, 2016, the day when the BJP government banned the existing currency notes and replaced them with new ones a ?watershed moment in the history of Indian economy?.

Finance Minister Arun Jaitley has called November 8, 2016, the day when the BJP government banned the existing currency notes and replaced them with new ones a “watershed moment in the history of Indian economy”. In a blog post on the first anniversary of demonetisation, Jaitley said, “November 8, 2016 would be remembered as a watershed moment in the history of Indian economy. This day signifies the resolve of this Government to cure the country from ‘dreaded disease of black money’.” Highlighting his government’s resolve to cleanse the economy and strengthen its foundations, Jaitley wrote in his blog that the process was started soon after the BJP came to power in 2014. “This Government took decisions and implemented the earlier provisions of law in a well-considered and planned manner over three years to meet the objective of fight against black money. These decisions span from setting up of SIT to passing of necessary laws for foreign assets to demonetisation and to implementation of GST,” Jaitley said. The government has made elaborate plans to celebrate the first anniversary of demonetisation and has deployed many Union ministers to highlight government’s fight against black money. The government is celebrating November 8, 2017, as ‘anti-black money day’. The opposition has hit back at the government saying the entire exercise has been a failure. In his blog post, Jaitley highlights the positive outcome of demonetisation to counter opposition charge. “RBI has reported in their Annual Accounts that Specified Bank Notes (SBNs) of estimated value of Rs.15.28 lakh crore have been deposited back as on 30.6.2017. The outstanding SBNs as on 8th November, 2016 were of Rs.15.44 lakh crore value. The total currency in circulation of all denominations as on 8th November, 2016 was 17.77 lakh crore. One of the important objective of demonetisation was to make India a less cash economy and thereby reduce the flow of black money in the system. The reduction in currency in circulation from the base scenario reflects that this intended objective has been met,” the finance minister says in his blog post. READ JAITLEY'S ENTIRE BLOG: ×

Demonetisation: 'November 8 watershed moment in history of Indian economy', says Arun Jaitley

<p><a href="http://www.wionews.com/sports/india-beats-china-in-womens-asia-cup-hockey-2017-23548">India beat China to win Asia Cup, qualify for Hockey World Cup</a></p>

<p>The Indian women&rsquo;s hockey team qualified for next year&rsquo;s World Cup after defeating China 5-4 via a shootout in a nail-biting Asia Cup final on Sunday. It was 1-1 at full-time after China found a late equaliser by Tiantian Luo, who converted a penalty corner in the 47th minute.</p>

<p><a href="http://www.wionews.com/india-news/cong-has-run-away-hp-poll-one-sided-modi-at-rally-23538">Indira Gandhi refused to carry out note ban: Modi</a></p>

<p>&quot;Former prime minister Indira Gandhi refused to carry out note ban. Had she done note ban when needed, I would not have had to carry out this big task,&#39;&#39; said PM&nbsp;Narendra Modi. Stressing that the implementation of demonetisation policy was required in 1971, but it was implemented by the BJP government, he added.</p>

<p><a href="http://www.wionews.com/india-news/rahul-tells-modi-to-quit-if-unable-to-control-price-rise-give-jobs-23545">Rahul asks Modi to quit if unable to control price rise, give jobs</a></p>

<p>Congress vice-president Rahul Gandhi today asked the Narendra Modi government to stop delivering &quot;hollow&quot; speeches and quit if it was unable to stop prices from rising and give jobs to the people. Gandhi tweeted: &quot;Mehngi gas, mehnga ration, band karo khokhla bhashan, daam bandho, kaam do, varna khali karo singhasan.<br />
&nbsp;</p>

<p><a href="http://www.wionews.com/world/securing-n-korea-nukes-would-require-us-ground-invasion-reports-23528">Securing N. Korea nukes would require US ground invasion: Reports</a></p>

<p>The only certain way to locate and secure all North Korea&#39;s nuclear weapons sites would be via a US ground invasion, the Washington Post reported Saturday, citing a letter from Pentagon officials sent to US lawmakers.</p>

<p><a href="http://www.wionews.com/india-news/council-to-consider-slashing-gst-on-common-use-goods-23536">Council to consider slashing GST on common use goods</a></p>

<p>The all-powerful GST Council may consider lowering tax rates on a host of goods such as handmade furniture, plastic products and daily use items like shampoo, and simplify return filing rules in its meeting this week.</p>

<p>&nbsp;</p>

<p>&nbsp;</p>


"Former prime minister Indira Gandhi refused to carry out note ban. Had she done note ban when needed, I would not have had to carry out this big task,'' said PM?Narendra Modi.

India beat China to win Asia Cup, qualify for Hockey World Cup The Indian women’s hockey team qualified for next year’s World Cup after defeating China 5-4 via a shootout in a nail-biting Asia Cup final on Sunday. It was 1-1 at full-time after China found a late equaliser by Tiantian Luo, who converted a penalty corner in the 47th minute. Indira Gandhi refused to carry out note ban: Modi "Former prime minister Indira Gandhi refused to carry out note ban. Had she done note ban when needed, I would not have had to carry out this big task,'' said PM Narendra Modi. Stressing that the implementation of demonetisation policy was required in 1971, but it was implemented by the BJP government, he added. Rahul asks Modi to quit if unable to control price rise, give jobs Congress vice-president Rahul Gandhi today asked the Narendra Modi government to stop delivering "hollow" speeches and quit if it was unable to stop prices from rising and give jobs to the people. Gandhi tweeted: "Mehngi gas, mehnga ration, band karo khokhla bhashan, daam bandho, kaam do, varna khali karo singhasan. Securing N. Korea nukes would require US ground invasion: Reports The only certain way to locate and secure all North Korea's nuclear weapons sites would be via a US ground invasion, the Washington Post reported Saturday, citing a letter from Pentagon officials sent to US lawmakers. Council to consider slashing GST on common use goods The all-powerful GST Council may consider lowering tax rates on a host of goods such as handmade furniture, plastic products and daily use items like shampoo, and simplify return filing rules in its meeting this week.

WION evening news brief, Nov 5, 2017

<p>Prime Minister Narendra Modi received Rs 45 crore ($6.6 million) from Sahara -- a large business conglomerate in India -- before he became came to power in 2014, according to opposition leader Rahul Gandhi.</p>

<p>At a rally in the western state of Gujarat, the Congress vice-president&nbsp;claimed that during a raid in 2014,&nbsp;taxmen found documents which suggested that Sahara company made multiple payments to Modi between October 2013 and February 2014.</p>

<p>Earlier in the day, Gandhi tweeted that the Modi government is behaving like a &quot;confused&quot; traffic signal exhibiting different colours at the same time. He was attacking the government&#39;s &#39;repeated&#39; changes in the rules regarding deposit of old currency notes in banks.</p>

<p>He posted the picture of a huge traffic signal showing red, yellow, blue and a few other colours at the same time, on Twitter with the caption, &quot;Government orders after demonetisation.&quot;</p>

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<p dir="ltr" lang="en">Government orders after demonetisation: <a href="https://t.co/5D5p0XX4MO">pic.twitter.com/5D5p0XX4MO</a></p>
&mdash; Office of RG (@OfficeOfRG) <a href="https://twitter.com/OfficeOfRG/status/811452231413207040">December 21, 2016</a></blockquote>
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<h5>Chief Congress spokesman Randeep Surjewala was equally critical of the latest order. He gave the RBI the sobriquet &#39;Reverse Bank of India&#39;</h5>
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<p>The Congress leader had yesterday likened the repeated changes in the rules to Modi&#39;s changing of &quot;clothes&quot; and had said that the message going out was that the Prime Minister&#39;s words were &quot;hollow&quot;.</p>

<p>He was commenting on the new decision of the government under which an amount more than Rs 50,00 in scrapped currency can be deposited only once per account till December 30.</p>

<p>Earlier, the Prime Minister, while announcing the demonetisation decision on November 8, had said old Rs 500 and Rs 1,000 notes could be deposited in banks till December 30 without any questions asked.</p>

<p>Party chief spokesman Randeep Surjewala was equally critical of the latest order, with him giving RBI the sobriquet of &quot;Reverse Bank of India.&quot;</p>

<p>In a series of tweets, he said, &quot;Unfortunately, Reserve Bank of India has become &#39;Reverse Bank of India&#39;!&quot;</p>

<p>Surjewala also posted two cartoons stating &quot;the rules of RBI are like weather, which keeps on changing and therefore, requires hourly bulletins to inform people.&quot;</p>

<p>&quot;Daily &#39;headline management&#39; is the norm for Modi Govt. If Ind. Owner has a choice to pay in cash or cheque, futile to amend the Wages Act,&quot; he said in response to the government bringing an ordinance to amend the Payment of Wage Act for allowing business and industrial establishments to pay salaries through cheques or by using electronic modes.</p>

<p>&quot;2ndly, it reflects massive shortage of currency with Modi Govt. Instead of admitting it, it is forcing daily wage earners to stand in bank queues,&quot; he said.</p>

<p>Surjewala also latched on to the remarks of Andhra Pradesh Chief Minister Chandrababu Naidu, who after supporting demonetisation initially, did a volte face and said the move has created many troubles for the common man.</p>

<p>&quot;AP CM, NDA ally &amp; head of #DeMonetisation Committee is breaking his head over the mess. Do u need more proof Modiji?&quot;, he said.</p>

<p>Ahmed Patel, Political Secretary to Congress president Sonia Gandhi, was equally caustic. &quot;50 days, 60 rules #DeMonetisation,&quot; he said in a tweet.</p>

<p>(PTI)</p>


Gandhi said Modi received Rs 45 crore from a business conglomerate and also attacked the government's haywire demonetisation policy

Prime Minister Narendra Modi received Rs 45 crore ($6.6 million) from Sahara -- a large business conglomerate in India -- before he became came to power in 2014, according to opposition leader Rahul Gandhi. At a rally in the western state of Gujarat, the Congress vice-president claimed that during a raid in 2014, taxmen found documents which suggested that Sahara company made multiple payments to Modi between October 2013 and February 2014. Earlier in the day, Gandhi tweeted that the Modi government is behaving like a "confused" traffic signal exhibiting different colours at the same time. He was attacking the government's 'repeated' changes in the rules regarding deposit of old currency notes in banks. He posted the picture of a huge traffic signal showing red, yellow, blue and a few other colours at the same time, on Twitter with the caption, "Government orders after demonetisation." Government orders after demonetisation: pic.twitter.com/5D5p0XX4MO — Office of RG (@OfficeOfRG) December 21, 2016 × Chief Congress spokesman Randeep Surjewala was equally critical of the latest order. He gave the RBI the sobriquet 'Reverse Bank of India' × The Congress leader had yesterday likened the repeated changes in the rules to Modi's changing of "clothes" and had said that the message going out was that the Prime Minister's words were "hollow". He was commenting on the new decision of the government under which an amount more than Rs 50,00 in scrapped currency can be deposited only once per account till December 30. Earlier, the Prime Minister, while announcing the demonetisation decision on November 8, had said old Rs 500 and Rs 1,000 notes could be deposited in banks till December 30 without any questions asked. Party chief spokesman Randeep Surjewala was equally critical of the latest order, with him giving RBI the sobriquet of "Reverse Bank of India." In a series of tweets, he said, "Unfortunately, Reserve Bank of India has become 'Reverse Bank of India'!" Surjewala also posted two cartoons stating "the rules of RBI are like weather, which keeps on changing and therefore, requires hourly bulletins to inform people." "Daily 'headline management' is the norm for Modi Govt. If Ind. Owner has a choice to pay in cash or cheque, futile to amend the Wages Act," he said in response to the government bringing an ordinance to amend the Payment of Wage Act for allowing business and industrial establishments to pay salaries through cheques or by using electronic modes. "2ndly, it reflects massive shortage of currency with Modi Govt. Instead of admitting it, it is forcing daily wage earners to stand in bank queues," he said. Surjewala also latched on to the remarks of Andhra Pradesh Chief Minister Chandrababu Naidu, who after supporting demonetisation initially, did a volte face and said the move has created many troubles for the common man. "AP CM, NDA ally & head of #DeMonetisation Committee is breaking his head over the mess. Do u need more proof Modiji?", he said. Ahmed Patel, Political Secretary to Congress president Sonia Gandhi, was equally caustic. "50 days, 60 rules #DeMonetisation," he said in a tweet. (PTI)

Demonetisation: Opposition leader Rahul Gandhi accuses PM Modi of graft

<p>Russia has strongly protested with India on cash shortage affecting the working of its Mission after demonetisation, and wants a quick resolution of the issue, failing which it may explore other options including summoning Indian diplomat in Moscow.</p>

<p>In a letter, Russian Ambassador Alexander Kadakin has raised the issue of diplomats not being able to withdraw enough money hampering the normal functioning of the mission and sought intervention of the external affairs ministry so that the withdrawal restrictions for diplomatic staff are lifted.</p>

<p>&quot;We are awaiting a reply from the MEA and hope that this is resolved quickly. Otherwise, we will be forced to explore other options which may include raising the issue in Moscow with your Embassy by summoning Indian Minister Counsellor,&quot; a senior Russian embassy official said here.</p>

<p>Other options may also include restriction on the cash withdrawals for Indian diplomats posted in Russia, the official indicated.</p>

<p>There are approximately 200 staffers in Russian mission here.</p>

<p>There was no immediate reaction from the Indian side on the complaint.</p>

<p>Earlier, the Dean of Diplomatic Corps had also raised the issue, complaining about the problems faced by the missions. It is also understood that some other countries like Ukraine and Kazakhstan have also protested to the ministry.</p>

<p>These diplomatic missions have urged the Indian government for an immediate redressal of their problems.</p>

<p>After the demonetisation last month, MEA had said it has approached Department of Economic Affairs over three or four types of requests including those related to maintaining sufficient flow of funds to diplomatic missions following the demonetisation and was awaiting a decision from it.</p>

<p>(Agencies)</p>


Diplomatic missions of Kazakhstan, Ethiopia and Sudan too have written letters to the Indian government seeking a solution to the issue

Russia has strongly protested with India on cash shortage affecting the working of its Mission after demonetisation, and wants a quick resolution of the issue, failing which it may explore other options including summoning Indian diplomat in Moscow. In a letter, Russian Ambassador Alexander Kadakin has raised the issue of diplomats not being able to withdraw enough money hampering the normal functioning of the mission and sought intervention of the external affairs ministry so that the withdrawal restrictions for diplomatic staff are lifted. "We are awaiting a reply from the MEA and hope that this is resolved quickly. Otherwise, we will be forced to explore other options which may include raising the issue in Moscow with your Embassy by summoning Indian Minister Counsellor," a senior Russian embassy official said here. Other options may also include restriction on the cash withdrawals for Indian diplomats posted in Russia, the official indicated. There are approximately 200 staffers in Russian mission here. There was no immediate reaction from the Indian side on the complaint. Earlier, the Dean of Diplomatic Corps had also raised the issue, complaining about the problems faced by the missions. It is also understood that some other countries like Ukraine and Kazakhstan have also protested to the ministry. These diplomatic missions have urged the Indian government for an immediate redressal of their problems. After the demonetisation last month, MEA had said it has approached Department of Economic Affairs over three or four types of requests including those related to maintaining sufficient flow of funds to diplomatic missions following the demonetisation and was awaiting a decision from it. (Agencies)

Demonetisation: Russia, Ukraine, 3 other countries protest cash shortage

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